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How brokers can take back market share from directs


April 25, 2022   by Jason Contant

Vector illustrating market share concept

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There’s plenty of opportunity for the broker channel to be able to take back some market share from the direct side and agent side, says Joseph Carnevale, president of the Insurance Brokers Association of Ontario (IBAO).

Brokers can gain a competitive advantage by continuing to make technological gains, Carnevale says, and by making the most out of traditional broker strong points – knowledge, advice, experience and long-term relationships.

“If we can do the same speed of service as some of the directs do, because they’re only dealing with one market and we can do that with all the markets represented… [this] means we are so much further ahead than anyone else,” Carnevale says in an interview with Canadian Underwriter. “We really can cater to all the needs of our clients, and the ones that haven’t discovered the broker channel yet.

“I think you’ll find the numbers will begin to suggest that as far as market share goes, brokers are really picking that up. Because consumers ultimately realize that when you’re buying something from the broker channel, you’re buying the knowledge, the advice, experience and long-term relationship. And that’s what you need when it comes to insuring your assets, insuring the things that are important to you. That’s what consumers are looking for and that’s what we will continue to provide them.”

Carnevale made his comments during a discussion on brokerage consolidation and the traditional broker value proposition.

Brokerages big and small will continue to thrive in the industry, Carnevale says. “If anything, I would say we’re better able to compete because we have so many people committed to the future of the broker channel.

“The fact that people are willing to invest the sorts of multiples that they’re willing to invest in to purchase brokerages already tells you they see it as a great opportunity, because they know the business opportunities are there to grow,” Carnevale says. “If there wasn’t any interest in this [channel], if people thought it wasn’t going anywhere and it was dying, they wouldn’t be investing the sort of money they’re investing to help buy up brokerages.”

Advice continues to be a strong point for brokers, Carnevale adds. Whether it’s a business owner or an individual who’s looking for insurance, the number of consumers who know exactly what kind of insurance they need, and don’t need any advice, represents “a really small segment of the marketplace,” he says.

“I think by and large people are looking for the right coverage at the right price, Many times, people don’t know what they don’t know. They don’t know, for example, that they don’t have enough coverage… until they speak to a professional broker.”

It’s also important to interact with consumers in the way they want. This doesn’t mean every single transaction going forward has to be digital, Carnevale says. “It’s about supporting consumers how they want to be supported. While consumers may do their own research, in the end, they want to make sure they’re making the right decision, and that’s where brokers play a huge role.

“Ultimately, it’s the broker understanding the client’s needs and providing solutions. That’s what we’re about, and that’s what we’ll continue to do for the next 100 years.”

 

Feature image by iStock.com/Ja_inter


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