With an influx of new players into the insurance market – think supermarkets, online retailers, car manufacturers, airlines – the role of the insurance broker as a trusted and expert adviser who can cut through the “noise” and provide value for clients has never been more important.


Insurance dates back millennia to Babylonian times, with the concept as we know it coming into its own in the seventeenth century. The first property covers can be traced to the Great Fire of London in 1666 and the earliest business policies date from the late 1680s (and led to the establishment of Lloyd’s of London). Back then, insurance was complex. Today, it is even more complex.


It is the role of the insurance broker to understand the complexities of cover and help clients secure the most appropriate policies to meet their risk needs. As more providers enter the market, more policies are created and more risks covered, the value of the broker is highlighted.


It is this value that has been captured in a 2020 Deloitte Access Economics report commissioned by the National Insurance Brokers’ Association (NIBA).


“Insurance brokers are intermediaries but they offer real support, and most importantly genuinely valuable advice, in the areas of risk, risk management and risk financing – something not done by other professionals”, said NIBA President Eric Harris.


The Economic Value of Insurance Broking details the benefits of the profession to clients, insurers, the economy, government and broader society.


“A broker is not just someone who sells you an insurance policy; they are professionals who take a holistic view of your business or personal circumstances, considers the unique risks you face and works with you to formulate strategies to mitigate those risks including transferring risk to insurance providers,” explained EBM CEO Ward Dedman, who is also a NIBA National Board Member. “A broker is in fact a buyer of insurance acting as an agent of the client in doing so and works in their best interest as prescribed by law.”


The report found brokers provide incredible value for clients at every stage of the insurance cycle – from pre-sale services such as detailed risk assessment, evaluating insurance needs, policy advice, assistance with policy wording and advice on insurance coverage to purchase and through to post-sale services like updates on information and regulation, claims management, renewals and ongoing service as a trusted adviser.


“The client journey when using a broker is not as simple or transactional as walking into a store and buying a product, it is a relationship-based business that creates many sources of value,” said Deloitte Partner John Mahony.


It is estimated that it would take clients, on average, eleven hours to complete a risk assessment of their business, compare insurer offerings and apply for cover.


“And when it comes to bespoke covers, a broker is invaluable. Broking groups like those of EBM source and negotiate solutions from local to international general insurers and with niche speciality markets, and if it isn’t available, we will build the solution and then find a suitable carrier to provide the security,” Ward said.


An insurance broker’s value to clients includes:

  • Quality of advisory service: ranked as the number one factor by clients when choosing insurance.
  • Tailored risk-management solutions: 40% of clients are under-insured or not insured at all, before engaging a broker (on average).
  • Greater choice: the average NIBA broker offers products across over 10 different insurers.
  • Time savings: saving each client an average of 11 hours, which equates to more than $230 million in time savings from business customers.
  • Claims support: saving each client an average of 2.5 hours in the claims process, and where 41% of SME clients agree that it would otherwise have been a ‘much harder’ process.
  • Understanding and managing risks: noting that brokers identified 62% of clients had limited understanding of their risks.

“As brokers, we pride ourselves on bringing experience and expertise to our clients. We aim to be trusted advisers and risk partners who advocate for our clients at every stage of the insurance lifecycle - none more so than when it comes to having a claim. Insurance should be a considered purchase, and a broker is the only professional that can give this level of advice taking into account a client’s individual circumstances and needs,” said Ward.


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