Transparency is not just another buzz word. An open approach to business can offer tangible advantages to brokers and insurers alike, argues QBE's Terry Whittaker
Transparency is one of those concepts that the business world consistently holds up as being an unquestionably ‘good thing’. Almost every major failure of regulation or management is accompanied (with the benefit of 20/20 hindsight) by cries for greater transparency. Similarly, almost every professional institute and business school places great emphasis on the virtues of transparent processes and business practices.
But, as ever with such perceived business absolutes, far less time is spent on the question of why it is a good thing; of how promoting transparency can help businesses to do what they do more profitably, more efficiently or more sensibly. Indeed, all too often the emphasis is on how to stop people doing things badly or inappropriately, not on how to do things better.
In reality, however, when looking at businesses that are mutually dependent for their success – such as brokers and insurers – it is not transparency in itself that is the holy grail, it is the benefits that it can bring in terms of gaining an honest understanding of each side’s business needs, objectives and drivers.
This reflects the fact that such knowledge is a first vital step in not only identifying where the two sides’ strategies are sufficiently closely aligned to make it worth developing partnership plays, but also in removing the barriers to making those relationships work.
Everybody can cite examples of initiatives that made huge sense on paper, but somehow failed to deliver in reality. Often as not when you drill down, such failures are due to local detail, rather than strategic factors. Common examples include the way in which reward systems feed down to those actually doing the business, or problems with the way in which day-to-day flow of information is working, or not.
Promoting the right levels of transparency – and that means both sides being prepared to give and receive feedback on what is not working as well as on what is doing well – helps to identify unintended barriers. These can then be tackled either by changing processes to accommodate specific internal business dynamics or by amending those dynamics. Indeed, it is often the ‘nudge factor’ – the apparently small adjustment that leads to a significant change in attitudes and behaviours – that has the biggest impact on mutual business success.
Equally valuable, the knowledge that comes with transparency can, if used intelligently, enable both better targeting of training and support initiatives, and reduce the wasted time, cost and frustration for all of pursuing ill-conceived initiatives.
But, perhaps most important in the insurance sector, greater transparency between broker and underwriter should help to build the necessary level of trust for brokers to be more comfortable with underwriters having greater access to the end client; a process that in turn creates the necessary transparency for both broker and underwriter to really get to grips with what policyholders want and need.
Of course, while this all sounds both simple and sensible in theory, it is a far harder proposition to achieve in practice. But recent experience with our UK national operation – where we have introduced a more structured approach to understanding the needs and objectives of brokers and to communicating what we are looking for – indicates the effort can be more than worth it.
Simply put, the real virtues of transparency are little more than the benefits inherent in really getting to know your customer.
The insurance sector has to recognise that we do not – and should not – live in a one-size-fits-all world. If underwriters are to achieve appropriate margins, they must have a competitive position built around a clear strategy and a distinct offering. And the same goes for brokers. In the hunt for business growth, however, it can be all too easy to lose sight of the bigger picture or to get bogged down by the impact of insufficiently understood business practice.
No broker or insurer wants to spend time and effort on initiatives that prove to be less than satisfactory. But it is only by building transparency – by being honest about motivations and needs – that we will make the most of the very many genuine mutual opportunities to get the best result for policyholders, brokers and insurers alike. IT