September 26, 2019 by Adam Malik
As the market transforms, risk managers are looking for their brokers to keep them up to speed on market dynamics and why they are happening, a panel discussion said.
Times are more challenging for everyone in the insurance industry, which means brokers need to ensure clients are not left in the dark, said Aon Canada’s Cheryl Barker. In fact, it’s a broker’s duty to make sure that’s not happening.
“It is absolutely the responsibility of the broker to make sure that clients are up to speed as to what’s going on in the marketplace, and to be really transparent about how long this cycle we think is going to last, and how long it’s going to take to do your renewal,” she said that the recent RIMS Canada Conference in Edmonton. “The typical [120-day] renewal process that we’ve been doing, we’re starting at 150 and 180. We’re having conversations here with clients … because we want to make sure everyone’s positioned and everything is going well.”
Allianz’s Linda Regner Dykeman said the ball is in the court of people like herself to be the eyes and ears for risk managers and help them have important discussions with the key people in their organization.
“As a broker and a carrier, it’s incumbent upon us to proactively reach out as well, and make sure that you’re aware of what you’re seeing,” she said. “We’re in the worst decade ever for the insurance industry when you look at weather-related losses,” and it’s a real success when risk managers can summarize the issues to their board effectively.
From a buyer’s perspective, the quality of the relationship with brokers and carriers should figure into the discussions at renewal, said Steve Pottle of Thompson Rivers University. The work brokers and carriers are doing behind the scenes will pay off for the buyers during times like these. “You really need to value your long-term relationships, because this is when it’s going to help – in the bad times.”
Pottle pushed for a change in attitude when it comes to buying insurance. For example, a better job needs to be done when it comes to discussing premiums, he said, and the approach should be similar to that of the typical consumer. He noted that consumers will pay extra for quality or a certain brand when buying a car or a hotel for vacation “The question I have is: Why don’t we use the same thing for [commercial] insurance coverage?” said Pottle.
“Why are we not looking for the best quality in our coverages, and the best carriers out there?” Pottle said of risk managers looking for commercial insurance. “Why not pay a little bit more? Because on the back end, that’s what you’re really paying for. You’re paying for quality of service, claims, you name it.”
Too often, the focus of the discussion is on the percentage change in premium when the time for renewal comes up. “I’m not saying insurance is a commodity, but we’re really good at paying more for something that we think is quality. But I think we should think about that when it comes to our insurance programs.”