The need for specialist skills
In an era of ongoing change in the financial services industry, corporate and commercial brokers must bring industry specific skills to bear to add value to clients through innovative, cost effective and quality solutions.
This is the view of Warren Bolttler, Chief Executive Officer of PFP Insurance Brokers, a wholly-owned subsidiary of Price Forbes in London. Bolttler says today a large number of corporate accounts are handled and managed by senior brokers or account executives that have been in the industry for many decades. For most clients, the decades of experience and associated loyalty are highly prized. But the key question is do these senior executives have client specific knowledge?
Bolttler says today we are seeing new classes of risk emerging which are basically “offshoots” of traditional sectors. For example Cloud Computing – 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. Without client industry knowledge it is almost impossible to provide an effective and innovative risk and insurance advisory service to that client. 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. “An ex risk manager from the mining sector for example will certainly have an advantage when trying to assess the client’s perspective on risk management or a specific problem, and will be intent on finding a bespoke and innovative solution, rather than looking for an insurance industry solution to the client problem,” says Bottler.
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 i.e. into the technical, claims and admin teams too?” he asks.
It boils down to economic survival, he adds. “If you can afford to duplicate claims handling, technical and admin personnel across industry specialisation in your business, then you are in a great position to provide the ultimate client centric end-to-end service. However 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.”
“The bottom line is the insurance market doesn’t always have the appropriate risk management solution for that client, and a broker who is experienced in insurance, might not always find the best solution if he/she cannot view the problem from the clients’ holistic risk management perspective. Similarly offering a specialisation throughout the organisation will be a real win for brokers should they have the economic means to offer it to their clients,” concludes Bottler.
