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The (unequivocal) value proposition of an insurance broker

The (unequivocal) value proposition of an insurance broker
23-01-23 / Tau kaVodloza

The (unequivocal) value proposition of an insurance broker

Johannesburg - As an intermediary, the role of an insurance broker is multi-faceted, extending far beyond providing clients with advice and guidance on choosing the right amount and type of cover. In the realm of commercial insurance, brokers have a fiduciary responsibility to provide an advisory service that is underpinned by extensive, industry-specific knowledge. As such, the most effective brokers are not only experts on insurance, but they are also risk management specialists who understand the unique threats that face businesses within a specific sector. 

This is the opinion of Jurgen Hellweg, CEO at Western National Insurance, who believes that brokers should see themselves as partners in their clients’ businesses. As he continues: “The advice provided by a broker can make the difference between whether a business survives a catastrophic event or not. It is therefore incumbent on brokers to offer the kind of advice that will ensure ‘business continuity at all costs.’

Theirs is a duty that requires constant vigilance, an up-to-date overview of the state of the market and a generous amount of foresight to assist clients in preempting any changes to their risk exposure that may lie ahead.”

Brokers as specialist experts on best practice in commercial risk mitigation

Commercial risks come from several angles, particularly in the current era in which businesses face threats both in terms of physical hazards and the risk of cybercrime or digitally initiated criminal activities.

Further compounding the complexity of the insurance landscape is the fact that risks are nuanced in how they materialise within specific sectors. A trucking business, for example, will be exposed to several transport-related risks linked to road infrastructure and driver alertness. The specialist aspects of risks that could apply to such a business would differ greatly from, for example, a tax advisory business, which may be more exposed to risks in the form of third-party liability claims.

As Hellweg explains: “This is where the unequivocal value proposition of an insurance broker comes in. Brokers have the opportunity to differentiate themselves in the market as industry specialists that can provide valuable insights into how to ensure that a business growth strategy is not thwarted by unnecessary setbacks.”

For Hellweg, the hallmark of most proficient insurance brokers is a holistic outlook on their client’s unique commercial needs. As he asserts: “The best brokers understand that the bigger picture goes beyond price. They are skilled at honing in on the unique needs of the business and how to negotiate the best premium, but also at ‘zooming out’ and gaining a broad perspective of how market developments could affect their clients’ enterprises.”

Efficient claim facilitation and the role of the broker

Furthermore, brokers serve as consultants on specific insurance products, but also as risk management advisers and ultimately as facilitators of the claims process. In the event of a claim, brokers play a key role in ensuring that the payout process is as streamlined as possible – a vital factor for cash-strapped businesses.

Therefore, when it comes to claims, mutual co-operation is key. Brokers will have the oversight to advise clients on how the process should unfold and which steps to follow. Depending on the nature of the claim, clients may need to report the incident to the South African Police Service and follow the reporting protocols of their insurer. This will involve gathering certain documentation and supplying any information that an assessor may need in substantiating the claim.

Although assessors are not always consulted in the event of a claim, in general, larger and more complex claims require their expertise. Here, brokers will be able to provide clients with an explanation of the role of the assessor and what is needed from the client in achieving a fair outcome.

Typically, the faster an assessor can gain access to the supporting documentation and the relevant premises or evidence of the damage caused or loss incurred, the faster the report can be submitted to the insurers who will honour the claim.

In this sense, as Hellweg concludes: “Effective brokerage involves an end-to-end service that starts with the initiation of the policy and continues throughout the lifespan of the business. Building a relationship with a broker is therefore an invaluable way to ensure that all bases are covered where risk mitigation is concerned and that an expert is always at-hand to offer sound advice in a crisis.”

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