Day five of the 2020 NIBA Virtual Convention started with a session on the new report into the economic value of insurance brokers that NIBA commissioned Deloitte Access Economics to prepare.
NIBA CEO, Dallas Booth spoke to Deloitte Partner, John O’Mahony about the study which represents the most comprehensive analysis of the insurance broking industry ever undertaken in Australia.
The report reveals that the value brokers provide to clients and insurers, as well as the industry’s impact on the economy and broader society.
The report is founded on a robust evidence base about the role of the insurance broking sector. O’Mahony revealed that Deloitte Access Economics analysed information provided by 421 individual brokers, 78 brokerage businesses, and the six largest insurance broking businesses.
“We consulted senior staff at three insurance companies, two small business clients and representatives from the LMIGroup, to help understand the stories behind the statistics. All up, we consulted almost 100 different articles, reports and data sources about the sector.”
The report found that brokers provide immense value to their clients at every stage of the insurance cycle. The report estimates that it would take clients on average, eleven hours to complete a risk assessment of their business, compare insurer offerings and apply for cover.
Based on a conservative estimate, this equates to $300 per annum in lost time or a combined $230 million across all business clients. Brokers also support clients in accessing a greater range of policies and insurers- in 2019, the average NIBA broker placed policies with more than 10 different insurance providers.
The report was also able to quantify the role of brokers in reducing the incidence of underinsurance and noninsurance, with 40 per cent of clients not having appropriate insurance prior to engaging a broker. This increase in cover was not always accompanied by an increase in premiums.
O’Mahony said, “The client journey when using a broker is not as simple or transactional as walking into a store and buying a product, it is a relationship-based business that creates many sources of value.”
He urged brokers to read and share the report widely, “It is most important is that the report is widely read and does its job of informing the conversation about the role of insurance brokers in the economy.”
You can access the entire report on the NIBA website.