New risks, new challenges...
Ongoing change in the financial services industry is changing the way corporate and commercial brokers address client challenges. Clients are getting more educated on the financial services industry and are more in tune with what they need to protect themselves if the worst should they suffer a loss. Because of this, clients are increasingly looking for personalised products.
There is an increasing need to bring industry specific skills to be brought to the fore to add value to clients through innovative, cost effective and quality solutions.
Today, potential clients are no longer interested in a pure product solution; they are interested in solutions which directly address their business challenges and the question remains - are brokers getting this right?
Industry stalwarts
Today, a large number of corporate accounts are still 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.
However, there is a new breed of client that is looking for client executives to service their account that have client specific knowledge and can present solutions to their challenges as opposed to products.
We are currently seeing new classes of risk emerging which are basically offshoots of traditional sectors. For example: cloud computing is an offshoot of the traditional technology sector. This brings emerging risks like cyber risk, cybercrime, data privacy, data export/import and much more to the fore.
Don’t count the chickens
While 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.
Getting creative
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.
He will be intent on finding a bespoke and innovative solution, rather than looking for an insurance industry solution to the client problem.
Consider your specialisation
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?
It boils down to economic survival. 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 does not always have the appropriate risk management solution for that client. The 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.
