Canadian Underwriter

Special Report: Brokers and their customers, by the numbers

March 16, 2016   by Philip Porado

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Exercise patterns on Fitbits, grade point averages on transcripts, stock market fluctuations on the TSX— numbers tell fascinating stories. And looking at the right numbers in the right way can also provide clues to improve both a firm’s bottom line and the experiences customers have.

So let’s take a closer look at the Broker and Client Behaviours and Opinions Survey, which examines brokers’ attitudes about the experience and value they provide to clients, and those personal lines customers’ views on the same metrics.

Read: Broker and Client Behaviours and Opinions Survey

The dichotomy between brokers and consumers’ answers about various success metrics is relatively narrow—about eight percentage points for most responses. When asked to rate the statement “My clients trust me rather than the brokerage,” a net agree of 82 percent of brokers compares favourably with 74 percent of consumers agreeing with the statement, “I trust my broker rather than the brokerage.” But that’s only when examining the aggregate, or “net agree,” response sets.

When you look at percentages in the two fields that make up the net agree totals (“strongly agree,” and “somewhat agree”), the data starts to diverge. And that divergence contains some lessons for Canadian P&C brokers.

Revisiting the trust question, 45 percent of brokers strongly agree with the “my clients trust me” statement, compared with 20 percent of consumers. The 25 percentage point gap suggests there are opportunities for brokers to educate consumers about the value they provide. Further, age breakdowns show consumers become gradually more cynical as they get older.

Read: How do you measure up?

Likewise, 97 percent of brokers net agree with the statement, “My clients trust me to pick the best available option for them.” Among consumers, it’s 89 percent—a narrow gap. But when you isolate strongly agree responses, 76 percent of brokers believe they’re making the best choice, compared with 38 percent of consumers who think the broker executes on that expectation. Again, younger consumers (those under 35) appear to place higher value on the broker’s role, with 47 percent saying they trust brokers to make the best coverage choice.

And then there’s trust, which brokers appear to value more highly than consumers. Both sets of respondents place above 90 percent when you look at net agree responses to, “Trust is an integral component in a client-broker relationship.” But broker responses carry more weight in the strongly agree column (91 percent), compared with only 50 percent of consumers.

Notes on methodology

An online survey was completed by 152 Canadian insurance brokers who were further screened by seniority (top managers and decision makers).

A separate online survey was completed by 1,116 Canadians who own auto insurance, home insurance, or both types of coverage.

Comparisons in the narrative use responses from consumers indicating they work with brokers (as opposed to those who buy direct).

Both surveys were fielded in late October 2015 and took 10 minutes to complete. In both cases, data was weighted to accurately reflect the distribution of the surveyed populations across Canada.

There also are sharp divergences on the strongly agree line when brokers and clients respond to a statement about service levels. While 73 percent of brokers strongly agree that “My clients come to me for the superior customer service/ experience they receive,” only 40 percent of clients who use brokers fall into the strongly agree column. Interestingly, though, 55 percent of consumers under age 35 place high emphasis on customer service, compared with 35 percent in the 35-to-54 age group. This suggests younger consumers who use brokers place a premium on face-to-face consultations.

Read: Best practices for demonstrating your value to clients

Then there’s transparency, choice and price. Brokers and their customers are fairly aligned on broker transparency— with 87 percent of brokers saying they strongly agree they have a duty to be “as transparent as possible,” and 74 percent of clients saying they make good on that promise.

But there’s some divergence when both parties look at the coverage options the broker lays out. While 76 percent of brokers strongly agree with the statement, “I make sure my client is aware of all the possible options before making a purchase,” only 40 percent of consumers strongly agree with the assertion.

The gap’s narrower on price, with 63 percent of brokers strongly agreeing with “I make sure my client is getting the best price available for them” and 41 percent of consumers strongly agreeing with a similar statement.

Nearly all brokers net agree with the statement “I make sure my clients understand why the product I am offering is the best for them,” with 80 percent saying they strongly agree. Consumers who use brokers are far behind, with only 40 percent in the strongly agree column.

Likewise, while 70 percent of brokers assert they go above and beyond when attending to clients, only 31 percent of clients strongly agree with that statement. And, while 61 percent of brokers strongly agree they provide clients with “the type of service they will not get anywhere else,” only 25 percent of clients concur.

While the final six answer sets show brokers and consumers are aware there’s more to the insurance equation than price, the data also suggests brokers need to educate clients about all the work they do to ensure consumers receive the best coverage. In an economic climate in which consumer transactions are becoming increasingly impersonal, it’s work worth doing.

Copyright © 2016 Transcontinental Media G.P. This article first appeared in the February 2016 edition of Canadian Insurance Top Broker magazine

This story was originally published by Canadian Insurance Top Broker.