Emma Ann Hughes learns how to overcome a hard market thanks to the Society of Insurance Broking’s fringe session
What insurance brokers can do to overcome the challenges of the hard market was explored at the Society of Insurance Broking’s (SIB) BIBA Fringe session in May.
A panel of insurance experts examined the causes of premiums increasing while capacity for most types of insurance has decreased, discussed when the current hard market is likely to end and explained what brokers can do to assist clients when cover is difficult or expensive to obtain.
Peter Blanc, group CEO of Aston Lark and deputy president of the CII, said: “We are right at the worst part of the knee-jerk reaction where underwriters are dramatically increasing premiums. Some would say it is not just a hard market but an almost impossible market in some sectors.
“Cycles are getting faster in lots of ways. It will not take long before underwriters see opportunities. If risks they were writing last year for £100,000 are now being written for £200,000 then from the outside in some would see that as a fantastic opportunity to jump into the market.
“By the second half of 2022 I expect to see a softening, certainly in some sectors where claims are showing significant signs of being under the premiums.”
When asked what insurance brokers could do to assist clients during the hard market, Liz Foster, non-executive director of SIB, said they should look to improve their communication skills and ensure they are seen as a trusted adviser.
She said: “Not every client will hear your message in the same way.
“The pandemic has created a much greater need in our clients to understand their insurance. As trusted advisers, as brokers, we need communication skills and to be able to get authenticity into the message.”
Ms Foster said when she recently explained the background to pandemic insurance to a large business and asked them if they would have bought that cover, the conversation brought her closer to that client.
Mr Blanc agreed communication was key and added in-depth conversations with underwriters were vital to securing the cover required.
He said: “In the last hard market, if you wanted to place a difficult risk you got yourself into London, sat down in front of an underwriter and bludgeoned them around the head until you got the outcome you needed.
“It is much easier to say ‘No’ over email. That has been a feature of this hard market.”
Kevin Hancock, managing director of Yutree and chair of SIB, said: “There is a whole generation of insurance professionals that are seeing this (a hard market) for the first time and it is creating a challenging business environment for many brokers and clients.
“The challenges have been compounded by the difficulties of the pandemic as well as the relentless pace of change in areas such as technology and customer expectation.
“In among these difficulties lies considerable opportunities for professional insurance brokers who can adapt, with high quality trusted advice being in ever greater demand.
“I have seen, just within my own clients, many have changed their businesses and adapted to the current economic circumstances. They have stopped doing some things and started doing other things. Unless we are having very detailed conversations with our clients, we are not able to give them advice.
“I would ask everyone to complete a proper review and have a full conversation with their clients prior to renewal.” For more information, visit: www.biba2021.co.uk
Emma Ann Hughes is communications director of the CII