‘Seismic’ year ahead for insurance brokers

by David Masters

Story link: ‘Seismic’ year ahead for insurance brokers

A deepening credit crisis and increased demand for transparency from clients will make 2009 a ’seismic’ year for insurance brokers, according to specialist insurance technology provider Alphatec.

Alphatec managing director David Grier said tough economic conditions mean that clients will be demanding better value from insurance brokers, and will be asking for an in-depth breakdown of fees and commissions.

Clients want to make sure of a good return on their investment in using an insurance broker, Grier said.

Alphatec believes that greater understanding of costs will be beneficial to brokers, as it will allow them to explain to clients the full value of using a professional broker rather than a price comparison service.

Openness will help brokers retain existing clients and raise fees where evidence supports it.

In addition, brokers will be better able to analyse which client contracts are most profitable, and which client contracts they would be best to terminate.

The year ahead will be challenging, Grier concluded, but it has the potential to be highly prosperous for brokers prepared for the market conditions.