The Business Magazine March 2024

Advice that makes a difference…

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Led by CEO, Phil Barton, Partners& marks a turning point in the way advisers engage with clients.

In this article Phil Barton, looks at the value of advice.

It’s a well-known fact in the insurance industry that our first exposure to buying insurance is our first car. At that time of life, insurance is expensive, and we don’t have the money (or frankly, the inclination) to make a prudent choice about what insurance we put in place – and that’s when our relationship with insurance is forged. Too often, we’re programmed to always look for the cheapest deal.

Over the years, the insurance industry has responded to this price-based, decision making behaviour by commoditizing its proposition, diminishing its service offering and cutting back on important protection.

The impact is sub-standard customer service, increasing administration fees, ever changing service teams so you never speak to the same person twice, and reduced levels of advice – and in an ever-changing world, the need for good quality advice is the only constant.

As with any commodity, there is a basic cost to producing a product. If you cut back too far, you should ask yourself, what critical elements are being cut out to present that product at an acceptable price point. In my view, that’s where the industry has gone wrong. It’s trying to sell the cheapest product, rather than demonstrating the real value of advice to clients.

Would you invest in something you didn’t fully understand?

Of course not. If you were a sky diver, would you buy a cheap parachute? Highly unlikely.

“Our responsibility is to provide the right advice for clients, ensuring they understand their risks in a holistic way.”

Our responsibility as professional insurance brokers is to provide the right advice for clients, ensuring they understand their risks in a holistic way, so that in the event of an incident, the policy responds and that their business has the support it needs to recover.

This approach contrasts with a price comparison approach, focused upon simply renewing last year’s programme – one that assumes that your business (or your lifestyle, for that matter) hasn’t changed, something which is highly unlikely, particularly this year!

You should be asking your broker to diagnose your risk exposures and to talk to you about the options including risk transfer (to an insurer), risk mitigation and self-insurance.

Ask yourself, for example, has your broker tried to understand your cyber exposure? After all most businesses have had a dramatically increased exposure to phishing attacks throughout the pandemic.

Have you considered your business succession plan – and is your profit protected from the loss of a key member of the team?

Equally, what about the wellbeing of your people? How are you navigating that risk, given the impact that the pandemic has had on mental health and the working environment? Do you have the right health and safety procedures in place? Because if you don’t, you could open yourself up to liabilities.

If you’re not having these conversations, and the only question your broker asks is, “what is your renewal date?” my advice would be to find yourself a better insurance adviser – one who believes in partnership and is willing to invest time to understand your business, diagnose your risks and put the right programme in place to protect you, your employees and your business.