At a glance
- Our latest broker voice is Andrew Weir, Director of Greenwood Insurance Consultants
- He suggests that the rise of aggregators could actually be a benefit to brokers
- The biggest threat to brokers could actually be themselves – find out why below
Based in Glasgow, Greenwood Insurance Consultants has a long-established reputation built on a strong regional presence and the traditional values of service, relationship and trust.
The brokerage specialises in a wide range of insurance including Commercial, Personal, Church and Charity and Equine.
We spoke to the company’s director Andrew Weir about the challenges facing the industry and how the market may not be hardening at all.
Q: What lines of business do you specialise in and what are the opportunities and challenges you see there?
A: We specialise in general commercial insurance, along with a growing number of niche sectors. We have built a strong and talented team and a great foundation upon which to develop in the future.
Competition in the industry remains fierce and we are challenged daily to make sure we are giving our clients the very best possible value. I don’t see this letting up anytime soon, and it is to the customer’s advantage that this remains the case.
Broker Voice gives UK brokers the opportunity to voice their opinion on the state of the insurance industry, outline what makes their own personal style of business different from their competitors, and what personal interests enhance their professional life.
Q: Are you on social media? What’s your Twitter handle?
A: We have very recently joined Twitter so are relatively new to this world! You can find us @GreenwoodInsure.
Q: Does the rise of the aggregator model worry you?
A: Not particularly. I think brokers are learning to cherry pick the most appealing features from the aggregators, such as efficiency of quotations and delivery of policy documents, in whatever preferred format is required.
Our commercial clients are not interested in surfing the web on a Sunday night to sort out their commercial insurances, in contrast to price-obsessed personal lines consumers. They see the value in having professional and trusted advice from a broker.
There will inevitably be a slow creep into the smaller and more standard commercial market and we are already seeing this, but our challenge as brokers is to offer something of equal appeal to those customers.
As such, we should lean heavily on our insurer partners to achieve this, after all we are relentlessly told that we brokers are the preferred distribution channel by all of the major insurers.
Q: What do you think are the biggest emerging risks, and why?
A: On the face of it, cyber crime looks to be the monster coming over the hill. This was recently highlighted with the cyber attack on Sony regarding their controversial North Korean comedy.
However, I believe that it will take a combination of high profile and local losses (if it happened to my neighbour then I want to be covered for it) for this area of cover to really become established, especially at the mid-market/SME level.
Q: Is the market hardening?
A: The market has apparently been ‘hardening’ or ‘just about to harden, next quarter’ for as long as I can remember, but there is very little evidence for this in practice.
The question is actually more complex than it appears – certain insurers will look for big rate increases now and again, depending on their own circumstances and COR (combined operating ratio), and under those conditions, their rates can be said to be hardening.
More often than not, there are vultures hovering around these strategies, ready to pick off any meat from the bone, and this makes it a very tricky path to tread from an insurer’s point of view.
On the other hand, we have very specific industry sectors, which can go through bad times with claims, and we will see the inevitable rate increases and withdrawal of capacity as a result. Due to the global nature of insurance today, and the seemingly endless availability of capacity, it is difficult to see any serious hardening across the board in the near future.
Those insurers with the most consistent strategies seem best able to manage the storms when they come, and we brokers should better recognise this as we consider our own approach to trading.
Q: What is the biggest challenge for brokers?
A: I think we are our own worst enemy in a sense. The way that some firms are managed seems to me to be the biggest challenge that we face, rather than any faceless impending threat from places unknown.
Poor management decisions can very quickly lead to serious damage in a firm and we have witnessed this in the market over and over again. As we look to expand, the way we manage our business will be crucial in our quest for growth to ensure that the risks specific to our business are well managed.
Q: Do you think brokers are recognised enough by the public for the value that they add?
A: I think that the insurance industry is generally undervalued. It is perhaps only those unfortunate enough to have experienced a catastrophic loss who have an appreciation of the true value of our industry when operating at its best.
If a broker is being too greedy then insurers and customers will recognise this and be able to pursue better value elsewhere. Sometimes the market should be left alone – regulation and standardisation isn’t always the answer
That said, our best customers sing our praises regularly, and do see the value in what we are doing for them, which is nice.
Q: Rugby or football?
A: Football, though I’d much rather participate as a keen amateur of limited ability than spectate!
Q: Fees or commissions?
A: I think both have their place. I don’t buy into the hysteria around this. I think it is up to the market to regulate this as best we can and if a broker is being too greedy then insurers and customers will recognise this and be able to pursue better value elsewhere.
Sometimes the market should be left alone – regulation and standardisation isn’t always the answer.
Q: If you were the head of the FCA, what would be the first thing you would do?
A: Hire the best most experienced people I could get my hands on from the industries that I was looking to regulate, and look to them for guidance on how to structure appropriate and effective controls.
Q: Newspaper or iPad?
A: Both. I love my newspapers mostly for the crosswords – a trail of semi-completed word puzzles are usually left in my wake at home during the week. iPad for catch-up TV and the occasionally addictive game/app.
Q: Can’t get through the weekend without…?
A: Sunday night pub quiz with family and friends, bliss!