The combined impacts of inflation and a hard insurance market can make things tough for brokers. Premium rises of up to 20% – particularly in the property and motor sectors – are not unusual and according to some experts, are unlikely to slow down much anytime soon.
Last year’s record round of flooding and the prospect of bushfires in the coming months all add to the pressures on the insurance market and the affordability and availability of coverages.
Veteran broker Don McLardy (pictured above), CEO of McLardy McShane Insurance Brokers, has experienced similar pressures before. During an interview with Insurance Business TV about his Medal of the Order of Australia award for charity work and services to Australian rules football, McLardy, also shared his views on current insurance challenges.
IBTV asked the CEO if he sees rising premiums as his biggest current insurance industry challenge?
“When you’ve been around as long as I have now these markets fluctuations come and go,” he said. “The one thing that hasn’t changed - and we really keep talking about this to all of our JV (joint venture) partners and authorized rep network - is to say that it’s still a relationship-based business.”
McLardy said relationships are the key to brokers surviving through tough markets.
“As long as you’re knowledgeable about the insurance industry and you can talk to your clients about what’s happening in the market and explain why it’s happening, the relationships will hold you through those ups and downs and difficult discussions,” he said.
A broker’s professionalism, which includes informing clients about market conditions, he said, should help offset the impact of tough markets.
“It’s the old story, as we all know, if you’re running around selling on price, the client is going to come to you [on price] but they’re going to leave you on that,” said McLardy. “So we’ve always believed in building relationships and strong relationships that will stand the test of time and will outlast market conditions so we’ll be able to do to carry through those fluctuations.”
IBTV asked the brokerage CEO if the current difficulties in the insurance market are cyclical market conditions? Or is he concerned that natural catastrophes are making this a different situation and will the industry be able to overcome that?
“I think it will be manageable in the end but I was just reading this morning about those fires in Lahaina - which I’ve been to - in Hawaii and Maui,” he said. “They’re just terrible and it’s hard to imagine that that town right on the ocean there could be burned to the ground and boats in the harbor burned too.”
McLardy said it’s possible that some of the issues connected to current market conditions are new.
“There are clearly things happening that maybe we haven’t experienced before and we need to address that as it unfolds,” he said. “A lot of the market conditions are probably manageable over time but, yes, I think there is a bit of an element of the unknown for sure.”
In September, McLardy will be attending a ceremony at Government House in Melbourne where he will be invested with his Medal of the Order of Australia.
The broker boss served as chairman and director of the Reach Foundation (Reach) from 2011 to 2013. Reach puts on youth led workshops every year, working with about 100 primary and secondary schools every year across Australia, to inspire 10- to 18-year-olds.
McLardy is also a former governor of the youth empowerment focused Jim Stynes Foundation. According to its website, the Foundation’s aim is “to empower youth through leadership, resilience, and mental health support, fostering a generation that thrives in the face of adversity.”
He also supports and fundraises for FightMND, a campaign led by AFL legend Neale Daniher that aims to find effective treatments and a cure for Motor Neurone Disease.
The IBTV interview with McLardy will be published in the coming days.
Are you an insurance broker? What’s your biggest current insurance challenge? How are you dealing with it? Please tell us below.
