Generalist brokers ‘can’t stay ahead’ in ‘asymmetric’ economic downturn – Partners&

Generalist brokers will not be able to “stay ahead” as the economy progresses through the Covid-19 pandemic because “every sector in the economy is heading in a different direction”, said Phil Barton, chief executive of brokerage Partners&.

Speaking at the latest Insurance Times webinar, in association with Markel UK, titled ‘How commercial brokers can succeed and grow post pandemic’, Barton emphasised that “a generalist [broker] just can’t stay ahead of where individual sectors are heading”.

Instead he advocated a need for sector specialism if brokers are to survive and flourish through the continuing coronavirus pandemic.

He said: “The pandemic and the impact on each sector of the economy has been markedly different.

“The rate of change has been so great that a generalist just can’t stay ahead of where individual sectors are heading, the issues and challenges that those sectors are facing.

“Frankly, every sector in the economy is heading in a different direction – it’s the most asymmetric downturn we’ve ever had. So, specialism comes to the fore in that landscape, in that environment.”

Know your customer

Barton was responding to comments made by fellow panellist Simon Mabb, managing director of commercial insurance at Romero Insurance Brokers.

Mabb noted that by embracing a sector specialism, brokers can really develop an in-depth knowledge of their customer base, which enables them to add value to clients by offering services and products that are tailor-made for their needs and requirements.

“I think where it works best is where you have got sector specialisms – you can really drill into that sector and understand that particular sector, and then I think you can really get to know your customer in a really in-depth way. Brokers that have those schemes and specialisms, it does work very well,” he said.

“The more we know about the customer, the better the products and the better the service we can deliver.”

At his company, for example, they have a set focus on the hospitality sector, which has “enabled us to bring products out pre-Covid that are things that they are looking for; what are the risks that they are interested in, what are the things that stop them doing business?”

He continued: “They’re the things that we’ve been able to develop, products with insurers that fit that customer – not just rock up with a standard suite of products and say take your pick from these.”

Furthermore, zoning in on a particular sector also moves the conversation away from being purely price focused and instead centres around value – especially if brokers can demonstrate their sector knowledge and how they can use this to benefit clients.

“You’re taking away that constant price driving down position of just chasing the nearest pound. You will get customers that will want to do that, but you’ll get a lot of customers that fundamentally just want good value for money with a decent product that suits their business. That’s what we need to be aiming for and providing all the services that fit round the outside,” Mabb added.

Working in partnership

This strategy is also an advantage for insurers, commented Neil Galjaard, divisional managing director at Markel UK.

He said: “It’s about working together with the right insurer partner-broker partner. So, I genuinely believe that working with the right insurer in the right sector.

“Partners are really important in this process. What’s clear is if insurers and brokers work together on the assessment of those risks in the first place, really understand what we’re insuring and then price appropriately for that risk - it is about how we work together on this as opposed to perhaps the more transactional, commoditised type of relationship that may have existed previously.”

Also on the panel was Nic Brown, sales and marketing director at Markel UK. The webinar was held on 24 November and chaired by Insurance Times associate editor Katie Scott.