Too many brokers looking for ‘easy short-term answers’ to solve profitability

As the insurance sector has moved towards ’commoditisation’, too many brokers are looking for “easy short-term answers to solve their future profitability”, according to Phil Barton, chief executive at Partners&.

Speaking during Insurance Times’s webinar: How commercial brokers can succeed and grow post-pandemic yesterday, Barton gave the example of brokers relying on leveraging insurers, racking up fees or profiting from premium finance.

He said however that a better and more sustainable way of making a profit was “delivering a better proposition in conjunction with like-minded firms”.

Barton said that future proofing comes down to two factors – proposition and people.

“Investing in the capability of your firm, growing the ability to serve clients across the broader and higher spectrum – and focusing on proposition,” were key, he said.

Barton emphasised that partnering with firms that can deliver “value-added propositions” with the business was important.

Returning to broking traditions 

Barton said: “It’s about returning to the best traditions of broking. Maybe doing it with a modern twist, working in partnership with a broader suite of firms that can deliver value to clients. It’s about returning to the natural cycle and working with clients for the long-term.”

Simon Mabb, managing director at Romero Insurance Brokers added that success also rests on knowing the customer.

“It’s about investing in your staff and making sure you have got the best people. If you have good staff, they will do a great job at looking after your customers,” he said.

On the flipside of this it could be an opportunity for some, he pointed to the level of constraint within certain organisations that may hinder staff being able to serve customers in the way they want.

Meanwhile, Neil Galjaard divisional managing director at Markel said that it was important to deliver value every year instead of just at year end or at the point of claim.

“It is about long-term relationships,” he continued, stressing that both insurer and broker must understand the client to deliver effectively.

This issue however is wider than insurance, it is about tax, consultancy and legal support too and the relationships there. 

“A good insurer will have those things available, that the broker can leverage,” he said, emphasising that it should be more like a partnership.

Markel’s sales and marketing director Nic Brown said that having the right panel of support is crucial, “but said while it is a moment of truth, does not make it the moment of truth.

Galjaard and Mabb agreed that readily available data was key to this.

If you missed the How commercial brokers can succeed and grow post-pandemic webinar catch it here: