“DO YOU WANT TO BUILD A COMPANY OR JUST MAKE MONEY?” STEVE JOBS | APPLE
As we launch our 2022 Leading Brokers report, I’ve been thinking about what makes Brokers successful. Over the past fifteen years or so, Commercial Brokers have been more profitable than Commercial Insurers, and now arguably hold more power in the market than ever. So how has this come about, and can it continue?
Innovate to grow
About five years ago Gracechurch ran a survey, which showed that Risk Managers trusted Brokers more than they trusted their Insurers: an indication even back then that Brokers realised the value of listening to their customers.
Recently David Howden, speaking at FERMA, highlighted the very average growth of the insurance industry over the last 30 years and spoke passionately about how growth would only be possible if more Brokers and carriers have more conversations with customers, enabling them to innovate to meet clients’ evolving needs.
David is not alone: McKinsey reported on the insurance industry’s lacklustre performance recently, and we at Gracechurch have seen the evidence of how the boldest, most innovative, Insurers are the ones who thrive and outperform.
Today the leading Broking houses are working hard to persuade the industry to embrace a more dynamic mindset and to compete on winning the customers’ hearts-and-minds: our Report also shows how diverse and competitive the broking market is these days, which is a healthy sign!
But inertia is created if too much of the carrier side in the industry remains conservative and focused on the short-term – recently, for example, we’ve seen a spate of big name carriers pulling out of mainstream classes of business, a trend that appears to fly in the face of serving customer needs in an incredibly challenging risk environment.
Collaborate to thrive
I believe that a positive future depends on fantastic collaboration between capital providers and Brokers to ensure they jointly focus on growing the market and stop fighting over a shrinking pie. And what does this mean in practice? For me, innovation comes from great people with ideas working together in trusted relationships.
For the sector it’s about ambition, long-term vision and collective purpose: all insurance businesses need to be building trusted brands and their Brokers and Underwriters should be working together to develop and grow the new markets that we can’t even imagine today.
2022 Leading Brokers report shows that brilliant collaboration is happening, with the best Broking leaders defined by customer focus and deep knowledge, surely a recipe for progress and innovation.
We just need shedloads more of it going forward.
Written by Ben Bolton, co-founder of Insurindex, the ranking platform for the London insurance market, and founder and managing director of Gracechurch, the London research consultancy.