2 key concerns for brokers in 2018

Merger activity and technology are two major issues facing brokers looking forward into 2018, says the new Insurance Brokers Association of Ontario (IBAO) president Brian Purcell.

Purcell talked to Canadian Underwriter shortly after beginning his new role as IBAO president at the start of this year. He elaborated on the two issues below:

 

M&A

Brokers are alive to ongoing mergers and acquisitions between companies or brokers, always analyzing deals for threats as well as opportunities.

“We sort of see [M&A activity] a lot more on the broker side, but it’s always a risk on the company side,” Purcell said. “Once you get some M&A in that [company] area, you start losing choice for the customer. Brokers start losing companies that they deal with.”

On the broker M&A side, if brokers get “too big,” there are risks related to serving clients, Purcell pointed out.

For one thing, “the service isn’t the same because it’s not an individual office worrying about stuff,” he said. “It’s somebody [in an office] higher up, and things can fall through the cracks or change locally.”

Also, when brokers get bigger, direct supervision in branch offices needs to be maintained.

“I think that maybe falls by the wayside a little bit,” Purcell said. “I know people who have a branch office that they run themselves, and the principal broker isn’t there often or at all. If you’ve got somebody who is a principal broker for five different offices, how do you keep an eye on people?”

 

Connectivity between brokers and insurers

“Technology definitely is our biggest thing right now — just having a ‘one-channel translator’ to deal with all of the different companies’ APIs [application programming interfaces],” said Purcell, who is also broker/owner at James Purcell Insurance Broker Ltd. in Spencerville, Ont.

Also, when a customer is communicating via technology about insurance, it’s important that “everything is going through the broker, or at least the broker has a duplicate connection there,” Purcell said.

It is possible for a customer to go directly to an insurer and ask questions without the broker’s knowledge. But that may make communications clumsy in the event of a claim, Purcell said.

“The client’s going to come back to the broker and say, ‘This is what I was told,’ and it might not have been coming from the broker’s office,” Purcell said.