It is a prevailing characteristic of successful insurance brokers that they have their ear to the ground when it comes to discerning new prospects for developing their offering and better supporting their clientele. And while current news regarding the UK economy has yet to take on the dire timbre predicted by financial market analysts in the latter days of 2022, inflationary concerns and harder market conditions are necessitating brokers to dig ever deeper to find such opportunities.
From conversations across the marketplace, brokers are taking a considerate approach to evolving the proposition that underpins their businesses. For some, this is taking shape in the form of broadening their product suite by delving into new product lines and engaging with a wider variety of insurer partners. For others, the focus is on bolstering their customer base whether through increased marketing or a renewed focus on encouraging referrals.
Cross-selling has also come under the spotlight in recent months as insurance businesses look to leverage the full force of their data, systems, internal talent and services. Meanwhile, the twin terms of vertical integration and horizontal integration, while not quite returning to the peak of popularity they hit in the early 2010s, are very much back in vogue.
Amid these new and renewed strategic drives, more consideration is also being paid to the opportunities presented by insurance schemes. These insurance solutions targeting specific customer needs that aren’t being adequately met by the wider insurance market are enabling the savvy broker to meet market challenges with bespoke solutions.
The UK schemes market is estimated to be worth between £5 billion and £6 billion GWP and it currently represents a significant part of the commercial lines marketplace in the UK. It’s a market that is growing and evolving all the time – and primed to welcome and support entrepreneurial brokers looking to find new business opportunities.
In a recent interview with Insurance Business UK, Simon Medhurst, schemes development manager for Travelers Europe, noted that the schemes sector had seen a post-pandemic surge, brought on by the changes in customer behaviour that occurred during COVID.
“[This] has allowed more time for reflection from brokers and MGAs, and indeed insurers,” he said. “If you look at consumer behaviours as well, you can see that they’ve changed with regard to internet shopping, increased pet ownership and homeworking, etc.”
These changes have created new and different opportunities, he said – which are coming to the fore at the same time as brokers are reflecting on their volume businesses and looking to where there’s any shared affinity.
The benefits of such schemes are substantial. Done right, they allow brokers to expand their offering, improve their customer retention, target untapped consumer markets and develop their own reputation for quality and specialist advice. As to what an insurance scheme done right looks like, a number of crucial characteristics spring to mind, not least that a successful schemes proposition encompasses:
The appetite for differentiation is especially strong at the moment and those who have successfully undertaken a schemes solution can speak to the value it has brought their businesses, partners and clients alike. A common theme among these spokespeople is the importance of getting involved with the right schemes set up. As with any opportunity for differentiation, having the right frame of mind going in is half the battle – and connecting with the right partners makes all the difference.
For brokers considering dipping into the schemes market, doing comprehensive research, really exploring all their options and working with respected partners with good financial strength and a strong track record of success should be top of their to-do list. With the right mindset, ethos, strategy, vision and partnerships established, brokers will be well-placed to take full advantage of the opportunity at hand to reshape the insurance market around them on the ever-solid foundation of quality advice – at a time when price threatens to become king.
What are your thoughts on this story? Please feel free to share your comments below.
