August 24, 2020 by David Gambrill
Customers are looking to their brokers for more information about how to reduce their losses, according to Canadian Underwriter’s Trusted Advisor Survey.
Risk is indeed top of mind in the policy renewal portion of the survey, which sought opinions from 653 personal insurance customers and representatives of 159 businesses, customers rated their brokers below average on telling them ways to prevent loss or damage.
Elsewhere in the survey, consumers were asked, “What topics would you want your broker to talk to about more?” The top answer for both commercial lines clients (52%) and personal lines customers (66%) was: “Ways to reduce my insurance premiums.” On the commercial side, 31% of business clients surveyed said they wanted to talk to their brokers more often about “emerging threats to my business.” Another 30% wanted to hear more about “safety tips to help me protect my business against property damage.”
On the commercial side in particular, clients expect to hear more from their brokers about risk-based advice that doesn’t simply reflect a transactional price quote and coverage explanation. It’s a shifting expectation of business clients who have more access than ever before to information about their insurance products and services. Seventy-nine percent of consumers in our Trusted Advisor Survey rated themselves as either “very knowledgeable” or “knowledgeable” about business insurance products and services. Summed up simply, the new attitude for commercial clients may be, “Tell me something I don’t already know.”
A trusted advisor is part of the client’s decision-making process, not just an order-taker, as Insurance Brokers Association of Canada (IBAC) president Kent Rowe puts it. “One of the bigger positives that I took out of this survey is that I think clients view us more as being a trusted advisor, versus somebody through whom they transact business,” he said. “A trusted advisor is someone you call before you make a decision. Somebody you transact business with is someone you call after you have made the decision.”
Rowe and David Pettigrew, president and CEO of Harvard Western Insurance, believe brokers are adapting to these evolving consumer expectations.
“All of the leading brokers, I would say, are moving towards a risk advisor skill set and thought process,” said Pettigrew. “They are helping educate clients on understanding their risks and navigating them, and then using insurance where necessary or desirable; not just providing insurance-specific risk services. This is a trend, especially in the commercial insurance market.”
Access to information about claims trends and loss data is key to succeeding in this new role. As Pettigrew points out, brokers will need to improve connectivity to insurers’ back-end systems to access the kind of claims and loss trends information that would be beneficial for clients to know.
But there may be a limit on how far a broker might stray into the territory of risk guidance. “Providing other insurance options to address the risk — that it’s not just about a price, and it’s not always just about buying more insurance — that’s one conversation,” as Brenda Rose, vice president of FCA Insurance Brokers, points out. “But the whole concept of risk control in a physical sense is an entirely different qualification. And not everyone who has just graduated and got a [broker] licence is equipped to do that. It also depends on the nature of the risk that you are talking about.”
Rowe is confident brokers will adapt to customers’ expectations as they evolve. “Brokers are talking every day about enhancing customer experience,” he says. “A huge part of that is learning what your customer wants, and delivering on those wants. For the most part, I think brokers are doing a tremendous job in that area. As brokers, we have been very good in the past at adapting to various market conditions. We will continue to evolve and match the needs of our customers with the services that we offer.”
Consumers would seem to agree, the survey results show.
“I’m really happy to see that [the survey shows] we are able to give clear descriptions on the product, we are assessing their needs, and we’re making recommendations that suit their needs,” says Vicki Livingstone, manager at Freeman Insurance Agencies Ltd. in Innisfail, Alta. “We are trusted advisors. I think that’s awesome. That is the definition of a broker.”
Canadian Underwriter asked respondents what they thought about the service they were getting from their brokers. We based the survey questions on the very services that brokers say they provide to consumers. It was conducted Mar. 6 to 13, just before the pandemic went into full effect (the World Health Organization declared the novel coronavirus to be a global pandemic on Mar. 11).
Feature image by iStock.com/marrio31