Exclusive: More than half of brokers fear for the future of their business as market uncertainty grows

Insurance brokers are concerned about the future of their business, according to the latest research from the Society of Insurance Broking (SIB), with more than half (51%) of the 341 brokers surveyed fearful about the future.

CII strategy and operations manager Matt Hall, who supports the institute’s advisory board and aligns the board’s finding with CII’s strategic thinking, told Insurance Times that the uncertain times we find ourselves in has only served to exacerbate the problem, and has shone a light on just how important customer trust is in the insurance industry.

“We are in uncertain times, whether that is increased competition, changing regulation or the uncertainty created by Brexit, and part of the importance of customer trust is the loyalty that comes with it,” he said. “Insurance is a promise to put things right when they go wrong, which makes it very different to other commodities you buy, so it is absolutely crucial that customers can see insurers are acting in their best interests.

“These uncertain times make it more important than ever that we can understand our customers and support them in their time of need.”

Trust

The survey found that some 99% of brokers felt that trust was a defining feature of their business, and 94% of brokers agreed that this uncertainty makes knowing your customer is more important than ever.

Liz Foster, non-executive director of the SIB, said that brokers who were successful in understanding their clients would be the ones who would succeed.

“From this research it is clear how much emphasis the broking profession places on the human element in the insurance process,” she said. “Insurance is fundamentally about people, and trust is a significant factor for society’s engagement with the insurance sector.    

“Although brokers are realistic about the need to embrace new technologies, it is still essential for them to know their clients and be able to assist them in making important decisions about the insurance products that meet their individual needs. Brokers who know their clients have nothing to fear.”

More than three quarters (79%) of brokers said that such new technologies and automation are making personal relationships more valuable to clients, and Foster said it was vital for brokers to combine this adoption of new technology with human interaction.

“Nothing beats the very best in human expertise and professionalism, something that our broker members pride themselves on, and their client’s value greatly,” she said.

Data

Hall said that the way insurers use data is playing an increasingly important role in how insurance is viewed in the eyes of its customers.

“We see a lot from our members about the perception of how insurance uses data, and whether it is being used for the benefit of the customer,” he said. “There is a real part our members have to play in demonstrating how that data can be used in a beneficial way.

“A good example of this is how increasing numbers of customers can access insurance products at the click of a button, such as through aggregator websites, but with more complex products those price comparison websites don’t really cut the mustard, and that is one area where our members can demonstrate the need for customers to be able to trust their insurers and their brokers.”

The survey also found that nine out of 10 brokers agreed that trust is demonstrated to clients through high levels of professional conduct and professional qualifications, and Hall said such qualifications are vital for gaining that public trust.

“Customers need to understand that the people they are speaking to are well-qualified, understand the issues facing their customers and have the specialist knowledge to be able to recommend the right product to them,” he said. “Professional standards and qualifications are a key part of gaining public trust.

“The CII qualifications are written alongside market practitioners and equip individuals with the ability to really go out into the market and advise on the right products for their customers.”