The life of a broker is rarely dull, though a soft market is perhaps the dullest it gets. While a business insurance landscape with increased competition gives them a real way to promote their services, there can also be downsides.
Lloyd's general representative for Australia, Chris Mackinnon, recently told Insurance and Risk Professionals that the soft market could be hampering a broker's professional development.
What's more, as Mr Mackinnon put it, "many brokers have never had to trade in a hard market," with this particularly long market cycle being all a lot of young brokers know. All that could be about to change.
T
Is the end of the soft insurance market nigh?
Any broker reading this will likely have their own view on this current market cycle. And yet, the majority think the soft market is about to harden.
In a survey from the Insurance Brokers Association of New Zealand (IBANZ), 46% of brokers from both sides of the ditch think the Australian market is almost reaching its bottom, but isn't quite there. Meanwhile, 27% believe the market is as soft as it's getting.
So, what's next for brokers? As Lloyd's Mr Mackinnon advises: "The best thing a broker can do is be prepared." Here are a couple of ways to do that in anticipation of a hardening insurance market.
46% of brokers from both sides of the ditch think the Australian market is almost reaching its bottom.
1) Prioritise cash flow
Your clients' premiums may be about to rise as the insurance market hardens. The impact of that is likely to be severe, as small businesses in particular struggle to balance their books.
By offering them a premium funding option today, you are helping small businesses to prepare for tomorrow. The client will pay for their business insurance in instalments rather than a lump sum. This is a better scenario for easing their cash flow, and means that any premium rises will be smoothed out over a longer period of time.
2) Get to know your clients
Speaking to the IBANZ, Solution Underwriting's director, Anita Lane, said brokers can use their time to get to know their clients more intimately – in particular, where their biggest pain points are.
"Understand your client's business inside and out," she began. "Educate them about the risk surrounding their business and offer viable solutions to their needs."
This seems to be a consensus, and one that Lloyd's Chris Mackinnon agrees with.
"Once you can see how a production process works, or the consequences of machinery breakdown, you're in a much better position to advise the client," he added.
Are you looking for solutions? Contact Attvest and use our near-century of industry experience to set them up with effective insurance finance.
