2 things brokers can do to stay afloat amid market consolidation
Building relationships across the industry and offering consistency can help brokers overcome a slew of future challenges, including quickening market consolidation, an impending recession, diminished capacity and the hard market, say broker executives.
“In order to be able to meet head-on some of the challenges around capacity [and] consolidation of carriers, keep driving [and] building relationships,” advised Kate Hogan, interim head of broker distribution at Gore Mutual, at the Ontario Young Brokers Conference. “The more relationships you have across the industry, the better positioned you are when your top two markets consolidate and suddenly you have a capacity crisis.”
With mergers and acquisitions activity steadily on the rise, brokers may find themselves buying or scooped up by other brokerages in their region or within their network. M&A activity in 2022 is expected to exceed 2019’s record high of 40 M&A transactions in Ontario, according to Insurance Brokers Association of Ontario.
“Keep relationships with the other brokers within your community,” Hogan said. “You might wake up tomorrow and they may be part of the same organization as you. There’s some really exciting opportunities that come from that.”
On the client side, offering policyholders some sort of rate consistency is “key,” especially as inflation continues and the cost of living rises, said another broker executive.
“Generally, people want their policy to stay the same…or they want it to go down. They don’t want it to go up,” said CAA president Matthew Turack. “A little movement is okay, but consistency — while everything else in life is moving, [and] every other cost is going up — will be key in the next five years.”
Some insurance companies are updating their systems, but Turack counselled brokers not to let it impact consumers.
“Brokers need to own their data,” he said. “You’ve heard a lot of those system transformations on the insurance company side. It’s going to be very disruptive. But you need to make sure the customers are not affected. Own your data, own your customer experience.”
Ultimately, going back to the basics of customer service will be of benefit to brokerages.
“As the industry evolves, keep at your core, the things you know are important — providing good service to your customers, and good advice, and being compassionate and understanding your customers challenges,” Hogan said.
“Five years from now, the most critical thing for all of you will still be to provide your customers choice, and to provide them with the value of your work, your advice,” Hogan said.
Feature image by iStock.com/DNY59
