What sets you apart as an insurance broker? Perhaps it is the strong relationships you have formed with your clients, or maybe it is your ability to add value to the services you supply? It could be any number or combination of factors from your adaptability, persistence, people skills or negotiation skills. Underpinning each of these qualities, however, is the foundation of product expertise.
While reports of the demise of insurance broking have been somewhat exaggerated, it would be negligent to deny that the direct channel and aggregator players have substantially disrupted the market. McKinsey analysis reveals that between 2009 and 2019, the direct channel has almost doubled in size while aggregators have increased their market share from 20% to around 40%. If insurance broking is going to retain, let alone grow, its place in the insurance ecosystem, then it must clarify its value proposition to customers and insurer partners.
The last 12 months have proven that there is no point in being the most well-meaning or personable broker in the world if you don’t have the knowledge or capabilities needed to provide insight and support to your clients. Now, in the face of a looming economic crisis, brokers will have to fight for every new client and business opportunity, and the key lies in being able to offer solid, substantiated advice. But what is the best way to develop this expertise?
The comments on any LinkedIn post on the value of official insurance qualifications reveal there are two very distinct camps – those who believe these are a “must have” and those who believe these are a “nice to have”.
Aficionados of professional qualifications emphasise how suitable diplomas and accreditations are a mark of the quality that their business is striving to maintain, and an external stamp of approval on the proficiency of their people. By enforcing professional qualifications as mandatory, new talent is encouraged to further their professional development and to build their product knowledge and expertise. In addition, younger team members are supported by a professional environment in which they are surrounded by peers who have undertaken the same challenge.
Specific qualifications can add structure to a career by giving an insurance professional the ability to develop a breadth of knowledge while also drilling down into the specifics of a specialism. Also not to be ignored is the talent retention implications of investing in your staff and encouraging them to invest in themselves. Young people, in particular, are looking for careers that offer continuous development opportunities and a defined career path, and professional qualifications offer a clear trajectory for progression.
Offering an alternative perspective, many in the industry believe that experience is not just the best teacher but often the only one really required. While the above reasoning is not lost on them, they offer the contention that the real skills required by insurance brokers don’t come from a book nor can they be reliably tested by an examination. It is by being on the job that people learn about the nuances of what customers expect and develop the expertise needed to offer the right advice at the right time.
Professional qualifications can also run the risk of limiting access to the insurance profession as the barrier to entry may seem too high for those who have no qualifications to their name, or too time-consuming for those who have just completed degrees. Structured learning and examinations simply are not the way that a lot of people would choose to learn. They would instead prefer the flexibility of being able to develop skills and expertise on the job, and under the mentorship of a seasoned professional.
From my perspective, a fundamental part of what makes an insurance career interesting and rewarding is the variety of experiences that its people bring to the table. Making insurance qualifications mandatory across the sector could impede the growth journey that some individuals take and might needlessly narrow the pool of talent available.
For some businesses, it will be suitable to make such qualifications mandatory and, as long every brokerage is free to make that call, this is a solid personal choice. However, while I can attest to the value of education and professional qualifications, I would argue that education works at its best when it is embarked on voluntarily.
Insurance brokerages should instead focus on giving their people the opportunity to take on such accreditation opportunities and provide the support required for staff to succeed if they choose to proceed. To throw your weight behind such employees is to have the best of both worlds - professional people trained to give expert advice who feel empowered by the flexibility offered by their employer.
