Insurance professionals often say the industry is relationship-based. This particularly applies to brokers. The insurance and risk solutions a broker provides for customers often depend on knowledge that can only come from a personal, face-to-face relationship.
Specie insurance is probably a very good example. This niche coverage protects valuables and collectibles like artworks, jewellery, gold bullion, wine and antique furniture.
It’s an offering that is very dependent on personal links and connections to customers.
“It's traditional, old-fashioned insurance, where it's word of mouth as much as anything,” said Tan Tan (pictured above), senior account executive with Consolidated Insurance Agencies (CIA).
Tan is a Melbourne-based broker who focuses on specie insurance, including paintings in private galleries and jewellery.
She said most of her clients come to her via word of mouth. The gallery clients often know each other and, she said, referral business is the source of many of her customers.
“For this industry you don’t go out mass marketing,” said Tan. “I don’t think it works that way.”
She said offering a generic product also doesn’t work because each client requires a personalised offering.
“Species is interesting in a sense that you deal with a lot of different galleries and obviously the artists, they all have their own personalities,” said Tan. “It can be about building a relationship and earning their trust.”
The specie broker said sometimes the gallery owners can get a little defensive when she asks them the questions she needs to ask to get the best insurance coverage and rate.
“Then you have to calm them down and explain that the more information they give to the insurer the more likely it is that they will get a more favourable rate,” said Tan.
This information, she said, also helps prove the credibility of the gallery owner and instils confidence in the insurer that the owner can operate a gallery effectively.
“What the insurers don't like is when you give them one sentence asking them to insure $20 million worth of fine art,” said Tan.
Andrew Brett, director of Infosure Insurance, a dedicated cyber insurance brokerage, puts the client-insurer information challenge this way.
“I cannot control the insurance market but I can control the level of communication and detail I provide,” he said in a LinkedIn post last year. “My clients may not like the result every time but they will always understand how and why it was brought about. That is my professional purpose.”
For brokers this information mission is about risk management but also ensuring that when a claim happens, the client can get the benefits they should be entitled to.
Many brokers also say claim time is where they really show their value.
Ware is director of Melbourne-headquartered BJS Insurance Brokers.
He gave the example of a storm damage claim to a holiday rental.
“The assessor and insurer had three attempts at calculating the loss of rent, which is quite different to a permanent rental loss of rent calculation, all of which were incorrect,” said Ware. “In the end we did the calculation for the insurer, they approved it and the client was very happy with the result.”
On a more basic financial level, many stakeholders say brokers play an important role interpreting policies for their customers. In an IB interview, Daniel Berry, partner at Dudgeon Berry Insurance Group in Lismore, said this is a very important function.
“Being able to identify what entitlements are available to a client at claim time has shown that we can often provide better outcomes for clients,” he said.
Tan agreed.
“That's what the role of the broker is, because nobody has time to read through policy wordings and know what's covered and what's not covered, but the broker knows,” said Tan.
“It’s about managing the client's expectations and managing the insurer's expectations, and we're trying to present the best of both and match them up – like a matchmaker,” said Tan.
How important are personal client relationships in your role as a broker? Please tell us below.
