Do clients really want brokers to be risk advisors, too?

Although 30% of commercial lines clients say they want to hear more from their broker about emerging threats to their business, there may be dissonance between their words and their actions, say broker experts.  

Commercial lines consumers in Canadian Underwriter‘s 2021 Trusted Advisor Survey say they are seeking emerging risk advice, but P&C brokers are finding they may actually prioritize low rates. And there is also the time factor: Will clients take the time required for brokers to educate them about risk?

“What we’re finding is some really interesting dynamics in our book of business, where the emerging threats are being completely discounted by cost,” says Jack Mazakian, vice president of Advocis Broker Services during a Canadian Underwriter webinar. 

“Clients are saying, ‘I don’t care so much about the threats that are coming down the pipe, just give me a better price.’” 

Canada’s P&C industry has been in a hard market for three years now, characterized by higher premiums, higher deductibles, and more selective appetites for risk. Brokers have told Canadian Underwriter they are having to re-market some of their clients’ business annually, whereas in a soft market cycle, renewals are far more straightforward.

Facing this dynamic, ways to reduce premium costs is another hot topic for clients, Canadian Underwriter’s survey finds. Fifty-seven per cent of commercial lines clients and 64% of personal lines clients said they wanted to hear more from their broker about ways to reduce their insurance premiums. 

“I’ve been in the business a long time and how to reduce insurance premiums is the Number 1 discussion we have with everyone, and there’s definitely ways to do that,” Mazakian says. “But it’s also a tough discussion today, because we’re coming out of the pandemic and people are a little bit on edge, to say the least.”  

Andrea Collis, president at Collis Insurance Services Group, says trending risks such as pandemic-related business interruption and cyber exposure are important to communicate to clients. 

Collis adds it’s important to emphasize to clients that cheaper isn’t always better. 

“It’s pretty infrequent that do we hear from clients that they’re surprised about how low the cost of their insurance is,” she says. “Right now, in the hard market, I’m sure everyone agrees we’re not seeing that change anytime soon.” 

To get clients to respond to their emerging risks, Mazakian says brokers need to be more communicative with them.  

“The aspect that I think makes the difference with brokers, and with any kind of service provider, is discussing and communicating issues with your clients,” he says. “The more we can communicate, the more we can provide solutions and options.”  

Steve Whitelaw, vice president and general manager at Applied Systems Canada, says technologies such as stand-alone marketing automation applications can aid brokers in giving clients risk advice.  

However, a recent Applied survey found that 71% of brokers are not using them.  

“This technology allows us to have industry-curated content sent to customers that meet the profile,” Whitelaw says. “You don’t have to be a large-scale broker. You can be a small broker to use these tools and take advantage of them.

“The information [is] collected about the customer in-store. Messaging and content can be tailored to their needs. We can track things like open rates, read rates, if there were actions that were taken as a result of the communication. All those can be tracked to see what the real value was.”  

 

 Feature image by iStock.com/zoranm