How carriers can win coverage placements from brokers

As some insurance hard markets show hints of softening — particularly in commercial specialty lines — brokers answering Canadian Underwriter’s annual National Broker Survey say the technical aspects of an insurer’s offering play a big role in decisions about where to place client business.

For example, 91% of 2024 respondents say their chief consideration is the carrier’s policy terms and conditions — a sharp rise from a consistent 83% between 2021 and 2023.

The survey, fielded in January and February 2024, gathered views from more than 200 brokers nationwide about challenges and opportunities for the broker distribution channel. The CU survey is sponsored by Sovereign Insurance.

Claims concerns

In second place for 2024 concerns about business placement, the percentage of brokers saying they prize carriers’ claims-handling abilities climbed to 88%, possibly reflecting last year’s record level of NatCat events. That’s up from 85% last year and 81% in 2022.

While it appears to be easier to make a claim now, brokers note it’s harder to find claims information once that claim is made.

For example, a new question in this year’s survey asks brokers about various aspects of claims-handling. It finds 84% of brokers saying carriers’ claim submission processes meet or exceed expectations, but that number falls to 66% when asked about claim-settlement satisfaction.

Brokers’ views about other aspects of the claims process are lacklustre. Just 61% of brokers say collaboration with an insurance partner ‘meets or exceeds’ their expectations.

Sixty per cent agree with that statement for speed of claim payments, while 56% are satisfied with an insurer’s communication and clarity during the process. Only 44% of brokers say the speed and efficiency of the claims process meets or exceeds expectations.

Pricing problems

Meanwhile, importance of a client’s price point — which was relatively steady during the pandemic — climbed to 77% in 2024’s survey, up from 71% in 2023 and 69% in 2022.

It’s not a surprising change, given insurers’ need to raise premiums in response to inflation and NatCat-fuelled claims cost hikes. Still, concerns about carriers’ underwriting flexibility backs off slightly to 82% from 85% in 2023.

“Claims and retention affect financial performance,” says a respondent with between 16 and 30 years in the business. “Customers are very price-conscious, and our brokerage needs to be proactive in communicating with the customers to retain them and avoid carrier-hopping.”

This article is excerpted from one appearing in the April-May 2024 print edition of Canadian Underwriter. Feature image courtesy of iStock.com/beast01