Insurance claims delays, the present economic conditions, senior-level staffing woes, and affordability issues are some of the common answers from brokers when asked about the current challenges facing the sector. For Whangarei-based commercial insurance broker and Insured North Limited director Brad Johnston (pictured), however, there is an underlying issue that could prove disastrous.
Speaking with Insurance Business, the new Insurance Advisernet New Zealand principal said: “We’re in for another round of rate increases, and I think clients that don’t have a great relationship with their broker are cutting back on covers to save money. That’s probably going to be a fairly major underlying issue for the industry.”
In Johnston’s case, he has not had conversations in which clients opted to be underinsured. He attributed this to a lot of front-footing.
“I start my renewal process maybe two months out, and my renewal process is always an in-person visit with clients,” he said. “I sit there explaining to them what’s going on in the industry, what’s driving price increases, and what that looks like for the future.”
Johnston has been in the industry for a decade, initially serving as a life insurance adviser before shifting to the commercial side more than six years ago. While his first job wasn’t in insurance (Johnston worked at a funeral home for 10 years), the Aon alumnus “grew up with insurance” as he was a young schoolboy when his mother joined the sector.
Prior to setting up his own broking practice with the help of Insurance Advisernet, Johnston was part of the team at Adams Trimmer Insurance Brokers.
Looking ahead, Johnston is keen to be a strongly connected ‘extension’ of more companies.
“What I enjoy and what keeps me going is meeting people, meeting clients, and forming a relationship with them – enough to appoint me as their broker,” he told Insurance Business. “There’s the thrill of actually winning the business in the first instance, which is a key driver. Then what I probably enjoy most about it is the ongoing relationship. That’s the overall driver for me really, is those relationships you form.
“I think you end up almost becoming a part of their business. You can talk about all sorts of things other than insurance. They might tell you about some staffing issues they’re having, or just general issues the business might be facing at a time, and they’re comfortable enough to talk to you about those things. I really enjoy that part – basically being an extended staff member or a trusted adviser.”
Despite the regulations that are now in place, Johnston believes there remain those who are not as conscientious when it comes to their role as an insurance broker that clients can trust.
He said: “As a whole, we do a great job – most businesses have a trusted broker – but there’s an awful lot that don’t. If you add an element of distrust there, it’s a recipe for disaster. The general consumer doesn’t have a great overview of insurance, and I don’t think there’s any regulation that could change that. An insurance policy can’t cover everything, so you’re only one claim not being paid away from a client losing all faith in insurance.
“It’s quite easy to come across clients that are disconnected from their brokers. If you can take a business that doesn’t have a great relationship with their broker and you can form one, I think that’s an overall positive thing for the industry because clients are much happier, they understand what they’re getting, and they can have honest conversations.”
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