Market consolidation, digitalisation and professional standing are among the leading concerns facing the next generation of broking, with adaptation key to weathering the industry’s future, according to this year’s best young brokers.
Suncorp’s latest Insurance Insights white paper, outlining the concerns and opportunities facing brokers, includes input from 2015 Warren Tickle Memorial Award winner Luke Chrzanowski, and finalists Luke Pratt, Bronte Neville, Alex Conlon and Amanda Blackburn.
Suncorp National Manager International Intermediaries Sam Sanfilippo says that the industry is facing major changes.
“Insurance broking is undergoing some fundamental changes at the moment and will look very different in 10 years’ time,” Sanfilippo says.
“Intense market competition, the rapid technological developments and changing customer preferences are all having an enormous impact.”
“The next generation of brokers will be responsible for the future direction of the industry, so it’s vital that we support and encourage them. This white paper aims to help provide this encouragement,” Sanfilippo adds.
Chrzanowski predicts that the trend in mergers and acquisitions will continue well into the future, as companies seek profit-boosting strategies amid difficult market conditions.
“We are in an age where we’re always striving to achieve a little bit extra. We’ll see more mergers and acquisitions take place, purely to try and build profits and top-line performance,” Chrzanowski says.
Pratt adds to this position, saying that competition among companies is only going to intensify as the trend continues.
“You only have to look at the recent activity among all the big international players across broking, underwriting and reinsurance, such as ACE and Chubb, and XL Group and Catlin,” Pratt says.
“Willis just recently merged with Towers Watson in the US. Everyone is trying to keep up with one another, so I can only see more consolidation.”
Conlon says that while digital technology is having a substantial effect on the way brokers do business, automation will ultimately benefit brokers in the long run.
“Technology will be excellent for the industry. It will cause a lot of changes and some people will be hit harder than others. But it will lead to a lot of long-term benefits once it’s all settled,” Colon says.
“Much of the technology we’re using is still very clunky. A lot of people are using iPads these days, but a lot of the applications are very limited in their capacity to actually assist brokers to do their jobs. The transition to digital technology hasn’t exactly been smooth.”
Neville agrees that technology will inevitably make broking easier, but that brokers still need to ensure they add value to clients.
“Technology is making things a lot easier, faster and more efficient. We have platforms to obtain multiple quotes from different insurers,” Neville says.
“However, we have to ensure these platforms do not detract from our ability to negotiate and communicate with insurers. “As we develop new digital platforms, we have to ensure there is more focus on communication and negotiation, because it’s such a critical part of what we do.”
Blackburn says that more will need to be done to ensure that broking attracts and retains quality talent, and that this will come down to how well the industry promotes itself.
“We’re not recognised as a profession in the same manner as lawyers or architects,” Blackburn says.
“Yet we’re providing professional advice to our clients to help them understand their risk exposures.
“From a very young age, you are told you can be an accountant, you can be a lawyer, you can be a builder. You’re never told you can be an insurance broker.
“There’s still a huge misconception about brokers being a door-to-door salesmen. I don’t think we’ve done enough to promote ourselves in universities, TAFEs and high schools.”