Identifying the Best: How do Brokers Select Insurance Providers for their Clients?
Insurance brokers rely heavily on a good reputation in order to attract and retain custom. Therefore, the choice of insurance policies that they offer their clients is vital to their business. Recommending comprehensive, affordable products with a trouble-free response in the event of a claim, can gain the broker a reputation of excellence. Equally, a bad customer experience for a client can be very detrimental to the broker’s own good name. A recent series of interviews by Insurance Age, Insurance Post and Insurance Hound, investigated the ways in which brokers choose insurers for their customers. The group documented their findings in a paper entitled “Broker Insight.”[i] They found that many brokers repeatedly used a small selection of insurers and examined the factors used by brokers to decide upon their selection.
Quality of Experience and a Positive Claims Process
Today, customer experience professionals are recognising that customers are putting experience above product and price in their purchase choices. Walker’s in-depth study about customers suggests that by the year 2020, the balance of importance will be 50% experience, 34% product and 16% price.[ii]
The “Broker Insight” findings suggest that insurance brokers have anticipated these customer priorities, with most brokers stating that the quality of the insurer’s cover is the most important consideration when identifying insurance providers to recommend to clients. Brokers don’t like policies with numerous exclusions and they prefer policies that have a good breadth of cover.
Brokers are extremely keen that their clients should have a positive experience in the unfortunate event of a claim. The public perception of the insurer claims process is regrettably very negative in the UK, with a recent poll by Dewberry Insurance finding that people tend to believe that only 50% of life insurance claims are paid out (in reality, around 99% of life insurance claims are paid out).
[iii] Brokers assess the quality of an insurer’s claims process when making decisions about which insurance companies to recommend. Being able to access marketing and case studies promoting a good claims record is helpful for brokers, as they can share the details with clients when recommending a product.
Flexibility and Underwriting Appetite
With clients that have non-mainstream requirements often using brokers to buy their insurance, insurance brokers need to be able to source specialist insurance covers. Therefore, brokers like to work with insurers who have an underwriting appetite for unusual risks, particularly those able to provide tailored policies for complex circumstances.
Brokers will also be looking out for insurers with an appetite for areas of increasing risk. Cyber risk is possibly the best current example of potential for growth within the insurance industry. One US company predicts that cyber insurance policies will increase from $2.5 Billion in 2015 to $7.5 Billion in 2020.[iv] However, the risks are complex and not all companies yet offer a good breadth of cover in this area. Brokers will be keen to hear from underwriters with an appetite to take on cyber risks.
Relationships with Insurers
The Broker Insight Report suggests that the relationship between a Broker and an Underwriter is key to a broker placing business with an insurance company. Brokers get to know specific underwriters; their specialisms, expertise, and appetite for risk. They are likely to go to the underwriters that are known to them first, because they know the risks that they are likely to be prepared to underwrite. Specialist recruitment agencies such as Aston Charles provide insurers with access to experienced Underwriters, able to create the kind of bespoke policies that brokers are attracted to.
Brokers feel that repeatedly using the same insurer is likely to give them access to the best service in terms of value for money and negotiation of cover for unusual or complex risks. The relationship is also beneficial in the event of a claim, with brokers having a direct link to the person processing the claim.
Branding and Press Coverage
Brand plays a role in a broker’s attraction to an insurance company. Larger insurers are well known, even by clients, making it easier for a broker to “sell” their products. Big names are assumed to have a good reputation. Press coverage is also important; from the point of view of a broker, when insurers advertise a certain product it tells them that the insurance company has an appetite for underwriting risks in those relevant areas, making the broker more inclined to discuss their requirements with that insurer.
Brokers appreciate insurers who offer additional services. Training is a particularly attractive provision, often with the benefit of receiving information in an accessible format, in order to be able to share the information with clients. It is also a helpful networking opportunity to get to know Underwriters personally at such training events. Some areas of risk (currently cyber threats are a good example) change very quickly. Regular updates on changing regulations, ways to mitigate risks and understanding insurance coverage are helpful for educating insurance brokers, as well as enabling them to pass pertinent information on to clients.
Following the trend highlighted earlier, with customer experience experts giving price a mere 16% importance when it comes to customer consideration, brokers will ensure that an insurance product meets their exacting standards of quality before considering the price. However, in areas where policies offer comparable benefits, price becomes more of a factor, with insurance brokers keen to give clients the best value for money.
The Selection Process
For the majority of brokers, an excellent relationship with Underwriters is key. As they get to know the underwriting appetite and the claims quality of an insurance company, brokers feel confident that they will be able to get a fair and comprehensive insurance policy for their client
Though brokers do have a loyalty to insurers that they already know and trust, many are open to marketing from other companies; particularly when it comes to insurers who have an appetite for niche risk areas.
For specialist recruitment of experienced Underwriters or Brokers contact Aston Charles today.
[i]Much of the information in this article is based on the findings described in the following document: Insurance Age, Insurance Post and Insurance Hound, 2017. Broker Insight: Find Out How Brokers Choose Insurance Providers.
[ii] Walker, 2013. Customers 2020: The Future of B-to-B Customer Experience. Pg 25.
[iii] Drewberry. 2015. The 2015 Drewberry™ Protection Survey. [ONLINE] Available at: https://www.drewberryinsurance.co.uk/knowledge/research/2015-protection-survey. [Accessed 22 September 2017]. This 2015 survey questioned respondents on how many claims they believed were paid out in 2013.
[iv] PWC, 2015. Insurance 2020: Reaping the Dividends of Cyber Resilience. Available online at: https://www.pwc.com/gx/en/industries/financial-services/insurance/publications/insurance-2020-cyber.html: Pg 4.