Broking in the time of COVID

Broking in the time of COVID

Brokers in locked-down Victoria and NSW say they’ve been robbed of meaningful connection with their clients. So much has changed, but they see it all as a passing phase

By Miranda Maxwell

Deflated is a word I hear quite regularly,” says Melbourne broker Andrew Arcuri. He shares the feeling of millions of east coast Australians whose lives in lockdown have seemed empty and interminable.

Mr Arcuri, the Managing Director of AT Arcuri & Associates, is describing day-to-day life for brokers working under suffocating stay-at-home orders, border closures and other restrictions on movement and personal freedoms.

Ups and downs: Andrew Arcuri says COVID has been a rollercoaster

His team has only been together in the office twice since March last year. And while the vaccination drive is providing a light at the end of the COVID tunnel, Mr Arcuri says confidence about the finish line is fragile.

“There is light but we are not there yet,” he tells Insurance News. “People can see it but I don’t know if everyone is feeling it.

“The last 18 months has been a rollercoaster. There are periods where people have been down, periods where they have been a lot better. At the moment there is hope.”

He says true confidence won’t return until there is real certainty that states won’t impose more lockdowns. It could take until spring next year “to fully see everybody feeling free in the sunshine”.

”It may not be until mid-next year that everyone is feeling confident enough to expand services and build things up.

“If the industry as a whole is not growing, then the supporting industries around it can’t. So until such a time as the economy rolls back out and people have confidence to grow and restaurants have confidence that they can order food or open up that second location, and people with their side hustles feel confident they can expand…

“Everyone is in a holding pattern. Once we get to a point where there is confidence that we are not going to get another lockdown, I am sure they will start investing again.”

Business at Mr Arcuri’s brokerage is “holding up”. His team members stay in touch via regular virtual meetings, but he says frustration levels are higher than they were in previous lockdowns.

“Clients and underwriters have shown understanding that things are a lot harder working from home – so far,” he says. “At the moment clients are accepting of it, but I am waiting for that pendulum to swing. We are a service industry and the service needs to be met.”

Mr Arcuri has many commercial property owner clients who he says are “feeling the pinch”, and he has been kept busy finding cover for vacant properties. “Some industries are doing really well out of the pandemic and some are gone.”

The COVID challenges are being dealt with at the same time as clients with hard-to-place risks face a risk-averse market – with premium rises that are “tough to explain”.

“The market is a lot tighter now,” Mr Arcuri says. “It doesn’t help when insurers are exiting markets. It just means that whoever is left can charge what they want.”

He has avoided blowback about premium rises and exclusions by avoiding generalisations.

“Let’s talk about your policy, what works with your policy and how you react. That comes back to the insurance broker’s role, which is to provide specific advice as opposed to general advice.”

The times may be tough, but Arma Insurance Brokers at Maitland in NSW’s Hunter Valley has done pretty nicely, thank you. The brokerage, which is part of the Community Broker Network, has gross written premium of around $10 million a year and has grown about 18% in the past 12 months.

But while Managing Director Amanda Morris says things are going along quite well, that’s not the case with many clients. “We are having some hard conversations with clients that are suffering financially, and with the uncertainty of what’s happening in the future,” she tells Insurance News.

“There is no clear goalpost so it makes it really difficult for them to plan. That’s the hardest part.”

The 10 members of the Arma team are working from home, using Zoom not just for keeping in touch with clients and Ms Morris, but also to share morning and afternoon teas, and even lunches, with each other.

Hard conversations: Amanda Morris fears farmers are isolated

“We could pretty much work in Tahiti if we wanted to,” says Ms Morris, who admits keeping the team’s morale up has sometimes been a challenge. “Your team is like your family. I am passionate about looking after them and making sure there is connection between them.”

While payments through Jobkeeper and Jobseeker last year sheltered Arma’s clients – “it was basically a hibernation” – this time around they are more exposed. But she says there is now an acceptance of pandemic exclusions – a stark contrast to last year, when many clients called asking why business interruption insurance didn’t cover COVID.

“We have already been through that disappointment last year,” Ms Morris says. “The cafes and restaurants and pubs have already been through the realisation that the insurance isn’t triggering, so they’re not expecting it this time.”

But the pandemic challenges have taught clients to pay attention to their insurance cover. “They are really good at taking the advice now,” she says. “I don’t think the panic is there anymore. Last year we were not used to this and a lot of the clients panicked. This time it is a discussion.”

She says clients are now actively reviewing their cover and working out changed risk exposures as a result of lockdowns.

“It is a lot more work for the brokers because we are having discussions with clients that we wouldn’t normally have during the year. They are different discussions. The environment has changed.”

Sydney-based Anthony Barbara is the Managing Director at AJB Insurance Solutions, which he established in 2010. For him, the coronavirus lockdowns mean he hasn’t seen members of his extended family for far too long, and he misses his mother’s cooking. But it’s not all gloom. He can easily fill the days by working hard, walking his dog and doing things around the house.

Arma has a healthy farm portfolio and it’s farmers Ms Morris feels have most missed the face-to-face interaction when dealing with their broker.

“These farmers, and many of them are older, they don’t buy into the whole hype of what’s happening. They’re a different breed – they just say ‘get on with it’. We have personal relationships with many of our farm clients. We are always out on the farms, eating scones and all that fun stuff.

“Now they are isolated. Sometimes their family are in Sydney and they can’t see them, and they can’t see us.”

Ms Morris says her brokerage’s culture, policies and procedures of service have held it in good stead throughout the pandemic. She recommends always staying positive, seeing the goodness in life on a daily basis and practising gratitude.

“That is the main advice that I have been giving to clients. It is not even about insurance when they ring – it is about people and about talking to a fellow human being.”

It’s much tougher for the younger members of his staff, he says, especially those who are new to the industry. “They are missing the interaction and guidance they need.”

Missing out: younger professionals are losing learning opportunities, warns Anthony Barbara

But Mr Barbara accepts that lockdowns affect everybody differently. “Working completely autonomously is difficult for some people.”

AJB specialises in gymnasium and hospitality, and he says many clients “wanted to cancel everything” last year. The brokerage also experienced an influx of clients calling for advice, premium relief and extensions of payment terms.

“We were talking a lot of people off the ledge, so to speak,” he says. “We did a lot of talking, trying to relax clients and educate them so they wouldn’t cancel their policies. We had to find ways of maybe reducing their premiums, really going through the whole thing and discussing all of that.”

This year is “a mixed bag” and the AJB team tries to stay positive and offer solutions to customers and be upbeat. Mr Barbara says the focus on positivity has “improved the overall mood”.

Mr Barbara is a Community Broker Network authorised representative, and he is passionate about sharing industry knowledge. While he’s “definitely pro” about flexible working hours and workplaces, he says the industry needs to be careful its younger members aren’t sacrificing learning opportunities.

“When I started in the industry at 19 I learned from all the seniors around me, by listening, asking questions, making mistakes.

“If everyone is working from home we are going to lose a lot of that experience being passed on. The things I learned that put me in this position I’m in today I did not learn from online courses – I learned from people.”

Shane Brady, joint venture partner at Dandenong-based McLardy McShane South East, describes lockdown fatigue, Zoom cameos from his toddler and brokerages being robbed of meaningful connection with clients.

“Being Victorian, the lockdowns for us have been more of a compounding effect. We are up to lockdown number six now, which has been extended three times, so I suppose Victoria, more than anywhere else, is feeling triple the pain.

Family time: Shane Brady says being at home is great, but productivity suffers

“The whole lockdown fatigue, it just grinds everybody down. It has been a bit of a struggle.”

Mr Brady has a child under two and a baby due around about now, and is appreciative of the family time he has gained from working from home. His toddler is “absolutely loving it”.

“It is bittersweet. The whole lockdown situation is just so taxing and there is so much collateral damage in lots of areas, but one positive I can take out of it is that I get to spend a lot of quality time I would not have otherwise with the little man.”

“Him running around means that yes, productivity takes a bit of a dive,” Mr Brady says. “That is the situation we are all in.”

He says the main downside with working from home is the loss of the personalised client service he is able to provide. He misses meeting prospective clients and having that “real human connection”.

“Before, we were constantly out on the road, catching up with insurers, always doing something different. That social aspect of what we do has been taken from us. It’s tough having to connect meaningfully with clients and having to rely solely on Zoom and Microsoft Teams. That is the main drawback.”

The brokerage has a specialist manufacturing and technology offer which Mr Brady says has come through the mess of the past 18 months fairly unscathed. Extra staff have had to be assigned to deal with the expansion.

Manufacturing is “still absolutely alive and well” and even thriving in some areas, he says.

For example, a cosmetic and skincare manufacturing client was able to pivot the business at the start of the pandemic to sell facemasks and hand sanitiser, almost tripling their business over the past 18 months. A supplier of toilet paper to major supermarkets has also experienced a boom in business.

“It has been a bit of a mixed bag,” Mr Brady says. “Some clients are going really well, some are just plodding along and some have gone down slightly but not a lot.

“We have a lot of loyal and happy clients who are happy to refer new businesses to us, so we are in a pretty fortunate situation where our business is growing exponentially despite Victoria being pretty bleak at the moment.”

Mr Brady says some of the lessons learned through the pandemic will remain once communities are open again. “If the pandemic has taught us anything it is that there are lots of other ways to properly communicate other than a stock standard email.”

While he agrees things would have been far more challenging if Zoom and phone chats hadn’t been possible, he says they are “still no match for face to face”.

“As soon as we can, our main priority is to get back to being out and about meeting with our clients. Being able to sit down with them and build relationships and rapport – that’s what broking is all about.”