Brokers: A force for good

BROKERS: A FORCE FOR GOOD

Insurance broking clients are acutely aware of the benefits their risk adviser provides, which is why so many clients return to their brokers year after year.

BY DALLAS BOOTH

Chief Executive Officer, National Insurance Brokers Association

Insurance brokers are able to explain in detail the value they provide to their clients, but what about the value brokers provide to others? In particular, the important service brokers provide to government and broader society.

As part of their core offering, brokers help their clients select the most appropriate risk-management solution, provide support during the claims process and assist with risk management. By providing these services brokers can help businesses to recover from incidents quicker and/or avoid them in the first place, supporting local economies and communities to recover.

Brokers also play a key role in finding appropriate insurance for difficult-to-insure risks, particularly in markets where there is limited access to insurance products. Policyholders in many parts of Australia have likely already felt the effects of the hardening insurance market, with some risks becoming increasingly difficult to place.

Where risks cannot be placed with insurers, government and the broader society act as ‘insurers of last resort’ by providing financial support most commonly in the form of disaster relief recovery. Brokers are able to work with their clients and insurers to reduce instances of underinsurance or non-insurance for these difficult-to-insure risks, reducing the financial burden on government and society.

Insurance brokers also play a critical role in disaster recovery. This year alone, brokers have supported their clients through bushfires, floods, cyclones and hailstorms. By supporting clients through the claims process, broking professionals are able to advocate for better outcomes for their clients and the timely release of claims payments. This helps to support the recovery of local economies and can play a significant role in offsetting the initial impact of disaster events.

In more regional areas, the ability for local economies to absorb the economic losses of a natural disaster is reduced, making access to timely claims payouts even more critical to the return of normal economic activity.

In the absence of the risk solutions provided by broking professionals, disasters such as these would take far longer for the economy to recover from and would likely come at a much higher cost for governments who ultimately bear the burden of funding natural disaster recovery.

In my role as CEO, I witness the important work brokers do every day. Unfortunately, it is often only during the most challenging of times that the broader value of brokers becomes clear. As communities around Australia begin to bounce back from yet another major loss event this year, the need for community resilience and strong local economies is more apparent than ever, as is the important role brokers continue to play in helping communities rebuild.

The evidence of the broker value proposition is set out in the Deloitte Access Economics report: The economic value of insurance brokers in Australia.

This report on the role and economic value of insurance broking in Australia is available online: niba.com.au