Expert panel agrees that an advice-led approach complete with value-added services, such as tax and legal support, is the future of commercial broking post pandemic

Insurance brokers seeking opportunities for success amid the Covid-19 pandemic should look to adopt a broad advice-led approach that includes offering value-added services, such as tax, legal and HR support, in order to help SME commercial clients navigate the new risk landscape created by coronavirus.

This was the central take-away from Insurance Times’s most recent webinar, in association with Markel, titled ‘How commercial brokers can succeed and grow post pandemic’.

The ongoing pandemic has drastically altered the risk landscape for many small and medium-sized enterprises (SMEs), raising a number of unanswered questions – this could be around how to furlough staff, the processes around closing and re-opening businesses in conjunction with lockdown rules, the cyber and fraud risks associated with home working, or even navigating a change of venue function and how that could impact insurance coverage, for example if a brewery or gin distillery adapts its function to produce hand sanitiser.

Within this myriad of emerging risks, however, is a “fantastic opportunity for brokers to really leverage their relationship with the customer and expand their dialogue outside of just insurance placement”, said Nic Brown, sales and marketing director at Markel UK, especially as many SMEs don’t always have large internal teams or departments to support aspects such as HR.

From his perspective, these differing business concerns present an opportunity for brokers to step up to the plate and diversify their propositions to include add-on services such as a legal helpline or tax support – not only does this fill the advice gap for SMEs, but it allows brokers themselves to grow and expand their business operations while deploying vital risk management.

Markel UK’s divisional managing director Neil Galjaard described this as the broker becoming “more of a business partner than just an insurance broker”.

He continued: “It was that immediacy of need and turning to someone for help. That’s where the partnership of a broker really comes through in that time of need, whether it’s an insurance crisis or what we have now, a whole community crisis, but our ability to support [SME clients] wider than just dealing with the pure insurance needs.”

Fellow panellist Phil Barton, chief executive of brokerage Partners&, agreed, adding that “clients are wanting more and more advice”.

He explained: “They’re more risk aware than they’ve ever been. Yet the vast majority of our market has been commoditising its propositions, simplifying its approach to client service and going in the opposite direction to that of our customers.

“There’s a real opportunity to align with the needs and demands and requirements of a customer by offering more and more advice.”

Simon Mabb, managing director of commercial insurance at Romero Insurance Brokers, had also noted this trend – he said there is an advice gap that brokers could most certainly fill.

At his organisation, for example, he noted that call volumes escalated when the coronavirus lockdown was first implemented, suggesting that brokers were the first point of contact for many businesses that wanted answers around the new and changing risk environment.

Brown added: “The industry has taken a bit of a hammering in the last six to nine months in the consumer’s eye and I think there’s an opportunity to show our mettle and the support that we can provide.

“That drives opportunity, it drives engagement, which in turn drives growth.”

Price versus advice

Determining that offering a broad base of advice for commercial SME clients is a key differentiator for brokers, Barton emphasised that an advice-led approach will win out over a “price orientated” and “transactional” broker model every time.

His own firm Partners& is a clear example of this, he said, as it has grown by nearly 10% over the months of lockdown compared with its base year figures. He attributed this to being able to offer broader advice to clients.

He continued: “The market has definitely moved over the last few years to be price orientated and transactional, so any broker that is differentiating over the quality of advice is going to win.

“They’re going to win more clients, they’re going to secure those clients, they’re going to grow the lifetime value of those clients through delivering more services to more clients for longer.

“They’re also going to be more valuable as a partner to those client businesses and as a consequence, they’re going to enjoy referrals and introductions.”

Trusted relationships

A key facet of this advice-led approach, however, hinges on the trusted status that many brokers enjoy as part of their relationship with their clients – leveraging this, therefore, opens the door for opportunities.

On this, Mabb said: “We are trusted, on a lot of occasions, by our clients. They will come to us first and foremost for advice because they’re not on the clock, they’re not paying by the hour when they have a conversation with us.

“We’re quite good at problem solving and sorting issues out and we’ve often got a big network of people that we can get them involved in or there might be something within their insurance policy that gives them that help that we can direct them to, that they may have already paid for some service that they perhaps didn’t realise [they had] at the time because there’s that much that you give them at renewal that they just didn’t fully understand everything that you told them.

“They’ll come to someone they trust as a business advisor, whether it’s us or their accountant, and they want to see what solutions we may be able to offer.”

Galjaard added: “I think people are genuinely looking for help in understanding what risks they’ve got and the people who are best qualified to really help the client understand the risk and then help manage that risk are the brokers, working with the right insurer.”

It is this partnership between brokers and insurers, and how this can deliver for clients, which presents the best opportunities for the future of commercial broking post pandemic, said Barton.

He explained: “There is undoubtedly an opportunity presented by the pandemic for insurers and brokers to partner together to establish their future and move away from transaction, move away from the rest of the big data houses or Google or Amazon coming into our sector.

“Relationships, trust [and] advice have never been higher on the agenda for clients. If we seize that opportunity, then broking has got an amazing future. If we forget about it and focus on price and a transaction, we have no future and it’s as stark as that frankly in my view.”

Mabb concurred, stating that “it’s ours to lose”.

Held on 24 November, the webinar was chaired by Insurance Times’s associate editor Katie Scott.

Brokers need to be SME business partners to secure success post Covid – Markel