August 24, 2020 by David Gambrill
Clients would clearly like to see their brokers more often compare and provide multiple quote options to them when first purchasing insurance.
Customers scored brokers “below average” on comparing the coverage of different insurers and presenting multiple quotes to the consumer, according to Canadian Underwriter’s Trusted Advisor Survey, Part I. (The baseline average agreement for each of the statements in this section was quite high — 70% for consumer clients and 68% for personal lines customers.)
Providing choice is a key pillar of the broker model. While most brokers are in fact pursuing quotes from multiple markets and assessing them behind the scenes, that may not necessarily be obvious to the insurance purchaser.
“For brokers, I would say sometimes it’s like the duck on the water,” said David Pettigrew, president and CEO of Harvard Western Insurance. “You don’t see the feet underneath the water going crazy. You just see the duck gliding on the surface. Sometimes the client may not see all of that activity happening behind the scenes.
“The challenge we have as brokers is that we do a lot of work that we don’t tell the client. These results are a good reminder that if you don’t share with clients what you’ve done, they might not understand that it happened. A good example would be: How many options did you look at? How did they all compare? Brokers have quite likely done that work on behalf of the client, but they don’t always share this information. So, it’s always a good reminder to say, ‘The client doesn’t necessarily know what you’ve done until you tell them.’”
That said, there is a balance to be struck when it comes to presenting options and multiple quotes to consumers, brokers say. Vicki Livingstone, manager at Freeman Insurance Agencies Ltd. in Innisfail, Alta., notes that some brokers will lead with their best recommendation, and then provide one or two other options for comparison’s sake.
Commercial lines brokers are more likely than personal lines brokers to provide a formal, line-by-line comparison, says Roger Hacala, past president of the Toronto Insurance Council (TIC), a national commercial brokerage association, and national practice leader of professional and financial services for BFL Canada Risk and Insurance Services. In part, that’s because commercial insurance products tend to be more specialized (and less commoditized) than in personal lines. Also, several brokers observed that they were conscious of their clients’ time when providing options.
So, it’s the broker’s job to make sure they provide advice to the client that best matches their needs. That can be done all sorts of different ways, depending on the client.”
In some circumstances, IBAO CEO Colin Simpson observed, presenting the full spectrum of options to a consumer may wind up doing more harm than good.
“When a broker services a consumer, they have to spend time with that consumer to understand their risk profile,” he said. “Based on that individual’s risk file, and based upon that broker’s experience in the industry, quite often there will be a clear communication path to go down.
“So to offer products, services or prices that do not address that individual’s requirements could be seen as either: a) good, open communication, or b) very confusing, and end up with the client choosing something that is not appropriate. So, it’s the broker’s job to make sure they provide advice to the client that best matches their needs. That can be done all sorts of different ways, depending on the client.”
Canadian Underwriter canvassed the opinions of 653 Canadians who purchased home and auto insurance from a broker, as well as representatives of 159 Canadian businesses (most of them small businesses), and asked them what they thought about the service they were getting from their brokers.
Survey questions were based 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/tolgart