Insurance brokers have an important role to play guiding businesses towards insurance solutions that strike a balance between coverage, risk and affordability amid a barrage of local and global challenges. Roger Abel, managing director at Rothbury Insurance Brokers shares his insights.
Many New Zealand businesses are experiencing a perfect storm in the wake of increased extreme weather event costs (such as Cyclone Gabrielle), coupled with inflationary pressures and the rising cost of living. This highlights why it’s important to seek personal service and quality advice about your insurance needs.
We are locked into a hard insurance market for the foreseeable future. Insurers have been reviewing their risk appetite and pricing strategies. Identical businesses in different geographic areas can have different insurance premiums, exclusions and coverage limits.
Do these factors make it harder for brokers? The short answer is yes. To do a thorough job it may take brokers longer but the investment in time and in building strong relationships with clients and insurers will deliver better client outcomes.
Where are the biggest priorities for insurance brokers?
Advice driven relationships
We are operating in a challenging market and businesses need tailored insurance solutions more than ever. Sometimes they face hard choices and require a heightened understanding of their insurance options so they can achieve the right balance between cover, risk and affordability.
This is where personal service and quality advice plays a vital role in helping businesses assess their insurance options to best protect their business and valuable assets.
Offering an advice driven, relationship-based service is an effective way for brokers to help clients get support when they need it. There is no such thing as a one-size-fits-all insurance solution.
Brokers and clients working more closely together
A strong relationship enables brokers to understand their client’s business and risk management strategy, which in turn enables them to identity business risks and ensures the client is appropriately informed. Brokers are in an optimal position to educate clients about their risks if they understand their clients' risk tolerance and attitude to managing and transferring risk.
A recent report from Vero (the Vero Insurance Index) highlighted that 78% of SMEs who make decisions together with their broker are satisfied, compared to a 34% satisfaction rating from those who claim to have little involvement with their broker. Further, if a broker was involved in their last policy renewal, clients were seven times more likely to take the increasing costs of asset replacement into account.
Insurer relationships
Developing strong relationships with insurers is a key focus for brokers. It ensures brokers maintain up to date knowledge of product terms and allows them to anticipate future market changes. This is invaluable when risks are difficult to place and helps brokers secure the most appropriate terms in order to achieve the best possible outcome for the client.
Drawing on client feedback
Measuring client feedback is a crucial step for any business to better understand how product and service offerings meet clients' expectations.
The Net Promoter Score (NPS) is an internationally recognised client satisfaction measurement taken from asking clients how likely they are to recommend your company, product or service to friends and colleagues. Higher NPS scores (“promoters”) indicate greater client loyalty and offer a means to compare performance over time, against industry standards and competitors to facilitate informed decision-making.
It’s vital to keep up to date on client feedback. Rothbury has been using NPS to measure client satisfaction ratings over the past 15 years. Every month feedback scores and comments from over 600 clients provide invaluable insights. Through this feedback we’re able to identify what is important to our clients and make incremental service changes that continually refine the client experience.
There’s no doubt that businesses will face tougher economic conditions in 2024. Insurance brokers will have a vital role in helping clients access the right insurance solutions that allow them to survive and even thrive over the coming year.
