Yes, COVID-19 really did boost broker workloads

While the pandemic created extra work for brokers, it also highlighted the value of the broker proposition, which includes, choice, advice and advocacy, according to Canadian Underwriter‘s 2022 National Broker Survey, which asked more than 250 brokers nationwide about challenges to the broker distribution channel.

Data gathered since the start of the pandemic showed clients prize their brokers, since many needed advice on coverage changes when COVID-19 caused businesses to shut down and re-open alongside shifting provincial health guidelines.

Meanwhile, car owners who were driving less asked insurance providers for discounts, and homeowners made material changes to their dwellings while stuck at, and working from, home.

During these heady times, brokers’ concerns about the growth of the direct-to-consumer model waned considerably — from 62% in 2020 to 53% in 2021.

But broker popularity came at a price. It meant the workload became heavier, according to several comments in the survey. Said one respondent: “[Broker] principals expect client service representatives/sales to push through huge amounts [of business] to compete with the direct market, who only need to know one company’s coverage.”

Where did the additional workload come from? Two places: 1) the hard market, and 2) remote work that emerged from the pandemic.

Robyn Young, president of the Insurance Brokers Association of Canada, said the impact was a double-whammy. On the one hand, the hard market required much more of brokers.

“Typically, prior to the hardening market, a renewal risk would come in, it would be reviewed with your customer and, generally speaking, you’d be able to retain that business within the same market where it was previously placed, at a rate that was probably very similar to what was offered in the previous year,” Young explained. “And now, in the hardening market, there are capacity issues when a risk comes in.

“In many cases, there have been significant [premium] increases, and the broker is obligated to take it to market to see whether there are other opportunities for the customer for similar coverage at a better or similar rate to what they were previously paying.”

While finding clients the best coverage for their needs is fundamentally what brokers do, Young noted there’s generally no need to move a customer from year to year. “That hasn’t been the case [in the hard market],” she said.

The second challenge was remote work, which started when brokers vacated their offices in March 2020 to avoid the spread of COVID-19. The dispersed nature of the workplace created some time challenges.

“I don’t think it’s limited to brokers,” Young observed. “Our whole worlds have changed. Two-plus years ago, we got up in the morning, we went to the office, we had our collaborations…we had access to people.

“Everything kind of individualized with the pandemic. People working from home are working in silos….And maybe those issues seem bigger now, because you do not have access to those same resources immediately, and you have to spend more time to access those resources to get answers.”

 

This article is excerpted from one that appeared in the May issue of Canadian Underwriter. Feature image courtesy of iStock.com/PeopleImages