Change and consolidation in the financial services industry is allowing brokers the opportunity to redefine their corporate identity and service offering.
For the larger brokers size, international presence and influence in the local market are often strong differentiators in a highly competitive market place providing clients with the necessary access to specialist expertise and markets that would simply otherwise be unavailable to them.
“However,” cautions Warren Bolttler, CEO of PFP Insurance Brokers, a wholly owned subsidiary of Price Forbes in London, “with size comes the need to streamline and standardise service procedures in order to create efficiency.” Bolttler says consolidation has indeed seen many of the larger players having to spend time ensuring that their internal procedures are adequately integrated to produce efficiencies.
This poses a significant challenge to brokers who have to try and accommodate clients whose service requirements do not easily fit into the standardised service procedures.
Bolttler says delivering a personal and bespoke service means taking clients needs and preferences as a starting point for all service delivery and in order to make this a reality for clients, brokers cannot rely on standardised procedures. “They need a relatively high level of flexibility and innovation and this is where the smaller brokers really have an advantage,” he says.
Simpler internal structures free up valuable broker time, providing the broker an opportunity to spend more quality time with the clients assessing his/her needs and adding value where it is really needed. “A morning spent with a client on something simple like a renewal questionnaire, for example, can often highlight grey areas that have not been adequately addressed by the ‘risk and insurance clauses’. The devil is indeed in the detail and this is where a truly bespoke service adds immeasurable value to the client,” says Bolttler.
Bolttler says the value of a bespoke agency also extends further than just the service aspect. Today we are seeing new classes of risk emerging which are basically offshoots of traditional sectors. Cloud computing, for example, is an offshoot of the traditional Technology Sector. This brings emerging risks like data privacy, data export/import and much more to the fore.
“Whilst every client expects their broker to have insurance industry knowledge, it is not always a given that the broker will have the client industry knowledge and in today’s highly regulated and competitive business environment, understanding specific industry dynamics is absolutely key.
Brokers essentially need to become risk partners with their clients clearly understanding aspects such as the business’ risk management function, risk appetite, risk tolerance and so forth,” says Bottler.
In a move to provide these necessary skills, the trend today is for brokers to source these industry specific people from the client industry itself rather than the insurance industry.
Considering the importance of industry specialisation, Bottler says brokers need to evaluate how far into their organisation the specialisation should go. “Is it sufficient to have industry experts operating only at the account executive/client facing layer? Or does it mean that if you want to be truly client and or industry centric, you have to create the specialisation or ‘verticalisation’ all the way through the organisation?”
The latter is obviously preferable but in reality, the market is competitive and when margins are tight, organisations will have to settle for the industry specialisation being offered at a client-facing layer only.
Bolttler believes the odds favour smaller brokers to get this balance right and find the appropriate bespoke and innovative risk management solution for that client as opposed to a general insurance industry solution.
Prepared on behalf of PFP Insurance Brokers by Cathy Findley Public Relations