insurancebusinessonline.com.au Issue 1.1
LAUNCH ISSUE
SENISUB S E N I S U B GETARTS GETARTS Your complete guide to insurance broking success
rob whelan how brokers can flourish
SETTING AND IMPLEMENTING STRATEGY
sales, marketing and effective branding
Leadership and performance management
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CONTRIBUTORS
A rundown of some of the top business minds who have assisted in putting together the Insurance Business launch issue. JIM SHARPE
SENIOR LECTURER OF BUSINESS ADMINISTRATION, HARVARD BUSINESS SCHOOL Jim Sharpe is a Senior Lecturer in the Entrepreneurial Management unit. He teaches a second year elective on turnarounds, and the entrepreneurial manager, a first year required course. His interests are in the areas of business acquisitions, manufacturing, B2B niche marketing, turnarounds, pricing, leadership, family balance, large/small company differences, ethics, exit strategies and employee empowerment.
ANTOINE HERMENS
HEAD OF MANAGEMENT DISCIPLINE GROUP, MANAGEMENT CORE MEMBER, CENTRE FOR CORPORATE GOVERNANCE, UNIVERSITY OF TECHNOLOGY SYDNEY Antoine M J G Hermens MBA (Macq) fellow of the Australian Institute of Management and fellow of the Australian Marketing Institute, is the executive MBA director at the University of Technology Sydney. Antoine spent the first 16 years of his career as a manager and executive in a range of companies in the retail, car, and tyre industries. In this period he reached CEO of a joint venture company. Antoine is multi-lingual and draws on extensive commercial experience in his role as an academic and advises a number of national and international clients on strategy and alliance management.
DON O’SULLIVAN
ASSOCIATE PROFESSOR – MARKETING, MELBOURNE BUSINESS SCHOOL Don O’Sullivan joined the faculty at Melbourne Business School in 2008 from University College Cork, Ireland. Don’s principal academic interest is in the impact of marketing activities on company performance. His research has been published in the European Journal of Marketing, and the Journal of Marketing among others, and his case studies on technology marketing are taught in business schools across Europe. Don is an active member of the Chief Marketing Officers (CMO) Council of the USA. Since 2003 he has led the Council’s Marketing Performance Measurement research program, and is a co-author of the Council’s Report on this topic.
TOM RICHARDSON
MANAGING PARTNER, DELOITTE LEADERSHIP ACADEMY Tom qualified as an accountant, an investment banker, a Master of Business Administration and a strategy consultant before realising business succeeds because of people not Powerpoint. After 15 years as a consultant with Arthur Andersen, Bain International and most recently Deloitte, Tom advised Australia’s leading organisations on operational excellence and growth. Tom identified as a consultant the need for leadership capability to realise performance improvement in business and hence founded the Deloitte Leadership Academy. With over 3,000 Australian business leaders using the DLA, Tom has unparalleled insight into the use of cutting edge techniques to cost effectively and pragmatically develop our future business leaders.
MAARTEN BOS
POST-DOCTORAL FELLOW OF BUSINESS ADMINISTRATION, HARVARD BUSINESS SCHOOL Maarten Bos is a post-doctoral research fellow of business administration in the Negotiation, Organisations & Markets Unit at the Harvard Business School. He holds a PhD in Psychology from Radboud University Nijmegen and a BA in Psychology from the University of Amsterdam.
2 | MAY 2012
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OUR BROKER FOCUS COPY & FEATURES MANAGING EDITOR Trevor Treharne CONTRIBUTING EDITOR Kevin Eddy JOURNALIST Alex Holevas CONTRIBUTORS Jill Fraser, Charles Beelaerts PRODUCTION EDITORS Sushil Suresh, Moira Daniels, Carolin Wun
ART & PRODUCTION DESIGN PRODUCTION MANAGER Angie Gillies DESIGNER Ginni Leonard
SALES & MARKETING NATIONAL SALES MANAGER Peter Smith ACCOUNT MANAGER Peter Menzies COMMICATIONS MANAGER Lisa Narroway MARKETING EXECUTIVE Anna Keane TRAFFIC MANAGER Abby Cayanan
CORPORATE CHIEF EXECUTIVE OFFICER Mike Shipley MANAGING DIRECTOR Claire Preen CHIEF OPERATING OFFICER George Walmsley MANAGING DIRECTOR – BUSINESS MEDIA Justin Kennedy CHIEF INFORMATION OFFICER Colin Chan HUMAN RESOURCES MANAGER Julia Bookallil Editorial enquiries Trevor Treharne tel: +61 2 8437 4789 trevor.treharne@keymedia.com.au Advertising enquiries National Sales Manager Peter Smith tel: +61 2 8437 4740 peter.smith@keymedia.com.au Subscriptions tel: +61 2 8437 4731 • fax: +61 2 9439 4599 subscriptions@keymedia.com.au Key Media keymedia.com.au Key Media Pty Ltd, Regional head office, Level 10, 1 Chandos St, St Leonards, NSW 2065, Australia tel: +61 2 8437 4700 • fax: +61 2 9439 4599 Offices in Singapore, Hong Kong, Toronto insurancebusinessonline.com.au Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as Insurance Business magazine can accept no responsibility for loss
Welcome to the first ever issue of Insurance Business magazine, Australia’s newest quarterly title dedicated to the country’s insurance brokers. Alongside your four free copies of the magazine a year, we have also launched our free access website – insurancebusinessonline.com.au. Australia’s insurance broker space will get its first website which is updated daily with breaking news as it happens, alongside complete multimedia functionality which will encompass photo galleries and Insurance Business TV. So why launch a new title specifically targeted at insurance brokers? Insurance Business is the latest venture for leading multinational publisher of business-to-business and consumer titles, Key Media, who publish Your Mortgage, Your Investment Property, HRM (Human Resources Management), Human Capital, Mortgage Professional Australia, Wealth Professional, Australian Broker plus Corporate Risk and Insurance. We want to be an independent voice in the insurance broker space, and provide more than just a market overview – Insurance Business will be a business tool designed to boost the profitability and success of your insurance brokerage. This launch issue focuses on how to successfully implement the wide range of business strategies needed to run a prosperous insurance brokerage. We’ve gathered some of the top minds from around the world – including academics from business schools such as Harvard, Melbourne and UTS. We have also spoken to various insurance players to give you a better understanding of the specific strategic challenges that face brokers. Our opening interview is with Rob Whelan, CEO of the Insurance Council of Australia, who gives an overarching impression of the insurance landscape for brokers and how you can succeed through the various challenges that will be thrown your way in the coming months and years. The most important aspect is that we produce a title that you, the insurance broker, wants, and needs, to read. As such we would love to hear from as many of you as possible. What do you want to read in Insurance Business? Who should we be speaking with? And if you want to contribute yourselves, perhaps as one of our Broker Focus pieces, then let us know. Welcome and enjoy. Trevor Treharne, Managing Editor, Insurance Business
CONNECT
Contact the managing editor: Printed on paper produced from 100% sustainable forestry, grown and managed specifically for the paper pulp industry
trevor.treharne@keymedia.com.au MAY 2012 | 3
CONTENTS
6 INTERVIEW
6 | Rob Whelan The Insurance Council of Australia’s CEO talks us through a tough period for our industry, but explains why there is every reason for brokers to be optimistic moving forward.
STRATEGY & PLANNING
12 | The game plan Do you have a strategy for business growth? If not, you could be on a road to nowhere.
MARKETING AND SALES
20 | Marketing forces Marketing your business effectively is probably the second most important strategic activity you can undertake after planning your overall strategy. What are the challenges? 26 | Brand value Is a strong brand really important for a small company? It could be even more essential than for larger firms.
PEOPLE AND MANAGEMENT
30 | What makes us tick How can you be a leader, not just a manager – and take your team to the next level?
30 4 | MAY 2012
36 | The people factor Growing your business invariably involves one thing: staff. How can you attract the best employees – and keep them interested?
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40 SYSTEMS AND IT
•
40 | Wired world You may be able to survive as a ‘man with a laptop’ for a while, but eventually you’ll need to consider an IT infrastructure. What are the pros and cons?
BROKER FOCUS
46 | Sean Bemrose Director at Queensland-based Tony Bemrose Insurance Brokers tells us what makes a good broker, what the next 12 months will hold for insurance brokers and why going niche is the way forward. 48 | Assistance Required Your guide to the best resources around to help your business
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INTERVIEW / ROB WHELAN
Rob Whelan, CEO of the Insurance Council of Australia, talks to Trevor Treharne about the challenges facing insurance brokers, how they can improve their business strategy and what the ICA is doing to help Q: The launch issue of Insurance Business is a business strategy special for brokers. What specific demands are there within the insurance space that will affect a broker’s approach? A: The insurance industry has to cope with an increased level of regulation, in terms of requirements, around some of its policies. It also needs to deal with an increasing cost base, which is coming from a number of areas, such as reinsurance costs, the cost of additional capital and the input cost of aspects, such as building materials and labour, which go to the work around the repair and restoration of assets. Those factors are affecting the pricing arrangements insurers are having to put into their premiums. On top of all of that are those regulation aspects where insurers have to comply, not just in terms of capital, but also policy offerings, such as flood insurance and other aspects in travel insurance, and so on. So there are a number of factors an insurance business needs to contend with in their specific business strategy. 6 | MAY 2012
AFTER THE
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MAY 2012 | 7
INTERVIEW / ROB WHELAN
“There was no sympathy for insurance companies from the media or politicians during that period after the floods” Rob Whelan
Q: What’s unique about the insurance space in Australia compared with other geographies? A: We are subjected to startling weather conditions in Australia. We’ve had our fair share of floods, hail and, in the dry periods, we are subjected to the perils of bush fires. Over the past 12 to 18 months, the industry has seen somewhere around $5bn in insured losses occur in Australia alone, not counting the additional effects of [the earthquake in] Christchurch, New Zealand, which many of the Australian companies were exposed to. We have to contend with that in terms of the nature of our business models and financial arrangements. These recent events, some would say, are unprecedented and new benchmarks have been drawn as a result of those consequences over that period. 8 | MAY 2012
Q: When dealing with customers, how best should insurance brokers deal with an apprehension from their client that they will find a way out of paying out on a policy? How do you build that trust? A: That is the fundamental aspect of insurance – it is based on a promise. Brokers play a key role in being able to provide assurance to their clients that they have evaluated the client’s appropriate needs and have matched those with the right policies. In those circumstances there should be no argument as to whether the polices will respond to the appropriate risks. It is always about getting those assessment needs right and then providing accurate advice on the product, so payment should not be of concern.
Q: Australia has been hit with some tragic natural disasters in the past year or so and there were various mainstream media reports of claims going unpaid. How detrimental was the effect of that on the reputation of the Australian insurance industry? A: There is no doubt that the brand of insurance was damaged in those events, despite the fact they were extraordinary in their size, complexity and breadth. There was no sympathy for insurance
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BROKING STRATEGY TIPS Dos...
Don’ts...
“For insurance brokers, there is no doubt the quality of advice is increasingly under scrutiny by the government,” says Whelan. “The ability of brokers to evaluate the market offerings and match client needs with the appropriate policy is fundamental, particularly in the business and commercial environment, which is where brokers mostly work. The value of advice is increasing in the marketplace and, in the general insurance space, it has been accepted that it is a different set of products produced by brokers in that market, they are not tied to investment returns, so the conflicts of interest are not as apparent. Brokers need to be prepared - it is still an ever-growing area of government attention that the appropriate advice models are being delivered into the market.”
“Not shopping around, interrogating the market or fully comprehending the needs of their customers are fundamental mistakes a broker could make,” warns Whelan. “The pressure is often on brokers to be able to provide advice, which sometimes their clients don’t welcome as it comes with a price. Brokers must make it clear that such an investment is in the best interests of the client. The latest example is where brokers were encouraging their customers to take out business interruption insurance and/or flood cover, and sometimes that is not a happy prospect for some businesses because of the costs involved. I’m sure those who took up those offers ahead of the Brisbane floods were very pleased their broker gave them that advice.”
companies from the media or politicians during that period after the floods. There is still some rebuilding that needs to be done to restore community confidence in the insurance industry, so they know it is able to respond to these types of events. A lot of work has been undertaken to improve that brand reputation already.
Q: You made calls for policy documents to be clearer and meaningful to customers – could you expand on what you mean by “clear and meaningful”?
they are covered for in all incidences. The government and the industry has agreed that we need to try and do more around making it easier for people to understand exactly what they are covered for and what exclusions or caps there are on their policy. We have worked to have a common definition of “flood”, which will remove a lot of the confusion about what constitutes a storm or flood. We have also seen the introduction of a key facts statement, which is essentially a summarised version of the main elements that are covered by the policy, plus the areas of exclusion. All those initiatives are in place now and there will be more rolled out over the next couple of years.
A: A lot of the debate the community raised after the events is that they were unsure in terms of what they were actually covered for, which was typically in relation to the definition between river and flood insurance, or if a policy used very similar wording to describe the two. In many cases the river flooding is excluded. That is not the case going forward so a lot of those issues will disappear, but it did cause people a real concern that they were not clear about what their policies offered. Even those who were not subjected to those events [the floods] started to scrutinise their policy to see what they are covered for. Sometimes the language can be a bit obscure, legalistic, and we know a lot of people don’t read their product disclosure statements and, as a consequence, they are not entirely sure what
Q: Do you think, in general, insurance brokers do a good job of ensuring they are clear with their clients in terms of what their policy covers? A: Brokers do a good job. They have the advantage of being able to have a conversation with their client and provide financial advice because they are licenced to do so. In many instances direct insurers don’t have that ability, they have to rely on people to scrutinise their own PDS [Product Disclosure Statement]. The advice level is an important issue, particularly for more complex cover, and it always will be. So it is incumbent on brokers to do that
MAY 2012 | 9
INTERVIEW / ROB WHELAN
CUSTOMER SATISFACTION Shades of grey? After the floods and various mainstream media stories about how some policies went unpaid, the need for good customer service has never been greater. Here are a few possible reasons for high customer satisfaction ratings: RESPONSE BIAS: Only satisfied customers – or extremely dissatisfied – customers are likely to respond to surveys, potentially skewing results. DATA COLLECTION METHOD: Research suggests that higher levels of satisfaction are obtained via personal and phone interviews than via email questionnaires or self-administered interviews, as people are less likely to be critical when talking to an actual person. QUESTION FORM: Research suggests framing questions in a positive – ‘How satisfied are you?’ or negative ways – ‘How dissatisfied are you’ – affects the answer. Asking a question in a positive way appears to lead to greater levels of satisfaction.
work as they provide a vital service in reducing confusion and making sure people have the appropriate cover for their needs.
CONTEXT OF QUESTION: The order in which questions are asked can influence answers to later questions TIMING OF QUESTION: When you ask a question relative to date of purchase, it has an impact. Satisfaction is highest immediately after purchase (a ‘honeymoon period’), then decreases over time. SOCIAL DESIRABILITY BIAS: Some researchers believe respondents can tend to provide answers that are socially appropriate, holding back criticism in certain situations. MOOD: The simple mood of the customer when completing the survey can have an impact – respondents in good moods make more positive judgements. GENUINE SATISFACTION: Of course, high customer satisfaction could well be the result of genuinely satisfied customers. Source: Services Marketing, Cengage Learning 2010
ensure their clients picks what best, not what is cheapest? A: That is a constant dynamic and conflict. People
Q: Getting potential clients to talk about insurance can be a challenge in itself. What advice would you give to a broker on how they can provide invigoration around a sometimes dry subject? A: Insurance is often only interesting when you have to make a claim. It is a given that it is not the most exciting purchase people will make in their life, but what people need to understand is that this is an investment. It is something that will give them peace of mind, particularly if they are a business, that they will have continuity as their business is their life investment. So to protect that asset and income capability is fundamental to their way of life. Giving clients the understanding that by paying their premiums they are actually investing in the continuity of their future is a fundamental aspect for brokers to get across.
always try and find the cheapest possible deal, but that comes with a reduced level of cover. Brokers have to point out that you get what you pay for and that is the same for everything in life – you won’t get a Rolls Royce for the price of a Volkswagen! If your needs are properly articulated and analysed, then the brokers do a great job and have a huge role to play in providing people who don’t think about insurance with the information they need and explaining how these things work. They can then convince them that it is an investment worth undertaking. Brokers can also ensure their client’s insurance is tailored to their needs, so they do get the best cover for the best available price.
Q: This ‘cheapest-first’ approach often seems to be the case in health insurance, where people are simply trying to avoid paying their Medicare levy... A: You often see people taking out cover for the
Q: What do people value higher – the cheaper insurance or the most comprehensive? How does an insurance broker 10 | MAY 2012
lowest possible price as they think it takes it off the agenda. Unfortunately that can come back to bite you when you work through what your real needs
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SERVICE QUALITY Service quality focuses on cumulative attitudes to organisations over a number of experiences, and often also takes into account management and employee perceptions of service levels. Collating and monitoring customer and other stakeholder feedback over time – satisfaction surveys, complaints, mystery shopping, employee surveys and specific service quality exercises such as SERVQUAL – to build up a long-term picture of service and areas in which it can be improved. The SERVQUAL (also known as RATER) framework is a tool devised specifically to measure service quality. It consists of two questionnaires, one which measures consumer perceptions of excellent companies in a service field, the second which records perceptions of the company being assessed. The system assesses five service quality dimensions:
RELIABILITY:
ASSURANCE:
TANGIBLES:
EMPATHY:
CONSISTENCY AND DEPENDABILITY OF PERFORMANCE
COMPETENCE OF ORGANISATION, COURTESY TO CUSTOMERS, SECURITY OF OPERATIONS
APPEARANCE OF EQUIPMENT, OFFICES, CORRESPONDENCE AND EMPLOYEES
GIVE INDIVIDUAL COMMITMENT TO ATTENTION, PROVIDE SERVICES OPEN AT IN A TIMELY MANNER CONVENIENT HOURS, CUSTOMER’S BEST INTEREST AT HEART
are and what exposures you have. That is where brokers can play a huge role as they can clearly articulate what exposures people have and what they should be getting cover for. They can then try to match an appropriate commercial outcome for them.
Q: Would it be fair to say the insurance industry has been slow to exploit the social media space? What can be done to reverse that trend? A: I agree. We are a very conservative industry and sometimes we are a bit slow at adapting and adopting new ways of communicating with customers. We at the Insurance Council are very aware of how quickly things are changing and we are aware of the need to be able to communicate in a variety of ways with our stakeholders. We are encouraging all of our members to do the same and a lot of them are adopting these sorts of procedures themselves. So we have been a bit slow, but we are picking up pace now.
Q: Crystal ball time – what do you see as the major challenges and opportunities open to Australian
RESPONSIVENESS:
“Brokers have to point out that you get what you pay for and that is the same for everything in life – you won’t get a Rolls Royce for the price of a Volkswagen” Rob Whelan insurance brokers in the coming months and next few years? A: The pressure that will come on the companies to manage their margins and their cost base. Brokers will need to manage them moving forward as the cost inputs are going up and some companies will face some difficulties with that in the future. There is a positive prospect going forward, as we always go through these types of dips with difficult claims environments and pressure on the companies, but we come out of that and go into a more benign environment. We need to ride out the cycles and understand there are good times and bad times, and we will come out of it. The brokers will have to deal with companies managing increased cost inputs.
MAY 2012 | 11
BUSINESS STRATEGY / STRATEGY AND PLANNING
GAME
PLAN
Do you have a strategy for business growth? If not, you could be on a road to nowhere. Kevin Eddy reports Having a clear, well-articulated strategy for your business is widely acknowledged to be one of the most important things you can do in making sure your company is successful. It can be a tricky thing to get right, especially when a firm is in a relatively small state in a fast-moving industry. What timeframe should you be looking at? How do you set goals, and break them down into achievable targets? How do you stay on course – or adjust as necessary? The first thing you need to do is make time to develop one. The classic approach is to take a day or two out of the office with your business partners, key employees or outside parties such as business coaches or consultants. Others find that a couple of hours is sufficient, while some still use holidays and quiet periods in the market to do some of this planning.
1
KNOW YOUR VALUE PROPOSITION
Next, you need to have a clear idea of what makes your business different – what your overall value proposition is. Antoine Hermens, head of the Management Discipline Group and executive MBA director of University of Technology Sydney, 12 | MAY 2012
says that too many small businesses don’t have a clear idea of what their offering is. “The biggest challenge for small and mediumsized companies is really understanding what value you add to your customers,” says Hermens. “My research indicates that successful SMEs have really thought long and hard about their unique value proposition and the economic value they’re adding for their stakeholders: customers, employees and suppliers.” Hermens highlights using the ‘balanced scorecard’ approach as a good way of assessing value. This is also the point to look at elements like your market positioning, analyse your competitors and your customer base. A wide range of tools have been developed to assist with this. He also recommends that you look at your business and ask what’s unique about it. “If you stopped doing business tomorrow, would anyone really miss you?” he asks. “If the answer’s no, then you’ve really got to go back to square one. You can talk about vision, mission and objectives – but if you don’t know what kind of business you want to be, what your competitive advantage is, it’s meaningless.”
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TOOLS FOR THE JOB
external origins
internal origins
There are a staggering array of strategy models, frameworks, diagnostic tools and systems out there – several of which are too clever for their own good. Here’s Insurance Business’s picks of the most useful. helpful
harmful
strengths
weaknesses
opportunities
threats
new products
market penetration
product development
existing markets
existing products
new markets
market development
diversification
SWOT – DIAGRAM A well-established system first developed in the 1960s and 1970s for assessing the market position of a business and/or project. It involves analysis of Strengths, Weaknesses, Opportunities and Threats using the grid framework on the left USEFUL FOR: Determining market position; identifying weaker areas to strengthen; identifying strong areas to exploit further; competitor analysis
ANSOFF PRODUCT/MARKET MATRIX Another long-established tool, the Ansoff matrix, is intended to help develop growth strategies by providing a framework for developing existing and new products and markets USEFUL FOR: analysing current market position; diversification strategies; identifying new markets; potential expansion opportunities
financial
BALANCED SCORECARD (BSC) A tool developed in the 1990s by Robert Kaplan and David Norton, the balanced Scorecard measures four key performance metrics – financial, customer, internal process and growth. As the name suggests, it’s intended to give a more ‘balanced’ view of performance and strategy than pure financial metrics
vision and strategy
customer
USEFUL FOR: value proposition, strategy development and prioritisation, ongoing monitoring
high quality company A
low
relative market share high low
market growth rate
USEFUL FOR: Assessing current product/service mix; identifying growth markets; cash flow assessment
learning and growth
stars
question marks
cash cows
dogs
high
BCG MATRIX Developed in the 1970s by Boston Consulting Group, the BCG Matrix classifies products (and services) into one of four categories based on combinations of market growth and market share
internal business processes
company B company C low price
high price
company D company E company F
low quality
PERCEPTUAL MAPPING A tool that maps rival brands onto an x/y axis graph based on various attributes, usually based on customer research. Attributes are not typically seen as positive or negative, but instead reflect the needs of different market segments USEFUL FOR: market positioning; competitor analysis; customer targeting; launching new services
VALUE PROPOSITION The unique factors which explain why a customer should use your service or product. This is best summarised in a short statement (or several short statements).
MAY 2012 | 13
BUSINESS STRATEGY / STRATEGY AND PLANNING
STRATEGY: Q&A Jim Sharpe, Harvard Business School Jim Sharpe, Senior Lecturer at Harvard Business School’s Entrepreneurial Management Unit, is a successful entrepreneur in his own right. He shared his thoughts on strategy with Insurance Business.
Jim Sharpe
HOW DOES SETTING STRATEGY FOR A SMALLER, ENTREPRENEURIAL BUSINESS DIFFER FROM LARGER FIRMS? Large firms have a much longer time horizon and a global outlook. Determining their funding needs, operational investments and resource allocation is supported by their strategic planning. Small- and medium-sized businesses are more operationally focused with less complex needs. Planning for growth with existing customers, developing product extensions, adding incremental capacity and finding more profitable opportunities keeps them busy. IN TERMS OF TIMESCALES – HOW FAR AHEAD IS REASONABLE? HOW IMPORTANT IS IT TO HAVE AN EXIT STRATEGY IN MIND? An entrepreneur should probably be thinking no more than three years out. Having a good idea of the plan for the upcoming year along with what might be needed the year after and some thought about the year after that. More importantly, managers need to be ‘stress testing’ this relatively short-term outlook. Will there be a recession? What if a major customer or vendor goes out of business or a couple of key employees leave? Planning for an exit can start when the owner is emotionally ready to leave the
business; it generally takes a few years, so well within the planning horizon. HOW DOES A BUSINESS GO ABOUT STARTING THIS PROCESS? ARE THERE ANY TOOLS THAT YOU HAVE FOUND PARTICULARLY USEFUL IN STRATEGY SETTING? Look first at the business model: customers served, delivering/making the product or service, getting and serving customers and ensuring that the economics for future growth comes first. Then an assessment of the changing environment within which the business works helps set the stage for a SWOT analysis. Doing this every couple of years is a good exercise. HOW SHOULD YOU MAKE SURE YOU STAY ON TRACK WITH A STRATEGY – AND WHEN DO YOU KNOW WHEN TO CHANGE IT? Sooner rather than later; it is always easier to wait for a little more information or another attempt at ‘fixing’. Moving to change direction decisively, based on even limited information, is one of the characteristics that make entrepreneurs successful. Generally, when a significant ‘event’ happens to the business or some major external changes occur are good times to reflect on ‘where we are headed’. WHAT’S YOUR SOLID GOLD BUSINESS ADVICE FOR AN AMBITIOUS ENTREPRENEUR? Pay attention to your customer and make it easy to do business with you. Charge enough for your product/ service, then some – unprofitable businesses don’t survive!
IN PRACTICE: DIFFERENTIATING IN INSURANCE
The cut-throat world of sports and entertainment has similar traits to the insurance sector, but one sports underwriting agency has found success by differentiating itself from its competitors by focusing on risk management. SLE Worldwide offers insurance in the niche sector of sports, leisure and entertainment. SLE was established in the US in 1952. The expansion into the international market came in 1994, when offices were opened in the UK, Canada, Mexico, Spain, Italy and Australia. In 2005, SLE was acquired by Ironbridge Capital and became entirely Australian owned. In a bid to stand out from the pack, managing director Brad French secured the services of an epidemiologist, also known as a bio-statistician. He believed that having a PhD qualified specialist to prepare critical data analysis for the various sporting codes would serve as a welcomed valueadd for brokers. French used a recent example where this research helped identify what, when, where, why and how a particular sport was racking-up injuries. “At the moment there is a push in Victoria to make headgear compulsory for all league and union players, but we don’t agree with it – headgear doesn’t prevent concussion – so we’re doing a sizable review for the rugby league,” he says. “Our epidemiologist Tony Carter sits on the medical panel for the NRL [National Rugby League] and on the
14 | MAY 2012
rugby union’s players’ occupational health and safety board. We get very involved with the sports; we don’t just rely on the broker to send out our message,” says French. Ongoing stoushes with media and certain government agencies served to confirm French’s philosophy for adopting an analytical approach to better educate his clients. “Tony is doing all this research to fight the battles with government and the media. The press are terrible with sport in Australia, so we help the media arms of these sports by providing research, and that’s the differentiator – most insurers just take the premiums, and pay the claims,” he says. “We try and do more than that; we get involved with sports – I call it risk management. I suppose for an insurance reader, that’s what they’d call it. It’s data analysis.” French says getting his claims staff involved with the sports at a grass roots level was also crucial. “They’re out there every weekend doing seminars, telling them [heads of sporting groups] how to make claims. You’ll find that during the football season we spend a lot of our time in the bush, from northern Queensland all the way to the Victorian border, doing seminars and telling the sport what they are covered for, how they can make a claim, how to prevent injury and just basic education,” he adds. “We get very involved: that’s our differentiator.”
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MAY 2012 | 15
BUSINESS STRATEGY / STRATEGY AND PLANNING
STRATEGY: Q&A
Jeff Hollands
Jeff Hollands, Westcourt General
Peta Ross, Mecon Insurance
Westcourt General is a brokerage that operates via a team of authorised representatives. Having opened its doors in Perth in 1982, they are now established nationwide. The company boasts 58 corporate authorised representatives, and approximately 72 individual reps.
Mecon provides tailored engineering insurance products. Their goal is to differentiate themselves by focusing on delivering good service and providing the market with tailored insurance products.
WHAT ARE YOUR FIRM’S OVERALL STRATEGIC GOALS? Our clients are our authorised representatives (ARs), so we look to grow our business through them. We have a separate division that does premium funding, and we’re also looking to add financial planning type insurance within the next six to nine months. It’ll be simple financial planning, so aspects such as term insurance, risk insurance and income replacement. It will allow our ARs to handle the clients’ general insurance, as well as whatever types of risk insurance they may need. Overall, we’re hopeful of increasing our premium pool to about $250m in the near future. HOW DO YOU GO ABOUT MEASURING PROGRESS IN YOUR BUSINESS? It’s around volumes. We run every state as a cost centre, where each state has its own cost and its own income, so we work very much on budgeting and put a lot of effort into that. Each of our state managers has a clear direction of how they must grow the business. We intend to expand into New Zealand as well. WHAT ARE YOUR TIPS FOR GROWING A BUSINESS? It’s a cultural thing – we focus very much on our ARs [our clients]. For example, we pay our guys every week [on whatever commission they have accumulated], but if they want to be paid commission straight away all they have to do is ask and we’ll do it. Everything we do is paperless – we’ve outsourced our IT and made it easier for our ARs to have access to technical support. It all goes back to providing good service for our guys. WHAT’S YOUR VALUE PROPOSITION? BRAD FRENCH, SLE WORLDWIDE Our value proposition is about good product and service.
JEFF HOLLANDS, WESTCOURT GENERAL Do what’s best for our clients.
PETA ROSS, MECON INSURANCE Focus on company culture and staff selection.
MICHAEL GRISTWOOD, SUNDERLAND MARINE MUTUAL INSURANCE COMPANY We exist for our members, everything is for their benefit.
16 | MAY 2012
STRATEGY: Q&A
HOW DOES YOUR BUSINESS KEEP UP WITH CHANGES TO LEGISLATION? We are a member of the Underwriting Agencies Council (UAC) and we subscribe to a number of industry publications – including law firm case bulletins. We receive updates on trends and legislation changes through these sources. Together with our working experience and knowledge of underwriting trends in our sectors of the insurance market, we also receive regular updates on general market trends and legislative changes from the insurance companies we deal with. DO YOU USE ANY EXTERNAL PARTIES TO HELP WITH YOUR BUSINESS STRATEGIES? We are fortunate enough that Hollard Insurance is also a Mecon shareholder. This connection to Hollard gives us access to a wealth of professional and experienced resources (in Australia, South Africa and in other Hollard operations around the globe).
The general consensus is that value propositions are best kept short – distilling your core competitive advantages into a few lines or paragraphs.
2
SET YOUR OVERALL VISION
The next stage is to set your ultimate goal or vision for the business – where you want your business to be, and when. What this means varies from person to person as does the timeframe in which you’re planning to achieve it. Some people operate on a calendar year basis; others work to five- or 10-year plans. Fiona Mackenzie, head of Macquarie Practice Consulting, recommends a three-year horizon as a good compromise. “We encourage our clients to step back and look at a three-year goal,” she says. “One year can be too ‘operational’: if you want to make any changes to the business it feels too tight. Five years, meanwhile, is a little far out for some people to feel that it’s practical.” The overall goal or vision should be based on where your business is at present. “We take a look at the business today. Key facts down on the table: key clients, revenues, profit, size and shape,” adds Mackenzie. “Then, we look at what you want it to look like in three years – once we know that, we can look at the ‘gap’ and what you need to do to achieve that.” That overall goal shouldn’t just focus on business metrics, however: Mackenzie says you should also
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STRATEGY: Q&A Michael Gristwood, Sunderland Marine Mutual Insurance Company Sunderland Marine is a UK established company (in 1882) specialising in the insurance of commercial marine hulls, including fishing vessels, small passenger craft and charter boats, in over 55 countries. The company also offers aquaculture insurance – tailor-made policies providing cover for stock, equipment and support craft. As a mutual, Sunderland Marine is owned by, and run, for the benefit of its current and future members. New Zealand members are managed from Nelson, Australasia’s largest fishing port. A small team provides underwriting and claims support.
we don’t want to lose money as that would decrease the owner’s funds, but we don’t have to make money because it goes nowhere. It’s different to being a shareholder, where you hope for better returns every year, but if you’re a policy holder you’d rather have your premiums kept low every year. We don’t do anything with the money, we don’t give it back. There are some mutual companies that give money back to its members – we don’t. We just try to keep premiums as low as possible. We just want to cover our costs.
WHAT ARE THE COMPANY’S OVERALL STRATEGIC GOALS? We’re a mutual, so we don’t have shareholders in terms of we’re not an AIG or a QBE. Rather, we’re owned by our members who are our policy holders. So our goal is to continue on and not lose money for our members, by giving good service. It’s not about returns, unlike the QBEs and AIGs, where it’s all about shareholders returns. As a mutual we obviously have a slightly different ethos in that we exist for the membership.
WHAT ARE THE TIPS FOR GROWING A BUSINESS IN THE INSURANCE SPACE? For us, it’s knowing our clients and knowing the markets. We’re a niche player, we have to know exactly who to deal with, and we’re lucky because we’re in marine and a lot of our business is fishing vessels, so it’s easy to identify. It’s knowing who you’re dealing with and being there for the long term. We’ve been writing insurance in Australia since 1985, and we’ve seen our fair share of competitors come and go – people come into our business, try to make money, find out they can’t and leave. We are here for the long haul, because that’s all we do!
HOW DOES YOUR COMPANY MEASURE PROGRESS? We don’t have to grow for the sake of growing. Obviously
factor in your personal goals. While the overall vision should be relatively realistic, it can be somewhat aspirational, too – crunching it down to numbers and targets can come later. Whether you call this a vision, a big hairy audacious goal or a stretch target doesn’t matter – the key is to concentrate on where you want to be at the end of your timeframe. Doug Mathlin of consultancy Frontrunner Group adds that it can be useful to think of this in terms of financial metrics. “In a commission-driven business, you need something you can focus on: for example, saying you want to write $100m worth of business in a year.”
3
BREAKING IT DOWN
Once you’ve got your overall goal and your timeframe, you need to figure how to get there – and this is the nitty gritty of strategic planning. You need to work backwards from your large, aspirational goal into measurable, timed targets, ideally monthly or even weekly. The tried-andtested SMART rules for target-setting are invaluable here. Any targets you set should include the following criteria: • Specific • Measurable • Attainable • Relevant • Timely From these targets, you can track how you’re going
The key is to concentrate on where you want to be at the end of your timeframe and extrapolate other aspects of strategy such as: • Marketing: how many campaigns do you need to mount to fulfil your targets? • Product/service offerings (should you diversify?) • Operational issues, such as staffing: do you need administrators or more loan writers, or expand into more offices • Process (can you put in place better systems to improve efficiency and therefore write more business for the same resource requirements?).
4
FINANCIALS
Understanding the financial implications of your strategy is a fundamental part of success. Budgeting should be based on realistic sales estimates, based on your current position and long-term goals; you should also take into account every cost. It is useful to break down costs into discrete areas, such as people, supplies, facilities, equipment, marketing and other. While these numbers don’t need to be accurate, they should be
STRATEGIC PLANNING You need to ask yourself:
• What do we do? • For whom do we do it? • How do we excel?
MAY 2012 | 17
BUSINESS STRATEGY / STRATEGY AND PLANNING
EXECUTIVE SUMMARY
“It’s good to have quick wins, especially for small businesses”
time to plan your strategy, and commit to Make carrying it out
Fiona Mackenzie
out analysis of your market position, competitors Carry and areas of potential growth
a realistic estimate. You should work several scenarios if at all possible, with conservative and optimistic income figures so that your strategy is stress tested. It may also be worth plotting a cash flow projection showing the timing of payments and expenditure, too. Plotting in some high-paying (or money-saving) ‘quick wins’ is also important, especially if you’re looking at investing in the business for the longer term. “It’s good to have quick wins, especially for small businesses that need to get benefit back quickly,” says Mackenzie. “Revenue is key and if they’re going to be spending time investing in the business in some way for longer-term goals – which can drain resources – you have to look at activities which are going to give them benefit in terms of cash to help invest. Quick wins can range from sorting out bugbears in processes to make business run smoother, catching up with a referral partner or outsourcing loan processing to free up sales staff time.
down the vision into goals and targets; these Break should be SMART (Specific, Measurable, Attainable, Relevant, Timely) your strategy up into operational areas, Divide with goals for each. Make sure these tie back to your core strategy
Plot in some ‘quick wins’ to get cash coming in your financials inside outside – forecast on both Know conservative and positive sides. Carry out cash flow projections too at your business process – can you streamline it Look at all? can be a cost-effective solution and/or Outsourcing give you access to specialists
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MONITOR, REVIEW AND ADAPT
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It’s all very well building a grand plan, but if it ends up in the filing cabinet until next year, then it’s no use. Therefore, it’s important to keep monitoring your progress on a regular basis. “If nothing else, my strongest suggestion would be to set a recurring appointment with yourself called ‘Business Review’ that runs 12 times a year at the very least,” says Mathlin. “The best time to do it is straight after commissions are paid: that’s a trigger to review exactly the results achieved and adjust the plan for the next 30 days as necessary. Even if it’s just a reminder that pops up on the Friday afternoon for you to take an hour away to review and plan, it’ll be time extremely well spent.” You shouldn’t be hobbled by your strategy either. “The vision should be where you want to get to: the route you get there might change. Some things you implement will not work; some will work better than you expect. There are some things you haven’t thought about that you will be able to do, so you shouldn’t necessarily wait until the end of the month to decide to do something differently.” 18 | MAY 2012
a vision in mind of what you want to achieve – and Have a timeframe
T O-D O L
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MAY 2012 | 19
BUSINESS STRATEGY / SALES AND MARKETING
Marketing your business effectively is probably the second most important strategic activity you can undertake after planning your overall strategy. Charles Beelaerts breaks down the challenges for your business
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MARKETING STRATEGY Step by step
1
IDENTIFY YOUR TARGET CUSTOMER GROUPS/MARKET SEGMENTS
2 3 4 5
IDENTIFY YOUR VALUE PROPOSITION(S)
TAILOR YOUR CUSTOMER EXPERIENCE
MARKETING SERVICES Key issues INTANGIBILITY: Services are intangible. You don’t have a physical product to sell and you don’t sell from inventory. If a physical product is defective, you can take it back and get a replacement. You can’t always do that with a service. VARIABILITY: You can’t standardise the product offering. Even if the terms of two insurance policies are identical, the process by which they are sold varies. INSEPARABILITY: It is difficult when marketing a service, such as insurance, to separate the consumer and the producer. PROCESS: The whole service experience with insurance cover impacts on the consumer in a way it doesn’t with a physical product.
TAILOR YOUR COMMUNICATION CHANNELS AND MIX TO MARKET SEGMENTS
RESEARCH: Services are more difficult for consumers to research than where there is a physical product. Word of mouth is more important.
MONITOR, REVIEW AND UPDATE REGULARLY
COMPLEXITY: This is related to intangibility – quite often, a service such as insurance broking is a complex product and it is not generally an easy thing for people to understand.
Marketing financial services – particularly in insurance – is not as straightforward as marketing many physical products. There are a number of extra hurdles that must be crossed before a purchase is made. These can be boiled down to two key issues. First, insurance can entail a uniquely large commitment on the part of consumers compared with anything else they will buy, and the commitment is based on the trust they have in their broker. The experience of Don O’Sullivan, an associate professor of marketing at Melbourne Business School, is that the sheer size of the purchase slows down the consumption process, compared with smaller transactions. Secondly, there can be difficulties demonstrating that you are unique in the market – whether that’s in comparison with other brokers or direct insurers. Sullivan adds that when marketing and selling insurance-related services, “you need to be more believable than the competition – and competition may default to price.” Dealing with the first issue – the perceived risk of the purchase – can be dealt with in a number of ways, not least through the reassurance of a strong
brand, communicating in the right way at various points in the decision-making cycle and peer recommendation. Differentiation to other service providers, meanwhile, can be carried out through a clear marketing strategy. How can you put one in place?
STEP ONE: SELECTING MARKETS The first step in developing a marketing strategy is to identify the consumer group to whom you are making a unique offer – usually as part of your overall strategy setting. The initial task is to evaluate the needs and characteristics of consumers and divide the market up into segments according to such things as geography, income, risk and so on. These segments should be evaluated in terms of profit and growth potential. You may choose to focus on one segment, or service several. O’Sullivan points out that all insurance organisations have a choice of market and positioning and this should be an integral part of their strategy.
STEP TWO: KNOW YOUR STRENGTHS Once you know the type of customer you are target-
CUSTOMER EXPERIENCE The sum of all experiences – good and bad – a customer has with a supplier of goods or services, over the duration of their relationship with that supplier. It is viewed by a number of experts as the single most important aspect in business success.
MAY 2012 | 21
BUSINESS STRATEGY / SALES AND MARKETING
THE SEVEN Ps OF MARKETING The seven Ps of marketing is a well-established formula to evaluate both your business strategy and marketing mix by analysing seven key customer touch points. Insurance is a unique business area, so even general business theory needs to be tailored to our industry’s specific needs. How does the seven Ps apply to insurance broking? 1. PRODUCT An insurance policy can be different every time it is received. The service and the add-ons one gets can be different for otherwise identical products and the information a consumer gets is greatly influenced by the way in which a insurance broker deals with a customer. WHAT YOU NEED TO ASK: What are the key differences in the insurance products? How do these relate to the target market? 2. PRICE There are many, often similar, offerings and competition can default to price where an insurance broker cannot differentiate themselves on other bases. Prices are freely available online so insurance brokers need to focus on non-price differences. WHAT YOU NEED TO ASK: What other services do I offer other than price? Eg speed, knowledge, choice of insurer, personal service? 3. PHYSICAL DISTRIBUTION Communicating the service is critical and you need to ensure that the distribution of information, including physical contact, is in line with consumer needs. WHAT YOU NEED TO ASK: How can I ensure my communications are consistent and hit the right touch points at all stages of communicating with the client?
“The days of formalised communications, i.e. putting on a ‘persona’, has gone by the wayside” Kirrily Dear BRAND ADVOCATE A brand advocate is a person who talks favourably about a brand, product or service and passes on positive word-of-mouth messages about the brand to other people. Advocates can be other businesses you have referral relationships with, public figures and/or satisfied customers.
22 MAY 2012
ing, you can start to shape your market positioning and communications. However, you also need to know what you’re highlighting as your key messages to various market segments. There are a range of marketing tools available to do this, with the long-established ‘Seven Ps’ of services marketing (see boxout) commonly used to analyse your marketing strategy. Another, simpler but arguably just as effective tool that’s become popular in recent years is the concept of the ‘value proposition’: in effect, this is a short statement espousing the unique factors that explain why a customer should use your service or product. Again,
4. PROMOTION AND ADVERTISING Online marketing has reduced the pressure on advertising. Getting messages out has become more straightforward. The importance of social media has increased enormously. WHAT YOU NEED TO ASK: What channels are most appropriate for my target customer groups? How should these be used most effectively? 5. PEOPLE As consumers can obtain the same deal from many different brokers or businesses, every touch point becomes important with a service that is intangible. WHAT YOU NEED TO ASK: Are my people upholding the values we are portraying to the market? 6. PROCESS Marketers need to be aware of every process step a consumer goes through and how to deal with it – right from when a consumer starts looking for insurance until they fill out the forms. WHAT YOU NEED TO ASK: What steps are consumers taking on their journey with me? How can I ensure the process is optimised for them and espouses our value proposition? 7. PHYSICAL EVIDENCE Financial services are intangible, but it is essential that you examine whether there is a consistency of look and feel of documentation, particularly of your own brand, at all stages of the process. WHAT YOU NEED TO ASK: Are all my public-facing touch points – documentation, websites, office branding, uniforms etc – consistent and in line with our value proposition? Do I have a strong brand?
these may differ for market segments, but tend to be similar. Marketers argue that this value proposition is something that businesses should pay extra attention to; Kirrily Dear, founder of marketing and management consultancy, Eyes Wide Open, sees insurance broking businesses struggling most with the area of value proposition.
STEP THREE: KNOW THE CUSTOMER’S JOURNEY Anouche Newman, associate lecturer in marketing at the University of Technology Sydney’s Business School, agrees that customer experience is crucial – and you need to be on top of it from the word go. “[The customer experience takes place] from the moment that they meet a broker, through to experiencing the service and actually consuming the service itself. That should all be taken into account from a strategic perspective.” Newman suggests that a worthwhile exercise
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IN PRACTICE: INSURANCE MARKETING
Sales and marketing is diverse in each industry, so what does the insurance space offer in challenges on this front? Firstly, many brokers are selling a product that consumers don’t want to ponder the consequences of that investment “paying out”. This is most notably true with life insurance, but ranges down to niche markets such as wedding insurance, where some outlets are even offering “cold feet” cover, which for many seems to be tempting fate! Neil Sheppard, manager at ProRisk, told Insurance Business that successful sales and marketing in the insurance space will perhaps stem from an increased focus on the most important aspects of what an insurance business actually does – paying out. “The unique thing about marketing in insurance is that people don’t market the key to insurance which is claims,” says Sheppard. “Rarely do you have any marketing where people talk about their claims handling or their ability to pay claims as everyone is just selling on price. It would be a brave person to do something different, but that seems odd to me. The key product we are selling, which is the claims paying ability of an insurance company, is not what is marketed.” Sheppard said ProRisk have their own claims manager to ensure control over that claims process, while most underwriting agencies will outsource their claims. “Having it in-house enables me to have an active role as we want to
handle those claims in the right way,” says Sheppard. “People pay their premiums, they want to know that if something goes wrong we are on their side. What I will be looking to do over the coming years is push our claims capability more, as it is unique. This is different to a lot of marketing in the insurance industry, which is about product and price.” In terms of marketing spend, few insurance brokers can get even close to the type of spends that we see from the big insurers. You can rarely get through a set of television adverts or a magazine without seeing some form of advertising from an insurer, with life insurance adverts on TV becoming more regular than AFL coverage in Victoria! This can be enhanced by the broker though. These widespread marketing campaigns raise awareness of insurance needs and could be from brands which you deal with directly. This means insurance brokers can approach clients on a subject they are already thinking about and leverage off the large insurance marketing that has already taken place. Even if some of this marketing is from a more direct insurer who you do not deal with, they might be promoting a product that you do offer. When it comes to brokers approaching clients, it is about conversation starters, and if a large scale marketing scheme in the insurance space is what can start that conversation, then brokers should not be shy to exploit it.
Neil Sheppard
MAY 2012 | 23
BUSINESS STRATEGY / SALES AND MARKETING
AT A GLANCE: THE MARKETING MIX DIRECT MAIL
SOCIAL NETWORKING
TELEPHONE MARKETING
BUILDING REFERRAL RELATIONSHIPS
ADVERTISING – PRINT AND ONLINE
SPONSORSHIP
EMAIL NEWSLETTERS
PUBLIC RELATIONS
when planning your marketing strategy is to ask exactly what the customer experiences from start to finish and then determine how you, as a marketer, can communicate your value proposition at all stages of the process. O’Sullivan adds that you should also demonstrate that you are unique in the market: that comes back to researching the market and having the right elements like promises of delivery – in effect, being able to get the customer the insurance they want.
STEP FOUR: COMMUNICATE YOUR MESSAGE
SOCIAL VALIDATION The act of checking decisions by consulting those around us, whether face-to-face or online. It’s seen as a powerful marketing tool.
24 MAY 2012
Once you know a) your value proposition, b) your target consumer group(s) and c) the customer journey, you can then work out the best ways to communicate with them at each stage. The integration of communications into the insurance marketing mix has taken on new dimensions with the ever-increasing number of ways you can contact consumers (see boxout). Matt Mitchener, marketing manager at Vow Financial, recommends three key methods of client contact. “First, simple eDMs (electronic direct mail) to your database – no matter who they are. It is important to get your name, brand and contact details in the inbox of your database at pertinent times during the year,” he says. “Second, text messaging, for quick, cheap and easy communication en masse to your current clients. Why not send out a personalised SMS for a birthday? Finally, telephone – finding a reason to talk to a client or prospect is easy. All you have to do from there is keep the contact regular so that you remain top of mind.”
Make sure you can monitor which methods are most effective – whether that’s putting a special offer code on a print advertisement, using analytics software or a simple ‘where did you hear about us’ question into your initial client interview, being able to assess which methods of communication are most effective is essential in refining future communications. Dear warns that you can face an uphill struggle in a world that’s increasingly bombarded with marketing and media messages. “There is an absolutely huge amount of market cynicism to overcome,” she says. “Physical evidence, case studies and results, and all the measurable aspects of what you do are critical in overcoming that.” Providing something that’s more than just a sales pitch can make the difference between gaining a client or being instantly dismissed. “The days of formalised communications, i.e., putting on a ‘persona’ has gone by the wayside,” says Dear. “Buyers are looking for a very authentic voice within the marketplace so they feel like they are connecting and understanding the real person behind the service. That again helps with the feeling that they’re buying a known product.” On a practical level, it is important to make sure that communication is consistent across every single interaction that a consumer might have with your firm, either online or face-to-face “For example, you might have a wonderful website with lots of information and a beautiful design,” says Newman. “However, it sends the wrong message if the office is really shabby and the colours and branding that were used on the website are nowhere to be seen.”
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WORD OF MOUTH POWER
and segment the market by customer type Divide and need
Position yourself by offering a unique service Know your value proposition the courage to set yourself apart from Have the competition Never over-promise Research your competitors and your consumers Emphasise quality of service Be consistent with your communications Develop a knowledge and awareness of social media Don’t sell to consumers, help them to buy Be adaptive to the rapidly changing environment beyond the ‘Seven Ps’ of marketing to customer Look experience, and focus on giving consumers the best outcome
Build trust in your dealings: reputation is a key element
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T O-D O L
Probably the most important marketing channel for insurance brokers doesn’t involve formal communication at all: it’s all about referrals. The power of word of mouth, referrals and testimonials is something that many brokers have cottoned on to. The reason for this comes back to the ‘perceived risk’ issue about buying services, and particularly financial services. As the service can’t be evaluated before purchase – as, say a television can be – buyers have to look for other methods to reassure themselves that they are making the right choice. A strong brand, as discussed elsewhere, is a key way of doing this: ‘social validation’, seeking the views of trusted others, is another. Research also bears this out: according to a McKinsey Quarterly report, word of mouth is the primary factor for between 20% and 50% of all purchasing decisions. One way of doing this is building relationships with other professionals – financial planners, accountants, solicitors and so on – who will refer business, usually for a small fee or commission cut. The second, more prized referral method is recommendations from previous customers, who effectively act as ‘advocates’ for a business in a social situation. However, the best way to recruit a ‘brand advocate’ is to simply provide a superlative customer experience: if you do that, they’ll want to tell their friends about you. While face-to-face recommendations are still the most common form of referrals – the classic ‘chat over the barbecue’ – social media is also opening this up to a much wider audience. Think consumers using customer reviews (eg on Amazon or iTunes) prior to purchase, or by asking for peer views via social networks. Admittedly, managing the new world of two-way online conversation can be a bugbear to many marketers previously used to ‘one-way’ communication. O’Sullivan says that there is a degree of maturity coming into this aspect of marketing communications: it is increasingly being looked at as a cost of doing business. It’s a growing channel, too. According to Dear, the amount of social validation being carried out online is significant: “Selling any type of service online, and insurance broking in particular, isn’t necessarily happening on the corporate website anymore,” she argues. “It’s happening within social networks. Any firm serious about their marketing needs to work that out.” All this online and offline social validation adds up to one thing: your reputation is crucial. How do you manage that reputation? Know your value proposition; know your target market; ensure your marketing messages and brand are targeted and consistent, and recruit ‘brand advocates’ through providing value and, above all, superlative customer service. Insurance is also all about trust – a client who is helped by their broker in their time of need is likely to tell several others about how they were there for them.
EXECUTIVE SUMMARY
tom Set up cus
MAY 2012 | 25
BUSINESS STRATEGY / BRANDING
VALUE Is a strong brand really important for a small company? It turns out it could be even more essential for larger firms. Insurance Business reports
Brand has been the darling buzzword in marketing circles for years – and it doesn’t seem to be losing any traction. However, while the world of brand gurus, personal brands and evoked sets might appear faintly ridiculous, there is method to the madness – and some real benefits for services companies.
SAFETY FIRST A strong brand can act as a safety net for customers, and in an environment where the perceived risk of purchase is high, as in financial services, brands can act as a mitigator to this. According to textbook Services Marketing by K Douglas Hoffman, John EG Bateson, Greg Elliott and Dawn Birch, a strong brand makes potential customers more likely to try a particular service provider. 26 | MAY 2012
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5 STEPS TO A KILLER BRAND Neil Shewan explains how to build your brand from the ground up Creating and maintaining a strong brand is hard in itself. It is as much about “doing” as it is about “saying”. That is why so many do it poorly. Poor brands have a shallow promise. Strong brands come from a core idea people believe in. 1. WHAT ARE YOUR CLIENTS THINKING? You must get closer to your clients. Talk to them. Get someone else to talk to them. Interview them. Survey them. Understand them. Truly uncovering why your clients decided to use your services can easily get lost in the day-to-day grind. Make it your job to find out what they are thinking. It will often lead you to a core idea for your business that may have been there all along, hidden from view. 2. HAVE A CLEAR PLAN Get your business plan in order and have a clear point of difference in the market that you can defend and consistently deliver. Branding is about sending the right signals about your business to your audiences. If you don’t have a core idea that differentiates you in the market, you are on a rudderless boat. Without a core idea it is hard to know what your brand stands for. You can tell this is the case when a brand resorts to gimmicks or purely competes on cost. 3. GET TO THE MESSAGE Once you have a core idea to centre your thinking, it becomes easier to start shaping your key messages. • What does your brand stand for? • What benefit do you provide? • Is there a process that makes you unique? These are good starting points. Once you know the
“If we start with the premise that consumers do not like taking risks, then it would seem obvious that they will try, whenever possible, to reduce risk during the purchase process… Service brands perform a valuable function… they can simplify the customer’s search, evaluation and decision processes. Thus, service customers may already hold positive opinions about HSBC without ever having been a customer, largely based on its familiar name and logo.” It also means that customers are more likely to come back (and become ‘brand loyal’). “Having been satisfied in a high-risk purchase, a consumer is less likely to experiment with a different purchase,” argue the authors. “Maintaining a long-term relationship with the same service provider, in and of itself, helps reduce the perceived risk associated with the purchase.”
messages you want to communicate, you then need to be consistent and single minded in staying on brand. 4. THINK ABOUT THE ENTIRE EXPERIENCE Gone are the days when a brand was considered just a logo, or a clever catchline. You need to start thinking about every way you are signalling your brand to your clients. For a service business, brand signals can be broadly broken into visual, behavioural, physical and communication perspectives. • The visual perspective covers your visual identity – including your brandmark, visual style, typeface and colour palette. •
The behavioural perspective covers the way you interact with clients – your attitude, your turnaround times and how you handle problems.
•
The physical perspective covers anything tangible your client may interact with – including your office space, wayfinding signage and furniture.
•
The communications perspective covers the content and channels you use to interact – be they in press, online, print or in person.
Neil Shewan
Think about all the ways your clients interact with you – the application forms they use, to the chairs they sit in. Everything communicates your brand. 5. THE HARD PART Once you have a core idea and your team are behind it, then consistency becomes critical. You need to consistently reinforce your messages internally so your team can live the brand with your clients.
Insurance brokers are likely to already be aware of the power of strong brands: for example, the large insurers seem to be able to get their branding everywhere. Indeed, brokers can and do already ‘trade off’ the strength of large insurers’ brands. However, by building your own strong brand, you can shift the customer’s loyalty from the ‘big brand’ to your own business or personal brand – creating long-term repeat customers.
PREMIUM PRODUCT Brand also helps you build a competitive advantage in the marketplace. Sarah Petty and Erin Verbeck, MBAs and authors of Worth Every Penny: Build a Business That Thrills Your Customers and Still Charge What You’re Worth, argue that having a strong brand is critical to your survival. If you are ‘generic’, in many cases you’re fighting an uphill MAY 2012 | 27
®
BUSINESS STRATEGY / BRANDING
IN PRACTICE: INSURANCE BRANDING THROUGH SPORTS
©
“A brand for a company is like a reputation for a person. You earn reputation by trying to do hard things well” Jeff Bezos battle to get consumers to pay attention to you at all. “Monster companies like Apple and Coca-Cola have very deep brands. Being smaller, your brand has to be more dialled in than the brands of the bigbox stores, because one mistake can leave you unrecognisable,” says Verbeck. “We have a smaller budget, limited reach and lower frequency, so when we make a branding mistake, it can cause a lot of harm. The stakes are higher for us because we are smaller. Every misstep is a big splash in your small pond.” Petty highlights the key advantage that smaller outfits have. “Even with your limited resources, you can beat big companies at the branding game because
28 | MAY 2012
The benefits of exposing your brand through a sports team could be huge, especially in sports-mad Australia. At the top end of the scale, the world’s biggest soccer team, Manchester United, has now had consecutive insurance sponsors. Previously having their shirts emblazed with AIG, the English club now has Aon, who paid the princely sum of $120m for the four-year deal. In Australia, Zurich has sponsored the A-League's match officials, while QBE supports Perth Glory. Vero has its brand linked to the Wallabies, while the AFL has deals with various health and life insurance firms. So are the branding benefits worth it? David Prosperi, VP, Global Public Relations at Aon Corporation, has spoken of targeting the type of branding boost their rival AIG witnessed as Manchester United’s previous shirt sponsor. “The first year after AIG’s sponsorship agreement began, they came from nowhere on the list of the world’s top 100 brands to 47th,” says Prosperi. “And they jumped from 84th to 30th on Barron’s list of the most respected companies. Our objective in signing an agreement with Manchester United is to build our brand globally, and we hope we are as successful as AIG.” While the likes of Manchester United are beyond the remit of the average broker, opportunities with Australian teams, even down to the grassroots level, might be a smart way to boost brand awareness for your insurance brokerage. Plus you’ll have an excuse to make sure you are at all of their games for the season!
these power-players will never be able to offer something to their clients that you can offer – you,” she comments. “You are an integral part of your brand – the one that’s built on your passion. “As a smaller, boutique business, you have the opportunity to get that loyalty immediately – through one meaningful conversation, one unforgettable experience, or one product that a customer couldn’t possibly find anywhere else.” Getting it right can produce a snowball effect that could see your business grow rapidly. “You want your customers to be so impressed with your brand that they tell all their friends about you. You want your brand to give people a reason to do business, or even wish to do business with you in the future,” says Verbeck. “You want your brand to be so strong that people are willing to spend more money with you. You want them to do business exclusively with you, and complain that every other company isn’t as fabulous as yours. It’s about people being so excited that they talk about you and invest with you – that’s the ultimate goal.”
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BUSINESS STRATEGY / LEADERSHIP AND MANAGEMENT
WHAT MAKES US
TICK?
30 | MAY 2012
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LEADERSHIP: KEY QUALITIES
EMPATHY COMMUNICATION PROCESS & TACTICAL ORIENTATIONS LOGIC
EYE FOR DETAIL
INSPIRATION
EMOTIONAL INTELLIGENCE & SELF-AWARENESS
‘BIG PICTURE’ VISION AUTHENTICITY
Source: Deloitte Leadership Academy
Understanding yourself and your employees better can take your team to the next level. Jill Fraser reports “A good leader possesses two key attributes, the ability to set direction and the skill to drive people towards that direction, motivate and align them and ensure that the direction appeals to their hearts as well as their heads.” Their hearts? Twenty years ago, an article on leadership would have reflected the domination of boardrooms by alpha males who believed that emotions and feelings in an office environment were about as relevant as children’s storybooks and as welcome as T-shirts, and probably kicked off with something like: “A good leader recognises that business strategy is a highly rational process of eliminating variables and maximising opportunities”. Leadership in 2012 is a much more holistic concept: leadership training institutions such as
Deloitte’s Leadership Academy use the analogy of children’s stories to encourage business leaders to tap into their own stories in order to become more open, honest, transparent and real – whereas employees wearing T-shirts is now a universal sign in major corporations around the globe, showing that a relaxed dress code lifts staff morale, acknowledges individuality and potentially increases creativity and productivity. Today, as expressed in the opening quote by Deloitte’s Leadership Academy chief and founder, Tom Richardson, good leadership engages the heart as well as the intellect, and encompasses a number of key qualities. Richardson established the Deloitte Leadership Academy to expand the capabilities of leaders after recognising that ‘people, not PowerPoint’ MAY 2012 | 31
BUSINESS STRATEGY / LEADERSHIP AND MANAGEMENT
TECHNOLOGY: PROS AND CONS Leading in the future One challenge leaders at all levels of business have to adapt to is the relentless march of technology. Tom Richardson, managing partner, Deloitte Leadership Academy, says there are benefits and challenges. “How do leaders engage with their people when they’re scattered around the world? Technology!” he says. “Technology is a powerful vehicle to carry messages and establish connection – intranet, email, videos, TV channels, webinars, live feeds. The biggest trap is a leader not understanding the purpose of each technology medium.” BENEFITS: Technology is very powerful for listening and asking questions – and staff can answer and respond. Technology can prioritise. It also enables communication between people to build up a sense of community, which helps develop a sense of belonging in what could otherwise be a very difficult environment because of geographic diversity and sheer volume that
drove organisational performance. He has years of experience in the leadership stratosphere – working intimately with 15,000 of Australia’s top business leaders – and so is uniquely placed to explain why leadership is ‘a people game’. “The characteristics and capabilities of good leadership are universal across almost all industries,” he says. “But it’s become more and more important in the finance industry because of the pressure around bonuses and remuneration.
“If you don’t understand yourself you’re never going to understand others – subsequently you’re never going to be able to motivate them” John Toohey “People will only stay in an organisation if they feel connected and engaged. They’re not being paid to stay there with bonuses anymore. The need for leaders in the financial services industry to build up their people skills has become increasingly important.” Andrew Henderson, CEO of Leadership Management Australasia introduces the term “leadership charisma”. “It’s to do with connection – a connection that makes me feel that my leader is charismatic and 32 | MAY 2012
prevents you from literally walking the floors and relating to people. ore and more leaders’ messages are delivered via M video or voicemail – you can hold emotion in voicemail. Email is not so engaging. More engaging uses of technology are evolving all the time. CHALLENGES: The many options and choices, which means added complexity. Whenever you have a message to deliver it’s essential to understand the right blend of technologies versus face-to-face to ensure you’re not losing the personal touch. The complexity of all the available channels is the greatest challenge. It’s important not to rely on technology all the time. Physical face time is often key to effective communication. Source: Deloitte Leadership Academy
the only way that connection will be established is if my leader has the emotional intelligence to understand me – what motivates me, why I’m here, how I react. “Unless leaders understand and invest in their people, they will not be able to influence them because when they want to rally their team to do something the reaction will be ‘you only want us to do this because of what you will gain’,” he adds. “But, if each individual knows from experience that their boss is invested in them, listens to them (consultative leadership) and honestly cares about them they will trust the leader’s decision on behalf of the team. That’s leadership charisma,” Henderson maintains.
NEUROSCIENCE IN ACTION A high trust factor is paramount in the leader/employee equation in the insurance industry, says Professor John Toohey from the Business Psychology Discipline, Graduate School of Business and Law RMIT University, because of the nature of the business and the fact that a culture initiated and practiced at the top is mirrored down the line and will eventually shape customer relations. Toohey familiarises his graduate MBA students with neuroscience to add weight and credibility to the argument that the most effective, charismatic leaders function from their emotions. “Through neuroscience, which looks at how the brain operates, we have come to realise that
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IN THEORY: EMOTIONAL INTELLIGENCE The rules of the heart Professor Neal Ashkanasy from the University of Queensland is a world leader in the field of emotional intelligence (EI). He defines the concept as having: • the ability to perceive emotions in yourself and others • the ability to use this information in decision-making • understanding emotions and their consequences • the ability to manage emotions in yourself and in others. According to research conducted by Daniel Goleman, another of the world’s leading proponents of emotional intelligence, “the higher up the organisation you go the more important emotional intelligence becomes”. Goleman’s research suggests that emotional intelligence is twice as important as IQ and technical skills. He classifies EI as a framework of five elements: • HIGH SELF-AWARENESS – People with high emotional intelligence are usually very self-aware. They understand their emotions, and because of this, they don’t let their feelings rule them. They’re also willing to take an honest look at themselves. •
SELF-REGULATION – This is the ability to control one’s emotions and impulses. People who selfregulate typically don’t allow themselves to become too angry or jealous, and they don’t make impulsive, careless decisions.
•
MOTIVATION – People with a high degree of emotional intelligence are usually motivated. They’re willing to defer immediate results for long-term success.
•
EMPATHY – Goleman says this is perhaps the second-most important element of emotional intelligence. Empathy is the ability to identify with and understand the wants, needs, and viewpoints of those around you.
•
SOCIAL SKILLS – It’s usually easy to talk to and like people who have good social skills – another sign of high emotional intelligence. Those with strong social skills are typically team players.
CAN YOU IMPROVE YOUR EMOTIONAL INTELLIGENCE? Researchers disagree over whether you can build your
decision making is primarily emotion-based,” explains Toohey. “The emotional parts of our brain kick in long before the rational parts. The rational parts follow and try to make sense and contextualise.” “A lot of men in business are afraid of that component, and don’t want to know about it. The executive education I’ve done in this area is fascinating: people have quite bemused smiles when I first tell them this but as they dig into it and I show them the research they begin to look more bewildered than amused.” Toohey contends that an area of critical importance in business education is the nature of
‘innate’ level of EI. However, it’s generally acknowledged that you can train to be better at EI, like any other skills. Corporate psychology firm Mindtools suggests carrying out the following exercises: • OBSERVE HOW YOU REACT TO PEOPLE. Do you rush to judgment before you know all of the facts? Do you stereotype? Look honestly at how you think and interact with other people. •
LOOK AT YOUR WORK ENVIRONMENT. Do you seek attention for your accomplishments? Humility can be a wonderful quality, and it doesn’t mean that you’re shy or lack self-confidence. When you practise humility, you say that you know what you did, and you can be quietly confident about it. Give others a chance to shine.
•
DO A SELF-EVALUATION. What are your weaknesses? Are you willing to accept that you’re not perfect and that you could work on some areas to make yourself a better person? Have the courage to look at yourself honestly – it can change your life.
•
EXAMINE HOW YOU REACT TO STRESSFUL SITUATIONS. Do you become upset every time there is a delay or something doesn’t happen the way you want? Do you blame others or become angry at them, even when it’s not their fault? The ability to stay calm and in control in difficult situations is highly valued – in the business world and outside it. Keep your emotions under control when things go wrong.
•
TAKE RESPONSIBILITY FOR YOUR ACTIONS. If you hurt someone’s feelings, apologise directly – don’t ignore what you did or avoid the person. People are usually more willing to forgive and forget if you make an honest attempt to make things right.
•
EXAMINE HOW YOUR ACTIONS WILL AFFECT OTHERS - BEFORE YOU TAKE THOSE ACTIONS. If your decision will impact others, it is important to put yourself in their place. How will they feel if you do this? Would you want that experience to happen to you? If you must take the action, how can you help others deal with the effects?
beliefs and biases. He teaches that the brain is highly plastic/durable. Beliefs belong to the irrational/emotional world, and a strongly-held belief can change the neural pathways of the brain (thus the plasticity). “Leaders usually don’t understand this and therefore don’t get the impact,” he says. The significance of all this, he says, is to highlight the relevance of self-awareness (what we believe, why and how we behave, and why) in what he refers to as “the psychology of strategy” for leaders to “inspire people to act in predictable ways”. “I challenge managers and executive MBA students because usually they are very good MAY 2012 | 33
BUSINESS STRATEGY / LEADERSHIP AND MANAGEMENT
LEADERS ON LEADING
Cameron Clyne
Leading in public
Leading in insurance
CAMERON CLYNE, CEO, NAB An important aspect of leadership is demonstrating the desire and ability to provide explanations and answer questions. Australians give people a go – they appreciate people fronting an issue and making themselves available to explain decisions. NAB CEO Cameron Clyne has recently started regular spots on 3AW’s Neil Mitchell talk-back radio program. These programs give people an opportunity to hear directly from a bank CEO on what decisions have been made and why. There are people in the community who don’t understand how banks make decisions. Clyne believes that customers are at the heart of decision-making and whatever decisions are made, they must be explained to customers, potential customers and the general public. NAB also wants to show that it takes its responsibility – both as an employer of 45,000 people worldwide, and as a top five company with millions of Australian customers – very seriously. Clyne believes it is important to have the leadership to show staff that the conversations bankers are having with customers are the same conversations he is having publicly. Customers are asking NAB bankers difficult questions about interest rates, cost of funds, policies and procedures. These are the same questions that Clyne is being asked on radio and is happy to provide the answers to explain the bank’s actions.
MATTHEW BOON, MANAGING DIRECTOR, WINSURE INSURANCE GROUP “Before you look at leadership you need the right people onboard, in the right roles, and ensure they are well trained,” says Boon. “I then look upon leadership as being from a macro-basis. You have to empower people – train them, educate them and, more importantly, you have to give them a support structure too. Whether that be via myself or via another mechanism within the business.” Boon says leading a business within insurance compared with other businesses is different as it is continually changing. “All businesses are affected by the economy, obviously, but in insurance we are highly regulated too,” says Boon. “That is not necessarily a bad thing, but it is something you have to keep on top of and make sure your staff are up-to-date with any changes too.” Boon says good leaders in insurance are consistently reviewing how they approach business, both in terms of distribution and underwriting, so all stakeholders achieve the desired result. “When it comes to dealing with staff, they need to feel they have access to management. It is easier in a company my size [Winsure have 13 staff], than it would be in a multinational company where there are many more tiers of management, which there obviously needs to be for a larger firm,” says Boon. “For us though, it is very much about everyone working together and developing the business together. You want your staff to raise issues as quickly as possible so we can address those aspects. Whether it is an opportunity or something negative, you need to be on top of it,” he adds.
Effective communication... it’s about understanding individuals, as opposed to seeing them through your own lens
LEADER, KNOW THYSELF
awareness is a crucial element of leadership training. Post-GFC, due to external market forces and related circumstances that prompted change, leaders with higher ‘emotional intelligence’ (selfawareness being a critical component of emotional intelligence) have emerged at the forefront, reveal White and Bourke. Successful leaders during the GFC ensured that communication with staff was increased 10fold, often spending at least 30% of their time with their teams, says White. “Whenever we experience a crisis, it’s an opportunity to reflect and minimise certain notes and amplify others, one of which has been becoming more inclusive,” adds Bourke. A trend towards increased inclusivity and collaboration are by-products of a growing prominence in leadership 2012 prototypes on emotional intelligence and communication.
Jason White and Juliet Bourke, human capital partners at Deloitte, who are in the business of creating “extraordinary leaders”, agree that self-
Lee Iacocca, former CEO, Chrysler Corporation,
at identifying biases in others, and very poor at identifying them in themselves,” adds Toohey. “I tell them, ‘if you don’t understand yourself go and grow cabbages or do some other solo job’. “Don’t pretend that you can go into a business and take a leadership role because you’ll only make a mess of it. If you don’t understand yourself you’re never going to understand others, you’re never going to be able to motivate them.”
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COMMUNICATION
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EXECUTIVE SUMMARY isn’t just about marshalling the intellectual Leadership resources of your workforce: it’s about engaging their emotions too. of good leaders include empathy, logic, ability Qualities to inspire, authenticity, an eye for detail and a ‘big picture’ vision, process and tactical orientations and emotional intelligence. a connection with your employees and Making stakeholders and understanding them is key to being able to rally a team.
Neuroscience shows that harnessing emotions can be much stronger than the rational side of the brain, as this kicks in earlier and creates stronger neural pathways.
yourself is key to being able to motivate Knowing others – and emotional intelligence is key to self-awareness.
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T O-D O L
once said, “You can have brilliant ideas, but if you can’t get them across, your ideas won’t get you anywhere.” Nido Qubein – businessman, motivational speaker, President of High Point University in North Carolina since 2005 and master of communication skills – says that the most common mistake made by leaders is “confusing the art of communication with the science of connecting”. “Effective communication is not merely the transference of knowledge, data or information. The heart and soul of effective communication relates to the ability to build a bridge of understanding. That means to connect with them,” he says. “Something amazing happens when someone believes that the person communicating with them knows his or her fears, goals, aspirations and needs. Qubein adds that when leaders really connect they use language that their people relate to, speak from their perspective and address issues they find important. The moment they do that the value of what they’re saying is heard in a modality in which people can relate and recognise the benefit to them. “When this happens both the art and the science have been employed and communication has, as we say, clicked.” Deloitte’s Jason White and Juliet Bourke sum it up. “We all know the ability to drive performance, be financially astute and commercial and deal with operating issues,” says Richardson. “Possessing the emotional intellect to understand where your workforce’s mindset is at, what’s driving their motivation and be a real person with them and build engagement has been proven to be crucial in retaining top talent.” Bourke says that it’s about understanding individuals, as opposed to seeing them through your own lens. “The ASX’s focus on diversity skills is causing leaders to sit back and question whether they are actually seeing the person in front of them, or simply making assumptions based on stereotypes,” she says. “Seeing the person accurately is about seeing their strengths, how they sit with other team members, their career orientation, and creating an environment in which you can pull together the best of everyone in order to create a high performing group in which everyone can excel.”
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FEATURE / HUMAN RESOURCES
THE
PEOPLE FACTOR Growing your business invariably involves one thing: staff. How can you attract the best employees – and keep them interested?
HIRING Recruiting is often the first major task that a growing company has to confront, and getting it right can be a daunting task. Coming back to your core business strategy and working out your skills needs is the essential first step. You need to sit down and think about the role they want the employee to fill, according to Advice Centre Consulting’s David Fox. “The most important thing, and something that is really not done well, is to get clarity around what the role is,” he states. “It’s not only the tasks involved in the role, but also what the role needs to achieve and what the measurements of success are.” That could be as simple as deciding whether you need an insurance salesperson or an administrator; however, it’s better to be specific. Fox argues that rather than employing someone to do ‘10 different tasks’, you should also bear in mind the future development of any role too. Randstad HR director Tiffany Quinlan argues that thinking strategically about hires in context of your own strengths and weaknesses is a wise move. “You need to be self-aware about where you’re lacking,” she says. “A new hire should complement you, not do what you already do – hiring clones doesn’t really work.” Quinlan suggests that hiring someone with a different sales approach can open up new markets and client sectors, for example. “You also need to think about what a new hire can offer you in terms of growing your business,” she adds. “Small businesses often don’t think about
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PERSONALITY TESTS DECODED There are a wide range of psychometric tests out there which aim to measure intelligence, aptitude and personality; here are some of the most popular and well-established • THE MYERS-BRIGGS TYPE INDICATOR (MBTI) is designed to measure psychological preferences in how people perceive the world and make decisions. This 16-type indicator test is based on Carl Jung’s Psychological Types. • THE 16PF QUESTIONNAIRE (16PF) was developed by Raymond Cattell and colleagues in the 1940s and 1950s in a search to try to discover the basic traits of human personality using scientific methodology. The test was first published in 1949, and is now in its fifth edition. • THE NEWCASTLE PERSONALITY ASSESSOR (NPA), created by Daniel Nettle, is a short questionnaire designed
what they can learn from people they employ. If you can get someone with a different skill set, a different background, they can add to your business.” Skills might pay the bills – but it’s not the only thing you should worry about. Personality goes a long way too. “You also need to make sure that the personality mix is correct. That’s essential for a smaller organisation, where you’re so closely aligned.” Quinlan recommends carrying out psychometric or personality testing. “A personality profile typically shows what an interviewee’s default behaviour is likely to be. That’s the stuff you need to know; that’s what people revert back to when they’re put under pressure. Insurance broking can be a high-stress environment; you want to make sure that what you’re seeing is what you’re getting, and it’s actually more important in a small organisation than a big.” Finding a personality profile is easy: Google is your friend here. However, you should make sure you’ve got the right kind of test for the role – if you’re hiring a insurance salesperson choose a test tailored for sales profiles, for example. It may even be worth carrying out one yourself, adds Quinlan. Finally, you should prepare yourself not to find the perfect match. “One of the key things we say to businesses is that you’ve got to work out your ‘must-haves’ and your ‘desirables,” says Quinlan “You’ll never find the perfect candidate, but you can list the essential experience and/or skills. You have to be clear, in your mind what you need and what you can train.”
to quantify personality on five dimensions: Extraversion, Neuroticism, Conscientious, Agreeableness, and Openness. Many personality tests have been based on these ‘Big Five’ traits. • THE DISC assessment identifies four personality types: Dominance; Influence; Steadiness and Conscientiousness. It is used widely in corporates. • THE BELBIN TEAM INVENTORY is classed as a ‘personality test’, although its inventor, Meredith Belbin, argues that it’s not designed to assess personality. Instead, it measures preference for one (or more) out of nine team roles: Plant, Resource Investigator, Co-ordinator, Shaper, Monitor Evaluator, Teamworker, Implementer, Completer Finisher, and/or Specialist.
Finally, don’t ignore what’s right under your nose, especially if you already employ people. “Pay attention to people you have: push them, give them opportunity, and give feedback,” says Jim Sharpe, Senior Lecturer at Harvard Business School’s Entrepreneurial Management Unit. “Keep a list of contacts you meet that might fit in your organisation: you are the company’s greatest recruiter. You will make mistakes, so move quickly to let a new hire go if it is not working.”
IN PRACTICE
Global Transport & Automotive Insurance (GT) is an underwriting agency focused on the Australian transport industry market. Previously named Global Motor Underwriting Agency before Allianz acquired more than 50% equity in the company in 2006, they have offices in Sydney, Brisbane, Townsville, Melbourne, Tasmania, Adelaide, Darwin and Perth, with nearly 100 staff across their various outposts. Greg Walsh, manager of corporate services at Global Transport & Automotive Insurance, who oversees HR at the firm, says that insurance recruitment can often be a case of internal referrals. “With the insurance space, there are only a certain number of insurers around and once you have been in it for a while, you get to know who is working within the space,” says Walsh. “A lot of the people we have at GT have worked with some of the larger insurers around and a lot of the people we have recruited have come directed from those larger players, like Suncorp or Allianz.” Walsh says GT tries to avoid working with external recruiters as much as possible to dodge the costs that are incurred through that process. They do so by playing off the insurance market’s inner circle of recommendations from current employees and who they know is available to potentially join the firm.
MAY 2012 I 37
BUSINESS STRATEGY / HUMAN RESOURCES
“While it’s important to get the skills right you also need to make sure that the personality mix is correct” Tiffany Quinlan
CAREER PROGRESSION One particular bugbear for smaller firms is how to provide employees with opportunities for career progression. Unlike large firms, the scope for internal promotion can be more limited, with role expansion reliant on company growth or employees “making a role their own”. The latter can be risky, especially if an employee wants to develop their job in a direction that may not be in line with your strategic aims. Fox recommends sketching out scope for development within the role as part of the initial creation of the job description, as well as employing someone who is able to move into a more senior position. Quinlan suggests sitting down with your employee and finding out their goals for the year can be a good way of providing career development. “Maybe it’s an investment in learning; maybe it’s something else. Maybe it’s moving into another role, and shadowing someone else for a week,” she says. “It’s a bit of a fallacy to ‘promote’ people by giving them a flash title but never change their job – that actually becomes a bigger demotivator,” adds Quinlan. “You should make a commitment to learning and development, but with an understanding of what you can control – and accept that you are going to lose people at a certain point.”
IN PRACTICE
An issue many smaller businesses face is a ‘brain drain’ to the larger players in the market. This might seem a particularly probable threat for insurance brokers and smaller underwriters who come into close contact with larger insurance players on a regular basis. “I’m not overly concerned by that,” says Greg Walsh from GT. “What we have going for us is that we are a small, young company, so we are not a large bureaucratic insurer. That is what attracted me to join the firm, because when you want to do something, you can just do it. “We may be small, but we are growing and we have a good culture where you very quickly get to know everyone in the office,” says Walsh. “Everyone is willing to chip in and help to make the company successful, these are the type of aspects which enable you to retain staff. That small company enthusiasm means that I am never concerned about us losing people to the big insurers, it often works the other way round and we can attract staff from the bigger firms.”
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INCENTIVES Staff incentives – financial and non-financial – are a common feature of most employee packages. While the effectiveness of financial incentives is the subject of fierce debate in academic circles, commissions are well entrenched as the backbone of insurance broker remuneration. However, while a simple commission split might be ample motivation for your employees, keeping non-sales staff engaged can be tricky. While few insurance businesses are in the position to issue Silicon Valley-style equity share schemes to staff, other incentive plans are rife. “In non-sales staff, the challenge you have is that they’re working just as hard as the sales guys, and seeing them getting the big rewards,” says Quinlan. “Partly, it’s an education job: you need to teach your workforce that sales is a high risk environment: if you don’t work hard they don’t get anything.” Team or company incentives can be a useful way for non-sales staff to share in company success, whether paid annually or quarterly. You can also run individual award schemes – ‘administrator of the month’ awards, for example. “Obviously, if you only employ one administrator, you wouldn’t run an individual award scheme, but you can still acknowledge the role that person has played,” says Quinlan. Non-financial incentives can be a powerful tool for sales and non-sales staff alike, she adds. “The modern workforce is looking for flexibility and recognition. We empower our managers throughout the organisation to have the power to give employees time off if they’ve outperformed. They’re high-performing individuals who will make that time up anyway.” Loyalty leave, birthday and anniversary leave are all other low-cost incentive options that Quinlan suggests – but in her view there’s nothing better than the spontaneous day off for rewarding excellent performance. Jim Sharpe, Senior Lecturer at Harvard Business School’s Entrepreneurial Management Unit, agrees that spontaneity goes a long way. “Find opportunities to celebrate and recognise employees in a spontaneous way; food always works well, even better when food is shared with everyone pitching in,” he says. “Money seldom is the primary motivator for people, but being thanked and appreciated goes a long way. Single out great examples, spread the praise and do it at all levels.”
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EXECUTIVE SUMMARY
SAYING GOODBYE Eventually, there will come a point where employees move on – whether to move to another job or set up their own business. Ideally, you’ll have some sense of if and when this is likely to happen, if you’re regularly discussing career development with your staff – but more often than not it will come out of the blue. Therefore, you should make sure that you have a plan in place if a staff member leaves – whether that’s recruiting a successor, an internal promotion or just reallocating duties. Of course, there will also be situations where an employee is let go – whether that’s being fired or redundancy. Regardless of the reasons, it’s essential to treat everyone equally. “You have to park your emotional issues and make sure that person leaves with dignity,” she says. “They’ll tell 10 people if they’ve had a good ‘leaving experience’ – and 25 if they’ve had a bad one. It’s important to send a message to other employees that they will be treated with dignity if they leave.” Whether it’s an email or goodbye drinks, make sure the departure process is the same. Why all the fuss over graciousness? Well, it’s because the ‘boomerang effect’ is powerful. “We have a Boomerang Club here at Randstad – those people who left, went elsewhere then came back,” laughs Quinlan. “Those leavers can return, months and years later – and can be valuable.”
so you can take in talent if you find it. sketch out roles prior to interviewing Thoroughly – particularly what it needs to achieve and how that will be measured. just hire skills or knowledge – personality fit is Don’t essential, especially in a small company environment. Psychometric testing can be useful. sure that sales and non-sales staff are being Make incentivised appropriately – including non-financial incentives. Good incentives for support staff are company/team bonuses. appraisals are essential to ongoing Regular progression: you can ascertain staff ambitions and how they fit into your strategy. be afraid of people leaving – it’s a natural part of Don’t business life. Make sure you can deal with staff departure in the short term, as well as having a longer-term succession plan.
IST
So what should you be looking for when recruiting staff? Many would quickly cite qualifications and experience, and while they are important aspects, you need to ensure you appoint a member of staff that fits into your company ethos and will look to drive the business forward long-term. Greg Walsh from Global Transport & Automotive Insurance says that when it comes to his HR recruitment philosophy, potential staff need to have the technical skills, but more importantly have the right attitude. “We want someone with that enthusiastic outlook,” says Walsh. “Even if that person hasn’t got quite the experience yet, if they have the right attitude, and are keen, that to me is an excellent piece of recruitment. They will develop that experience over time.” Walsh said that companies also need experienced people, but that should not be the sole recruitment criteria. “If there are some doubts over someone’s motivation, then their level of experience doesn’t really matter,” added Walsh.
practice is to plan your recruiting in line with your Best business strategy – but it’s worth maintaining flexibility
T O-D O L
IN PRACTICE
F: s EW STAF HIRING N re my skills need a t a Wh e next year? for th ption job desvecsrias appropriate t u o m? e t i r ti n fill the a W rk out salary/incen c o h w e – wo anyon or advertise y know d a e r l an agency a e I s u Do ot, decide whether to tests – if n chometric y s p h c r a ork and e p paperw Res ess c o r ces, set u p n re g fe n re i to check ck hir Che up-to-date? Make sure it is n – aff? so o riting, and or new st f g n offer in w i h t y to get a,n ing etc? Do I need ters train
u sks, comp – more de
gets STAFF goals/tar G t e s IN , T s l IS a X s i E pra t into strategy? ry out ap y fi Card out their aims. Do the ures – fin ive struct t n e c n i t ck curren Chethey need tweaking? procedure g – do n i v a e l e ploye lace? Check em in p
ne d to put o – do I nee
BUSINESS STRATEGY / IT
40 | MAY 2012
INSURANCEBUSINESSONLINE.COM.AU
WHAT DO YOU NEED?
Source: Loanworks
What are the typical IT needs of the average mid-size brokerage?
MOBILE SOLUTIONS
CLAIMS
SALES ANALYSIS AND BUSINESS INTELLIGENCE TOOLS
MARKETING AND CRM TOOLS
ELECTRONIC LODGEMENT
PRODUCT SELECTION
FURTHER REQUIREMENTS
DEAL-CENTRIC AND CUSTOMERCENTRIC VIEWS OF DATA
COMPLIANCE, ESPECIALLY CUSTOMER NEEDS CAPTURE
DOCUMENT GENERATION, STORAGE OF SUPPORTING DOCUMENTATION
TRACKING/WORKFLOW ACROSS MULTIPLE USERS, TYPICALLY WITH AUTOMATIC EMAIL/SMS ALERTS
CORE REQUIREMENTS
You may be able to survive as a ‘man with a laptop’ for a while, but eventually you’ll need to consider an IT infrastructure. What are the pros and cons?
Technology is everywhere. Just look around at your local café – chances are you’ll see people checking emails on their smartphones, displaying presentations on iPads and diligently working away on laptops while wired into the office network. The changing face of technology is the defining social trend of the early 21st century, which is why it’s essential that businesses have some kind of information systems strategy in place, especially if you have plans to expand. But how can you do this when the sands are constantly shifting beneath you?
NEEDS ASSESSMENT Like any other aspect of business strategy, IT strategy must be firmly linked back to your goals and targets within your core strategy and your operational needs. What will you need in order to be able to fulfil your goals? So, if you want to make more of your existing customer base and follow up leads more effectively, do you need a better customer relation-
ship management system? If you’re looking to free up time currently being absorbed by keeping up with new compliance rules, do you need a better claims tracking and document retention system? If you’re aiming to open a shopfront, do you need to procure computers for new employees and associated software? Barrie Gaubert from Iden Group recommends thinking a few years ahead before splashing around any cash. “Think about a two- to three-year timeframe of what you’re looking to deliver,” he says. “So, for example, when we bought a server it was with a threeyear horizon in mind. But we also ensured it was updatable, expandable, relocatable and could be linked to another server. You need to have positive forethought as to what your needs could be – particularly if growth occurs faster than you expect.” Before parting with your hard-earned cash, it may also be worth carrying out a post-mortem on your existing systems. Providing broker-specific software solutions is a key plank of aggregators’ and
THE CLOUD The delivery of resources, software and information to computers and other devices over a network rather than being installed on a device.
MAY 2012 I 41
BUSINESS STRATEGY / IT
CHOICES, CHOICES... The IT world is swirling with many different options for buyers – what are the pros and cons for each?
CLOUD-BASED SYSTEMS PROS
BUILD YOUR OWN SYSTEM PROS • •
You can design a system to your specification It’s your intellectual property – you have complete control
• •
CONS • • • •
•
Time, cost and resource – if it is better spent elsewhere What are the compliance requirements? Will require maintenance and ongoing development Industry-specific products will have benefited from the collective input of many different customers – is it worth reinventing the wheel? What support provision will you have?
Pay as you go – you can save on overheads such as servers, internet connections, maintenance, back-ups Access wherever you are, and access for smartphones and tablets – you can check the status of a deal while on the phone to the client or in their living room. This is likely to put you ahead of the curve in the insurance broker space CONS
• • •
Reliant on web connections – may not be feasible in some locations Offshore storage may present data protection issues If seeking cloud just for archival, a terabyte external hard drive may be just as cost effective and more secure
have a mixture of direct accreditations and an aggregated portfolio, or if you’ve diversified beyond home loans.” A further consideration is the saleability of your business – a potential purchaser will want to see customer data with appropriate business processes and systems in place. Reliance on aggregator systems may again be insufficient. “It may be the case that a hybrid solution is your ‘line of best fit’,” adds Macartney. “For example, you might use the tools supplied by your aggregator for product information while leveraging third-party software for your other requirements.” franchises’ sales pitches to brokers: are you sure you’re making the most of what you’ve already got? Deakin university information systems lecturer Marie-Louise Van Der Klooster says the likelihood is that many people aren’t. “It’s quite often the case that professionals pay for a package of software, but don’t use it to their full benefit – whether that’s because they’re using them inefficiently or it hasn’t been set up properly.” Relying on aggregator solutions brings its own set of issues – particularly for the ambitious broker, says Wayne Macartney, national sales manager at software provider LoanWorks. The most obvious impact of relying on aggregator solutions is the potential impact on your business if you decide to change aggregators. Independence from an aggregator may become more critical as a business grows. “If the company has grown to several brokers with support staff then your software needs will have changed,” adds Macartney. “For example, you 42 | MAY 2012
PROCUREMENT Your brand new IT strategy says that you need to upgrade your systems – but how do you go about finding the right solutions and/or providers? Macartney says there are a number of factors that should be considered – not least of which is cost. “Risk, compliance, flexibility and scalability are all factors to consider,” he says. “There’s a growing trend to consider the ‘total cost of ownership’ including the implementation, integration and ongoing costs. Do not underestimate the overhead of vendor management – choose a solution from a supplier who you feel you can work with in the longer term – and consider the impact of ‘vendor lock-in’ – being unable to switch to another product due to high switching costs.” Macartney warns that you shouldn’t expect to find a “one-size-fits-all” solution – and that you shouldn’t expect a software or hardware solution to instantly transform your business.
INSURANCEBUSINESSONLINE.COM.AU
REMOTE WORKING The advent of smartphones and tablet computing has the potential to revolutionise insurance broking, particularly in a customer-facing situation. Many businesses have already grasped this fact: Clive Kirkpatrick at St.George says the bank’s research suggests that 30% of its brokers are already using iPads to access the bank’s resources and expects that share to grow substantially. As a result, it’s launched a dedicated iPad app for brokers. “You can carry all the material that used to be paper on one device, and you can be sure they’re up-to-date,” says Kirkpatrick. Indeed, rather than being a replacement for traditional computers, mobile devices are taking the place of traditional paper material. “In a couple of years, the broker briefcase could be just a tablet computer. You’ll have the ability to share information in a number of ways, download forms, get customers to sign forms online and scan customer documents and submit that information to your own system or to lenders.” Access to a web connection is necessary for a number of tools though, and saving documents to devices isn’t always possible at present. You should have clear policies on usage, device security and download – including creating an ‘approved app’ list. Over the coming few years you can expect the insurers to do the same and brokers should be asking what their insurers’ mobile plans are now.
ZURICH’S CLOUD PLANS Insurance giant Zurich recently outlined a focus on analytics, mobile services, cloud computing and APIs in order to boost customer loyalty. Speaking at a FST conference, Zurich enterprise architect Sid Sanyal urged his peers in the insurance industry to “become customer-driven” by focusing on “customer experience management” instead of customer relationship management (CRM). He called for insurance advisors to share experiences with their customers across social media and other channels and interact in ways that were “not just revenue-driven”. For Zurich, Sanyal says the technology would provide insights into customer behaviour to identify the right communication channels, products, advisors or actions for particular customers. Sanyal highlighted an Accenture survey that found 26% of customers shopped around for insurance deals rather than being loyal to existing providers. Some 75% of customers believed there was “no significant difference in the products and services offered by insurance companies”, he says, warning that for insurers, winning new customers cost “an order of magnitude” more than retaining them. “The real challenge is that customers are becoming better informed,” says Sanyal. “There are new modes of communication, [a demand for] customised products, new technologies and a personal connection. Don’t ignore the customer’s growing sphere of influence.”
MAY 2012 I 43
BUSINESS STRATEGY / IT
EXECUTIVE SUMMARY your business grows, you’re likely to butt up against As a need for greater IT provision. This should be anchored firmly to your core business strategy your current and future needs, as well as Consider ambitions for the business – eg more employees, future exit plans sure you’re making the most of your existing Make IT services factors such as risk, compliance, flexibility and Consider scalability – and investigate the pros and cons of innovations such as the mobile web and the cloud
Make sure you have policies in place in relation to IT use Make sure any software solutions aren’t too advanced, and expensive for your needs Software is a tool, not a magic bullet to transform your business
44 | MAY 2012
IT ategy for siness str
iew bu Rev eeds IST
ns/n implicatio
T O-D O L
“Software is not a magic bullet – your business success will not be based on a piece of software,” he says. “We see this continuously – one customer will leverage software as a business enabler, yet another customer will struggle to get value from it.” Where IT will give you a competitive advantage, says Macartney, is if you use it to increase the efficiency and effectiveness of your business – and this means that you need to invest the time and effort in configuring it to do what you need it to do. “Therefore, software should be flexible and configurable so that it fits your business requirements – you should not have to shoehorn your business into a proscriptive system,” he says. “You should also be able to tap into a vendor’s expertise and experience to make sure that you’re leveraging the inherent value of the software.” Gauden agrees that off-the-shelf solutions should be customisable to your needs, and argues that you should look for standard infrastructure. “So, for example, if I’m buying a CRM, I don’t want one that uses a proprietary database – I want something using a language like SQL,” he says. That also means that it’s easier to avoid vendor lock-in, because you can export data in a way that other solutions can understand. Ultimately, Van Der Kloosters warns that you should be focused on what your needs are, however – and don’t be dazzled by all the knobs, bells and whistles. Quite often, she says, business people are guilty of procuring a solution that’s far too advanced for their needs – as well as far too expensive.
rs’ time?
three yea l I need in l i w t a h ing W ware train about soft M D B l urce Cal d, open so bout clou a t u o d Fin p again nd back u back up a p u k c ster Ba rite a disa olicies & w p IT k Chec
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INSURANCEBUSINESSONLINE.COM.AU
MAY 2012 I 45
BROKER FOCUS / SEAN BEMROSE
BROKER
FOCUS
Sean Bemrose, director at Queensland-based Tony Bemrose Insurance Brokers, on a challenging 12 months for brokers, specialising in Asian restaurants, and racing cars Q: What makes a good insurance broker? A: One that is able to interact with a wide diversity of people and generally be empathetic with the sufficient knowledge base to actually assist a client’s business.
Q: What’s the best thing about working in insurance? A: It is a wonderful opportunity to play a part in a professional sense with a number of different businesses, which entails dealing with different types of people in many different occupations. Insurance is a people-focused occupation and there is a sense of achievement and satisfaction that when a client does have a claim you can use your knowledge to make sure they get the best possible outcome. The insurance industry itself is a particularly engaging industry to be part of with many different personalities working together, but there is also such a community feeling. I’m the vice-president of The Council of Queensland Insurance Brokers (CQIB), which has been established longer than NIBA, and we are a group of like-minded brokers that, although we are in competition, we share our knowledge. There is a very strong sense of fraternity. 46 | MAY 2012
Q: And that sense of community must have drawn the group even closer in recent times, considering the natural disasters that have hit Queensland? A: Absolutely, it solidified the general camaraderie we have. The CQIB organised a forum just after the floods so our members could share their views and challenges.
Q: What has been the biggest challenge in the insurance broker space over the last 12 months? A: Certainly the catastrophes, although the floods occurred last year, the ramifications lasted 12 months. We were still finalising claims in February this year where there were difficulties. That made 2011 very challenging, but part of the role of the broker is to support the businesses you insure whether they had flood insurance or not. This has occurred with the GFC hitting the SME space, which has hit sales, plus the overall increase in premiums has meant a double whammy for clients.
Q: What lies ahead for insurance brokers over the coming 12 months? A: We will continue to see a hardening of the insurance market where prices will keep going
INSURANCEBUSINESSONLINE.COM.AU
WHEN YOU’RE NOT BROKING… • I RACE CARS! I DO TIME TRIALS AT THE LOCAL RACING TRACKS
I ALSO PLAY GOLF
ENJOY TRAVELLING
SCUBA DIVING
AND SPENDING TIME WITH MY YOUNG FAMILY
up, particularly in commercial property. There will be some specific challenges in some areas of Australia, where in Far North Queensland the underwriting capacity has all but dried up. That puts brokers in a difficult position as you do not want a client who you cannot get insurance for, as you need to at least get a price for them.
Q: What’s your top tip for a new insurance broker? A: Learn as much as you can about insurance policies. Certainly get a grasp on contract law and policy interpretation. Brokers are going to be involved in claims management, so they need to be sharp in this area. You also need to be proactive with the client and seek to gain as much knowledge about the client’s business as you can.
Q: What do you cite as the chief advantages for clients of working through a broker like yourselves rather than dealing directly with perhaps one of the larger insurers? A: Clients get a personalised service with industry professionals who have been working in insurance as brokers for several years. We have seen the benefits of us having strong relationships with a number
of insurers and also having direct relationships with claims departments. We can offer an unbiased opinion on various insurance policies – we are an insurance management service, rather than just a price comparison service.
Q: You offer an Asian Restaurant Owner package – how is that working for you? A: Very well; we have been fortunate to have an Asian division with a broker of Chinese descent working for us and due to our location in Fortitude Valley near China Town we have built up a significant portfolio of restaurants. The Asian package was designed to reach some additional needs which these restaurants might have, such as livestock on the premises. Policies work well provided you have a well-worded base policy to build on.
Q: That might strike people as a particularly narrow niche, but does insurance broker innovation stem from providing focus on areas others don’t think to cover? A: Absolutely. I lived in Japan for a few years in the mid-1990s and living in a country where you don’t speak the language, trying to manage your insurance can be enormously difficult. You need someone to be your voice and to explain the insurance policy. MAY 2012 | 47
COLUMN / BUSINESS RESOURCES
ASSISTANCE
REQUIRED
In need of a little help? Here’s a roundup of some useful business resources GOVERNMENT HELP
THE LAW
With 620 business schemes across Australia – albeit many targeted to specific industries or segments of the community – there’s scope for businesses to obtain some assistance. A full list of grants can be found at business.gov. au/grantfinder
You don’t have to employ expensive lawyers to cover off every aspect of business law: a wealth of information is available online.
STRATEGY HELP Don’t want to shell out for a business coach? Government agency Enterprise Connect offers a free top-to-bottom analysis of your business, carried out on-site. The scheme aims to highlight: strengths and weaknesses of your business; strategic issues; potential areas for business improvement; and potential areas for growth. Further information: enterpriseconnect.gov.au EMPLOYING PEOPLE Training and development grants are common: the most well-known is the Australian Apprenticeships scheme, which offers a range of incentives depending on various factors. The Experience+ scheme also offers financial incentives and assistance for employing ‘mature’ (45 and over) workers. Further information: australianapprenticeships.gov.au; deewr.gov.au/employment/programs/expplus
INSURANCE LAW The Australian Insurance Law Association (AILA) provides a forum for the promotion, review, development and debate of insurance law. AILA maintains an ongoing liaison with the broking fraternities by having AILA industry liaison representatives acting as ambassadors. Further information: aila.com.au EMPLOYING PEOPLE The government’s business hub, business.gov.au, contains an excellent section on the law and practice of employment. It also includes information about a number of other aspects of doing business. Proforma job offers, contracts and policies are also widely available online. Further information: business.gov.au TAXES The Australian Taxation Office’s business page contains a range of up-to-date information about your taxation obligations. Further information: ato.gov.au/businesses
INDUSTRY RESOURCES Various industry players also provide a wide range of assistance for brokers – some free, some not. INDUSTRY BODIES The Insurance Council of Australia is the representative body of the general insurance industry. Its members represent more than 90% of total premium income written by private sector general insurers. There is also the Financial Services Council and the Australian and New Zealand Institute of Insurance and Finance. Further information: insurancecouncil.com.au; ifsa.com.au; theinstitute.com.au BROKER VOICE NIBA is the national trade association for licensed life and general insurance brokers in Australia. It is a not-for-profit organisation and neither sells insurance products nor
48 | MAY 2012
represents insurance companies. NIBA is the national voice of insurance brokers and an advocate for insurance consumers. Their website provides information for consumers, insurance and risk professionals throughout the industry and NIBA members. There are also broker groups for specific states who you can contact directly. Further information: niba.com.au CLUSTER GROUPS/NETWORKS While there are various options, Steadfast and Ausbrokers are Australia’s leading networks for brokers looking for the increased support and power that comes with being part of a bigger machine. Steadfast has more than 280 insurance brokerages around Australia, while Ausbrokers claim to have a total turnover of over $1.2bn in general insurance premiums. Further information: steadfast.com.au; austbrokers.com.au
INSURANCEBUSINESSONLINE.COM.AU
MAY 2012 LAUNCH ISSUE | 49