How brokers can drive customers satisfaction and loyalty

In the face of expected increases in insurance premiums due to a potential interest-rate rise, one expert has stressed that now more than ever, it is important for brokers to deliver increased value.

“The role of a modern insurance broker has to go much further than simply broking an insurance placement,” said Nigel Thomas, divisional chief executive, Austbrokers Network, AUB Group. “Brokers need to be trusted advisors, providing impeccable customer service and understanding their client’s business inside and out. This includes foreseeing any risks, whether they’re physical, financial, or people risks.”

Thomas said service is a key to retaining customers and rising above competitors.

“Service is a major contributor to customer satisfaction and loyalty,” he said. “People tend to share information about bad experiences, so this could affect future engagement as well. For many organisations, service is a key factor that distinguishes them from the competition.”

The broking boss said brokers need to be people-oriented, knowledgeable, and efficient. These qualities could help them save clients from expending much energy thinking about insurance and focus instead on their core business. In addition to services related to insurance buying and negotiating, he said brokers should also offer all-round risk-assessment capabilities. This arrangement will allow them to offer more to their existing client base.

“Technology, data, and analytics keep changing the insurance landscape, and customers have increasingly complex demands and needs,” Thomas said. “This means that brokers need to maintain high levels of formal training, and stay abreast of the latest industry trends.”

Thomas also said that to overcome the natural apathy customers have toward insurance, drive long-term loyalty, and offer them comprehensive and strategic service, brokers should leverage technology and develop a holistic knowledge of global emerging risks, including cyber.

AUB Group announces profit increase

AUB Group has announced a 7.5% increase in adjusted net profit after tax to $40.4m as all operating areas of the business are seeing growth. Reported net profit after tax for the firm dipped to $33m, from $42m, due to non-recurring profits on sale of investments earned in FY16, reduced fair value adjustments and contingent consideration adjustments related to mergers and acquisitions.

The Australian broking side of the business saw profits increase by 3.6%, up to $49.2m, compared with $47.9m last year.

“Despite a flat market, organic growth was the key driver of business performance, which further highlights our strategic execution – importantly growth was not a result of premium increases,” Mark Searles AUB Group CEO and managing director said.

The firm also saw a 4.6% growth in the Hunter Premium Funding loan book as well as the launch of Austrbrokers Life Solutions.

The underwriting agencies business saw profits boosted by 21%, driven by increased policy count which rose 12.7%. The firm noted that the market for underwriting agencies has been largely flat as premium reductions in the first half of the year were recouped in the second half. The business also noted that, following a global review of potential providers, they have begun to implement a new underwriting system which will roll out over the next three years.

The risk services arm of the business saw a 5% increase in profit contribution for the group, to $7.5m as double digit revenue growth continued throughout FY17.

The New Zealand business saw a $2.6m increase in profit contribution up to $5.5m, compared with $2.9m last year. In New Zealand, the business saw strong organic growth from new clients as life and premium funding income was also boosted. NZbrokers saw four new members join the network over the year with GWP rates hitting $550m.

Looking ahead, AUB Group expects adjusted net profit after tax in 2018 in the range of 5-10% growth, in the context of low single digit premium rate increases.

Why the right partner can help safeguard against risk

Risk is a main cause of uncertainty for organisations, so leaders need to manage risk when creating a business roadmap. Business leaders need to consider a comprehensive risk management strategy, otherwise the company cannot clearly define its future plans, and manage the business for growth.

Why you need an effective risk management strategy
Business risks can come from multiple sources, both internally and externally. And, while some risks can be predicted and mitigated in advance, there is always a chance that something will be missed, or an unpredictable event will cause trouble for the business.

Internal risk can come from events such as key personnel leaving, injured workers, failure to meet regulatory compliance requirements, a major accident that shuts down operations, or the theft of sensitive corporate data.

External risk factors include the withdrawal or cancellation of a major contract, adverse fluctuation in the currency markets, or new competitors. Any of these risks can seriously derail a business from its intended track.

Business leaders therefore have to ensure they manage risk as a primary consideration when creating their business roadmap. A business plan that doesn’t include the implementation and management of risk is unlikely to deliver strong growth for the company.

Managing risk effectively depends on a number of factors, including a strong understanding of the business itself, the industry it operates in, the likely risks, and the options for mitigation.

Find a strong risk management and protection partner
For the best approach, businesses should consider partnering with an organisation that will safeguard the business, from the physical building to the finances and the people. Only with the right safeguards in place can a business be confident that it has the security, infrastructure, and support needed to focus on growth and development.

A strong risk management and protection partner, often referred to as an insurance broker, can help a business identify and safeguard against potential risks, some of which the business may be completely unaware of.

Organisations that know what risks they may face can develop strategies to deal with them, significantly reducing any potential negative impact so that they can focus on their core business, and work on growing the business into the future.