A lot has been said about how the minnows can no longer compete with the big fish in the insurance broking business. But, the reports of the death of the small broker are greatly exaggerated, in my opinion.
The insurance industry can struggle with innovation, but, in the past couple of years, some of the best new product ideas I’ve seen have been brought to us by smaller independent brokers. They have been very adept at identifying gaps in the market and devising new products that target niche audiences.
We love working with brokers who provide something that we’re passionate about – great service. I often see our smaller brokers doing this by coming up with new, innovative ways to meet their clients’ needs.
They seem to find it easier to stay close to their customers than their bigger rivals. They know many of them personally, often as friends, and so get a real understanding of their problems. Also, many of them are specialists in their particular fields and so bring an expertise that their clients – and we – really value.
Smaller brokers also tend to be pretty entrepreneurial, in a business that isn’t known for seizing the initiative. They have a big incentive to find new income and a niche that might be passed over by their bigger counterparts, because it is considered to be small fry, could provide a meaningful source of new revenue for a local broking firm.
Our strategy of encouraging brokers to bring us new product ideas has proven to be a winner for us in the past two or three years. Small brokers pitch us their ideas, and we grill them to find out whether they have real legs commercially. If we like what we hear then we’re ready to put our money where our mouth is and back them. We help the broker to develop the product (using our pricing, wording and compliance expertise) as well as lending them our marketing nous to help them sell it. Small brokers also like to use our brand, because it’s widely known and trusted for offering good claims service.
So if anyone were to ask me about whether there’s a future for small brokers in our business, I’d tell them yes. In fact, their innovation, entrepreneurialism and customer focus really help our industry to find new customers and remain relevant in fast-changing times