It looks like the hard insurance market is proving to be a test of who’s working the hardest for their customers. Insurance Business recently caught up with DLB Insurance & Risk Solutions managing director Dean Bowen (pictured), who believes going that extra mile for clients at this time will be well worth it for brokers.
“Premium increases are the new norm; you’re having to do a lot more work to retain your existing accounts; you’re having to do a lot more remarketing; and you’re having to try and sell increases of anywhere between 10% and 20% to a lot of clients when they haven’t had a claim and their revenue may have gone backwards slightly or stayed the same,” said Bowen, painting a picture of the current state of affairs.
For the brokerage founder, the hard market is one of three major challenges to persist in 2021, the other two being COVID-19’s long-term ramifications for businesses and the challenge surrounding the Hayne Royal Commission and the reforms to general insurance. In terms of the latter, he commended the “excellent job” being done by the National Insurance Brokers Association in advocating on brokers’ behalf.
As for the hard insurance market, Bowen went on to state: “I think it still is going to be a challenging year, but it’s just going to mean everyone’s going to have to work harder for their clients and put more work into their renewals. If you’re a good broker, you’re hungry, and you’re willing to go the extra mile for your clients, there’s going to be a lot of opportunity out there.”
In his view, brokers, more than ever, need to demonstrate their worth to their clients.
“If you’re just trying to roll a client’s renewal over and expecting them to accept a 10% or 15% increase, you might find that they begin looking elsewhere and it’s not necessarily because they want to save money – it’s because they want to see greater value,” said Bowen. “It’s important to understand what motivates your client.
“Many times we have had new clients approach us looking to better understand their programmes; often they have walked away having purchased additional covers they weren’t aware existed previously or had only heard little about – examples of which are management liability and cyber. If you explain it to them, they might see value in it and how it could help better protect their business, meaning they give strong consideration to purchasing it.”
The MD believes there’s going to be a lot of opportunity for brokers who are prepared to put in the hard yards and do the work, because business owners are going to be naturally looking.
He stressed: “Your job as a broker is not to simply sell your client as many policies as you can – it’s to help better educate them about risk and present options to them to transfer those risks to an insurance policy. At the end of the day, the client will make the decision on where they see value in insurance and, therefore, which policies they choose to purchase.”
Meanwhile, Bowen has three key pieces of advice for anyone thinking of setting up their own brokerage, having done the same in 2017 without prior broking experience. For the CGU Insurance alumnus, the first would be to not look at the short term.
“It can be very daunting to go from a well-paying job to not having a stable income and starting something from scratch,” he acknowledged, “but if you have the right plans in place and you’re prepared to work hard, after 12 to 18 months or so you can start to have consistent new business and renewals coming in.
“Yes, you might take a hit on your income for the first year or two years, but you need to try and look at it long-term in, say, years three to five you would have surpassed the income that you were earning at an insurance company or at a brokerage and you’ve been building an asset all the while.”
The idea, said Bowen, is to get comfortable being uncomfortable and to try and think about the long-term goal in the sense of building a business and a well-established client base, building a brand, and building your reputation. “The long-term growth and success, that’s what you want to try and focus on,” he asserted.
Secondly, the Community Broker Network (CBN) authorised representative (AR) highlighted the importance of knowing where you need help.
“Know what your strengths are and know what your weaknesses are,” advised Bowen. “In my case, I obviously had a plan and I had a fairly good idea about how to run a business and how to start to build connections, but I did not have prior broking experience.
“So I aligned myself with really good mentors who could help me from a technical perspective. So if I needed to talk to someone about the ins and outs or interpretations of a policy wording, or needed market advice, I aligned myself with the right mentors that I could go to and seek advice where I needed it.”
CBN, for instance, has been very supportive and does a lot when it comes to educating its ARs – holding conferences, professional development days, and webinars, as well as putting them in touch with specialists or experts in certain areas to assist with particular queries.
Lastly, the DLB boss told Insurance Business: “Probably the third piece of advice is always have a plan. Think about how you’re going to make your phone ring. Do you have an accountant or someone that you can partner up with who can refer you leads, or is there a networking group like BNI that you can join? Are you going to advertise and get your leads that way?
“You need to have a pretty strong plan in terms of where you’re going to generate your leads from and how you’re going to build the business. So make sure you’ve got a very specific strategy of how you’re going to do it. Stick to the plan, but obviously don’t be afraid to make changes as you need to along the way.”
