Compliance requirements for Australian insurance brokers are numerous, with a complex regulatory framework setting baseline standards for fiduciary duties, and most importantly, the need to act in the best interests of the client.
However, if these regulations comprise the minimum expectations for insurance brokers, what does broking best practice look like?
That’s a question posed by Richard Crawford, Chief Executive Officer of Community Broker Network (CBN).
Crawford believes that insurance broking best practice goes well beyond legal obligations. He says that while compliance regulations for Australian insurance brokers dictate what must be happening, best practice refers to what should be happening.
What is insurance broking best practice?
From a CBN perspective, Crawford shares that “insurance broking best practice is about learning, progress, and continual improvement”.
“Best practice should reflect learnings across the insurance broking profession that lead to delivering the best outcomes for clients in any circumstances,” Crawford says.
What can impact Best Practice?
According to Wendy Foweraker, CBN Executive Manager Broking Operations, it’s no secret that the context in which we do business is dynamic, challenging and continually changing.”
“This leads to many factors that can impact the quality of advice and service that clients receive,” Foweraker says.
- The personal economic mindset and professional circumstances of the client — this can ultimately dictate their willingness and ability to engage in an effective dialogue with the broker.
- Workforce pressures — the availability of skilled employees, a positive workplace culture, and absenteeism can affect brokers’ capabilities to deliver best practice.
- Insurance market conditions —the insurance market relative to a clients’ risk profile can impact the availability of suitable solutions to achieve the best possible outcome for the client.
- Broker business systems — the state of a broker’s systems, such as its evolution and suitability for the job, can impact business process capability and efficiencies the client might benefit from.
- Broker tools and resources —broker business tools can enhance client experience, however the tools available can vary widely between brokerages.
- Professional knowledge and skills — the more up-to-date a broker skills and knowledge, the better.
- Broker personal circumstances — your own health and wellbeing can fluctuate daily, and naturally this can affect client experience.
How can you balance these factors to deliver best practice?
After eight years at CBN, Foweraker reflects that at its heart, best practice is about delivering an outstanding customer experience.
“Best Practice is about ensuring that clients’ best interests remain paramount,” she says.
“While in some respects we need to play the hand of cards we are dealt, there is so much insurance brokers can do to optimise the outcome for clients, even in the face of such factors.”
Some suggestions include:
- Maximising your business systems to full effect.
“Establish consistency in how systems are used across your team,” Foweraker suggests. “Who does it best? Is there an opportunity to create more streamlined processes for everyone?
“For ARs, how are you leveraging your broker network? Connect with other organisations to see what you can learn, checking comparative productivity and practice. There is so much latent capability in business systems, and you could achieve much more without spending a single extra dollar.
- Using the right tools in the customer engagement processes
“Ultimately, our purpose is to ensure customers are in the best possible position after a loss or incident,” says Foweraker. “Tools can give legitimacy to the advice you provide clients while adding professionalism and value to the customer experience.
“Most of us have access to a range of valuable tools to advise clients, but how many do you use? Take an inventory to see where you land.”
- Having a good knowledge of available markets (are you sticking to a few trusted brands?)
“The insurance market is constantly evolving to respond to new opportunities and challenges,” Foweraker observes.
“We owe it to ourselves and our clients to familiarise ourselves with insurers making ground with other brokers. There are an extensive range of sources to guide you on the insurers and underwriters most in tune with your clients’ requirements.”
- Knowing which clients you shouldn’t be working with
“Client needs won’t always align with your broking abilities, or perhaps their business practices cause you to lose sleep at night,” Foweraker says, “That will increase risks and make the return questionable. Be selective of who you take on, and if a client raises red flags, consider moving on.”
Making sure the amount of time and effort you spend reviewing client needs and providing recommendations isn’t governed by how busy you are, or how busy the client is.
“It should always be about what is required to complete a professional process,” warns Foweraker. “How you show up each day for your clients, your mindset and that of your staff will either ensure you do the best with what you have, or something less.”
- Moving towards broking excellence
If you are looking to embrace the path to broking best practice, Foweraker has some suggestions on where to start:
Rate yourself — create a scorecard and rate your broking practices against a score out of ten. This can be used as a future benchmark from which to make improvements, ensuring a continual progression for an outstanding customer experience.
Make time for thinking — based on your review, consider solutions and structures you could implement within your business, allocating time on a regular basis to reflect on how this is going for you, your team and your clients.
Keep learning — create a small, manageable agenda for learning and improvement and implement it. There is a lot to be said for an action plan.
A business that is continuously improving is a magnet for committed employees, discerning customers, and success!
The information contained in this document is general and is not intended to serve as advice. It does not take into account the objectives, financial situation or needs of any particular person.