Canadian Underwriter

Looking in the Mirror

August 4, 2020   by David Gambrill, Editor in Chief

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After Canadians were side-swiped by an economic recession following the novel coronavirus pandemic, brokers took many calls from clients requesting premium relief.

One broker told Canadian Underwriter that his brokerage was getting calls from clients saying they could not pay their premiums, but they still didn’t want to lose their insurance coverage. “What do you do with that?” he said.

In all of this, brokers made a lot of policy changes on behalf of their existing clients; no  additional premiums — and hence, commissions — were coming in as a result. Brokers “are doing all of this work for negative endorsement activity,” as Graham Haigh, vice president of broker distribution at Wawanesa Mutual Insurance Company, put it recently in a Canadian Underwriter webinar. “Which means [they] are taking cash out of [their] pockets in order to deliver this exceptional service to our mutual policyholders. We certainly recognize that brokers are an essential service to consumers.”

The brokers’ sense of pride shines through in the results of the second part of our 2020 Trusted Advisor Survey. In the survey, which was conducted in the middle of the pandemic, we asked brokers to rate themselves along various dimensions of what essentially makes up the broker value proposition — advice, choice, advocacy. To no one’s surprise, brokers tend to rate themselves very highly in core aspects of their work.

Fully 96% of brokers in our survey agreed with the statement that they were a “trusted advisor” to their clients. And rightly so, as many would argue, based on the circumstances noted above.

A perfectionist might ask what happened to the other 4% of brokers who didn’t feel like they were nearly-perfect trusted advisors. A detailed look at the survey results suggest a few areas in which brokers felt they could tweak the service they provided. One broker who took the survey summed up the overall spirit in which the survey was intended.

“This is not an easy job, by any stretch,” the broker commented. “Just when you think you have a solution, [ABC] market can close it and you have to look for and learn brand new markets. There is very little time on the job to learn and many hours outside of work reading and learning. This is a requirement in my opinion in order to be poised to offer advice to your client on a moment’s notice. Soft skills, and life skills in general, are frequently called upon in order to wear as many hats as required in this business. Brokers must be well-rounded in order to rise up to the challenge.”

Trusted Advisor Survey: Part 2

Last month, in Part 1 of our inaugural broker Trusted Advisor Survey, Canadian Underwriter asked more than 600 personal lines insurance consumers and 160 commercial lines clients what they thought about the services they were getting from their brokers. By and large, consumers gave their brokers high marks on key aspects of the broker value proposition.

In this, the second part of our four-part Trusted Advisor series, we asked Canadian P&C insurance brokers to rate themselves on dimensions related to advice, choice and advocacy.

Part 3 of our series, to be published in the next issue, will do a deep-dive comparison of how consumers and brokers rated themselves on key aspects of the broker value proposition. The gaps identified will present opportunities for brokers to get to know their clients better. Part 4 will discuss concrete ways to overcome the identified gaps.

Who were the brokers in our survey?

More than 180 brokers across Canada completed the second part of our Trusted Advisor Survey. Thirty per cent identified as owners or principals. About one-quarter (26%) said they were producers with no management responsibilities, while 20% said they were producers with some management responsibilities. Most (72%) reported that their brokerage dealt with a mix of personal and commercial lines. Most (24%) of respondents had between 20 to 49 employees at their brokerage. Respondents averaged 21 years of experience as a broker. The average estimated age was about 53 years old. There was a 52% (male) and 48% (female) gender split.


Service to clients

Brokers scored themselves very highly in almost all aspects of the survey. Average scores tended to be very high, ranging between 85% and 95% for commercial and personal lines brokers alike, with the only exception being a 72% average when personal lines brokers answered questions about service offered at the time of renewal. Notwithstanding the high overall averages, there were some nuances in how brokers rated themselves in specific areas of service.

New business

Generally speaking, commercial and personal lines brokers tended to give themselves lower marks for comparing coverage of different insurers with their first-time customers. They rated themselves even lower for presenting multiple quotes to clients.

This came up in our consumer survey as well (Part 1). Several brokers told Canadian Underwriter this is a somewhat nuanced area of the business and depends a lot on the personal style of brokers and customers alike. For brokers, two factors are at play when providing quotes to clients, as Brenda Rose, partner and vice president of FCA Insurance Brokers puts it. “We’ve got conflicting expectations,” she said. “One thing is to offer the most efficient process for the client and get the best match for their needs quickly. The other is to have a long, in-depth conversation about all of the different options that we might have available, some of which might be entirely unsuitable, and get into the fine print. Different consumers have different desires for how in-depth those conversations are. We have to be prepared if the customer wants the whole discussion.”

Business renewals

In this category, personal lines brokers rated themselves above average on “finding the best insurance available at the right price for my client’s budget” (81% score compared to a 72% average), whereas commercial lines brokers rated themselves below average (81% compared to an 85% average).

Conversely, commercial brokers were far more likely than personal lines brokers to give themselves better grades for giving their clients advance a heads-up on rate increases. Commercial brokers rated themselves a 91% on this dimension, versus 67% for personal lines brokers.

For many brokers, knowing a particular client faces a rate increase is almost entirely impossible to know prior to the renewal. “We don’t control the market,” says David Pettigrew, president and CEO of Harvard and Western Insurance. “We just try to understand it and then help our clients navigate it and find the best solution. When the markets start changing in an unpredictable fashion, it’s difficult to set expectations with our clients. It’s difficult to tell them what’s going to happen when we don’t know with confidence ourselves. That’s an ongoing challenge for brokers.”

Claims service

When it comes to advocating to insurance companies or claims adjusters on behalf of their clients, brokers tend to give themselves lower scores. Ninety percent of commercial brokers said they do this (the average was 95%), whereas 87% of personal lines brokers said the same (personal lines average was 89%).

In the comments, several brokers reported a taking a somewhat hands-off approach once the claim process was underway. Said one broker: “I generally do not interfere with claims unless there are problems with the client or the client has problems.”

Still, brokers typically let the client know they were available to help. “I explain to the client that claims don’t always go smoothly, generally due to miscommunications,” one broker said. “If the client is unhappy with an explanation, or if there are challenges with the adjuster, I tell my client to please call me and I will work to moderate the discussion.”

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