Profit with professionalism - is that so much to ask? With the focus on chartered status gathering pace, brokers should surely consider valuing both
For a while I’ve been concerned that our industry exists within a society where to make a profit is almost seen as unfair. It’s okay to win the lottery, make millions playing sport, singing or by being a minor celebrity, but if a company makes a profit from its customers then those customers must be being exploited in one way or another, as must the hardworking employees.
Now, I’m for fairness as much as the next man, but without profits companies fail or, at best, become lifestyle businesses, providing a reasonable living for their owners and directors, but remaining fixed at a small size with no ambition to grow and expand.
The landscape in broking has changed hugely over the past 5-10 years but there are still plenty of commercial brokers who are resting on what is left of their laurels with no business plan and with no thought that they might need to change. “We’re giving our clients a good service,” they say. “So why do we need to change? We’re ACII qualified and, even though our agency base isn’t what it was, we can still place most risks with a little help from our managing general agent friends. Sure, we lost a few longstanding clients this year, but that’s only because the owner has retired and sold his business or because we needed to make some savings. We didn’t do anything wrong. There wasn’t anything we could do.”
Really? Nothing they could do? Have they got a plan to replace the lost cases? Have they got a niche? Have they got any sort of development plan at all?
So what has this got to do with professionalism? Surely profit is linked to winning new clients, retaining the existing ones and having sharp sales staff who can trade and cut a deal? Well, yes, you probably need all of them, but there is still a place for professionalism. It’s easy to say that nobody ever lost a client by signing up to the Aldermanbury Declaration or acquiring chartered status, but it is much harder to quantify the benefits.
If a differentiator makes us even better at what we do at the core of our business, then we’d be crazy not to embrace it”
Do clients really value the fact that we are chartered brokers? The simple answer is that some do and some don’t, but I’d rather our firm was inside looking out with the select group who can display the chartered logo, than outside looking in. If there is a differentiator available that makes our business better than our competition, then we’d sign up to it almost every time. If that differentiator makes us even better at what we do at the core of our business, then we’d be crazy not to embrace it.
Like most of our clients, we wouldn’t seek legal advice from an unqualified solicitor (no matter how much cheaper the service was), nor would we employ a non-chartered accountant to advise us. I’m not naïve enough to think that the businesses we look after all think of insurance brokers as being professionals in the same way as their solicitor or accountant, but I do know that they never will as long as the majority of brokers haven’t taken the trouble to become qualified or achieve chartered status.
The emphasis from the CII on the chartered status seems to be gathering pace. When the majority of brokers have attained the qualification then maybe the ones left behind will find it hard to believe that those who went before them bought an essential and valuable service from someone who couldn’t prove that they were competent to look after them.
For further information, visit: charteredinsurancebroker.com
Martin Bellamy ACII is chairman of Walmsleys Commercial Insurance Brokers