The challenge of adding value

Rather than dwelling on the challenges facing brokers as threats to survival, it is time to acknowledge the opportunities they present.

New regulation, market entrants and distribution channels are commonly seen as conspiring to threaten the viability of the broker, with many quick to assume the worst.

While smaller intermediaries are commonly thought to yield to pressure first, in fact, larger provincials have been the ones to change first and there is no single definitive factor pointing to the reason for this.

What is certain is that intermediaries are growing and thriving - and not all are achieving this through acquisition. Regardless of size, customers will stick with the broker that offers them true added value. And I believe this is the critical factor that will generate the personal recommendations that account for around 70% of a broker's business and is at the core of their success. This applies to commercial as well as personal lines brokers that will find it hard to retain customers if they do not do this.

So how can brokers add value? Norwich Union research shows that brokers favour a personal approach, preferring to deal regularly with the same named contact within an insurance provider. The power of that contact to make decisions at branch level and to deliver rapid and efficient fulfilment is also key. From a customer's point of view, they want to do business with somebody who, quite simply, is easy to do business with. By offering products that have been carefully crafted to fit a customer's individual needs, rather than leaving it to the customer to select the insurance components they want, an insurer can make the purchase decision straightforward - and make both the brokers' and their customers' lives easier.

Contrary to popular opinion, I believe that the wave of developments facing our industry are creating closer relationships between insurers and intermediaries. Through natural consolidation in the broker market place, insurers find themselves dealing with a smaller number of larger brokerages, which, ultimately, will make closer working partnerships a more realistic possibility.