Broker network CEO opens up on firm’s future

Mark Searles

After a strong half-yearly profit result, Austbrokers continues to have its eyes set on acquisitions but its appetite has grown beyond its usual fare.

Last week, the firm announced a half-yearly net profit of $13 million, with CEO and Managing Director Mark Searles terming the last six months as one of consolidation and integration.

Austbrokers has been highly active in acquisitions recently but late last month widened is scope with the purchase of the Procare Group, a workers compensations specialist.

Broker Buzz spoke with Searles about the firm’s underpinning strategies and what the year ahead holds.

James Chalmers: Austbrokers has brought the majority of its brokers onto the one data centre. How is this delivering benefits to the brokers?

Mark Searles: Effectively most of the backroom stuff is cloud-based now, so rather than each broker having a server in the back room – for which they had to pay for and the rest of it – we host all the brokers’ data.

The benefits of that are numerous. Under the new Privacy Act, everyone really has to work out how they hold data and how they use it. In our data centres, we’re already conforming to Privacy Act considerations.

Similarly, let’s say a broker’s server goes pop. Well, that’s it. All their data was on the server.  If our server goes down or there is some issue here, we’re back up within an hour. It’s real world-class, industrial-strength service. We host everyone’s data, covered by the group Cyber Liability Policy. Even if there was a crisis then we’ve got a really, really comprehensible cyber liability policy in place for everybody.

JC: In terms of the actual data you collect, is it being mined for analytics?

MS: In the longer-term that is exactly where we wish to be. That is the whole concept of big data with regards to networking with our broking partners – how do we start then utilising the data that is coming out of the broking systems, how do we start helping them.

We don’t want to be the Big Brother at the centre. We want to be a core service provider where we can leverage information and having it on one system makes a big advantage.

We’re already leveraging it. One of the offerings we have is the Business Intelligence Tool. Effectively every broker that is on the data has access to this, so they can go into it and play “what-if” analysis on their data. We are already providing this capability today and we continue to improve it and that is a lot of the investment we have put in over the last year or so.

JC: You’ve recently diversified with the purchase of Procare. What other areas do you see as complimentary to what you’re doing here?

MS: 92% of our business is commercial lines. If I’m sitting there as a business, I have two core, trusted advisors.

There is the accountant, who is basically looking historically to making sure I am okay. Then I have my risk advisor, i.e. my broker, who is looking forward to making sure I am properly covered.

I know it’s fairly simplistic but if you take that fact and say ‘Actually, what are the other things that have that trusted advisor status, that I can be leveraging?” Now we have someone in the group who help with all of the issues in the workers comp space and getting staff back to work.

If you’re looking at all the risks in 360 degrees, your thinking changes. You start thinking: ‘How do I leverage and how do I unlock that potential and engage with the client more?’

But you have to start with the client because the client is going to have to want to do it as well.

JC: You’ve also indicated an interest in starting up business as well.

MS: Absolutely, if there are opportunities that are complementary to our core business. Our core business is to serve, via the broker, the end clients and their risk management needs.

If there are things in there that come up that would makes sense and it would be profitable, then clearly we would consider it.

JC: What do you see as some of the big opportunities for not just the Austbrokers, but the Austbrokers partners this year?

MS: Again, a lot of it is around ensuring we meet customer need.

We’ve got a fantastic network out there of partner businesses. If we look at our client retention rates in the mid-90%, we know they’re serving them very well.

The opportunity is then whether we have leveraged the relationship to basically become even more relevant.

JC: Where do you see the challenges coming from in the next year?

MS: Historically people have relied on premium rate rises but we can’t rely on that in this marketplace, so it comes back to how we can cross-sell. The questions are how do we leverage the client relationships more effectively? How do we support the clients more effectively? You can’t rely on the rising tide of premium because it is just not there.