How to grow commercial lines during tough economic times

How can brokers grow their commercial lines practice while inflation concerns and recession rumblings continue to impact Canadian businesses?

For Roberto Rei (pictured left), vice president, sales and business development, Ontario West, Intact Insurance, the current market presents both challenges and an opportunity.

“A lot of brokers have never been through one of these hard markets or this kind of inflation or recessionary cycle,” Rei said. Brokers who have been around for two decades have seen the Great Recession, the bursting of the Dot Com bubble, the recession that followed 9/11, and, of course, the economic turmoil of 2020.

This level of inflation? You have to go back to the early 1980s.

“Brokers certainly have to be resilient to overcome what’s at hand,” said Rei. “The current situation is unprecedented and puts new pressure on them.”

So how can they survive and thrive?

Be different

“You’ve got to differentiate yourself,” said Rei. “Realign to focus even more on service and sales, and really create an opportunity to ‘wow’ your customers. The insurance business is really about relationships. Not only with customers, but with underwriters, too. During tough times, you need an ally in front of you as well as behind you.”

He acknowledged that these are times when “customers are struggling,” and looking to tighten expenses, including their insurance coverage. Brokers can ensure that they don’t end up getting cut out by creating and maintaining relationships that last through both good times and more challenging times.

“People like to buy from people they trust and have a relationship with,” Rei said. “We certainly want to be in that position with our brokers. We know they all want to be in that position with their customers.”

Be focused

Building trust and relationships means choosing where you put your effort and attention, noted Alastair Lebo (pictured right), vice president, commercial lines, Western Canada, Intact Insurance.

“Don’t spread yourself too thin,” Lebo stressed. “Investing in relationships takes effort. While you’re fostering those all-important relationships with key customers, also create bonds with key markets and underwriters.”

While relationships are important, Lebo noted that so is the value that is brought to those relationships.

“Brokers provide such incredible value to the business customer,” Lebo said. “Commercial lines needs are complex, and the customer needs to have the right protection, whatever the economic climate. The broker who’s close to the customer understands what kind of coverage the customer needs, and the customer trusts their recommendations.”

Be transparent

With solid relationships in place, even delivering bad news can help build the bond.

“Inflation is affecting the insurance business,” Lebo said, pointing to ongoing global supply chain issues and their impact on auto repair costs and timelines. “It’s good to be open and honest about how that might impact a claim when it happens. It’s critical to be completely honest about what’s happening in the marketplace, so the customer is prepared.”

Be present

For Rei, that customer focus, responsiveness and transparency are key to succeeding in tough times.

“Growing commercial lines in this climate is really about going back to basics,” he said. “That means putting customers at the forefront of everything that we do.”

Such an approach includes creating a bespoke experience for the customer: informing them and guiding them through the insurance buying and renewal process, while explaining what is covered and how it is priced for their unique situation.

Covering all this in one meeting, when a customer’s policy will be up for renewal in two months’ time, might be attempting to do too much into too short of a timespan.

“Schedule specific touchpoints along the year, not just once in the cycle,” suggested Rei. “Be more focused with each of these discussions. Take the time to explain both the market and their coverage, and make sure they’re not sacrificing coverage for price.”

Be an advocate of loss prevention

One of the resources a broker can flag at these regular touchpoints is the benefit of a loss prevention visit from their insurer.

“That is a strong way to add value to the customer. Help them arrange for their insurer to have an expert come out and identify what sort of potential for loss there might be at a customer’s location,” said Lebo. “Loss prevention experts evaluate the business premises, from top to bottom, from a fire hazard perspective, a water loss perspective, and an overall liability perspective – all of which gives the customer helpful insights into how they can mitigate their overall exposure.”

Be curious

Lebo also suggested brokers “get curious” when talking to their customers and go deep with their questions.

“What do your suppliers do? Who do you rely on to manufacture your product? Who are your end customers? What is a typical day in the life of your company? Who is visiting these premises? This line of questioning gives the broker a strong understanding of what’s taking place in this person’s business,” said Lebo. “It also gives the customer a sense that the broker really cares about them, and their business.”

Be adaptable

To more effectively support brokers, Intact Insurance recently changed the structure in its Ontario division to Centres of Excellence, organized by lines of business. Its Western division made a similar change in 2022. Atlantic Canada and Quebec are similarly aligned.

As Rei and Lebo see it, this approach benefits commercial lines brokers across the country.

Explained Lebo, “We’re putting all the commercial lines teams together, getting all the best commercial minds on one team, so that we can develop and share more best practices and support our brokers better.”

Rei added that he expects the focus provided by the Centres of Excellence, to positively impact broker growth.

“As an organization, we’ve really shifted into growth mode again and we are working with brokers to help them grow. Centres of Excellence helps us really focus and better deliver what brokers need in terms of service, on both new business and retention, on training, as well as relationship building.”

Intact Insurance is Canada’s largest home, auto and business insurance company, the choice of more than four million customers coast to coast. Intact Insurance is a member company of Intact Financial Corporation (TSX: IFC), the largest provider of property and casualty insurance in Canada, a leading provider of global specialty insurance, and, with RSA, a leader in the U.K. and Ireland.