‘Robust honesty' vital as broker/insurer relationship evolves
Brokers continue to dominate distribution channels, making positive relations a must for insurers, but Markel’s Dan Martin says such strong interactions are no cakewalk, and neither should they be.
As the role of brokers in the insurer/broker relationship has evolved and diversified in recent years, the case for ensuring strong relationships with “an enhanced degree of robust honesty”, has never been clearer, even if that means navigating a few bumps along the way.
This was the view of Dan Martin, managing director of Distribution Strategy and Business Development at Markel International, as he discussed how the role of brokers has shifted and why a strong relationship remains vital to insurers’ success.
In recent years, Martin has seen brokers evolve beyond client advisory and advocacy services to include risk management, risk engineering, managing general agent capacity placement services and client consulting to carriers.
“Brokers have diversified and built revenue streams for themselves. At the same time, the risk needs and demands of their clients have changed, so they’ve had to shift focus and become more sophisticated in terms of the emerging trends and challenges that the market and the macroeconomics create,” he said.
Martin characterises the current relationship between brokers and insurers as “extremely complex”. And, he said, Markel’s position in the market means the company interacts with brokers in a huge number of ways. This ranges from product and claim offerings to the risk management that brokers and insurers sometimes work on together, as well as identifying future trends.
He emphasised the importance of the broker as a representative of the primary interests of the client. “We understand the law of agency and we don’t mistake or misunderstand it. We value it and the advocacy they bring on behalf of those clients,” he said.
Not just fit and forget
When it comes to how well brokers currently bridge the gap between insurers and insureds, while supporting the optimum risk to capital alignment, Martin points to seriously complex risks as an example that shows where it works as well as where it sometimes doesn’t.
“Such risks need to be solved in the tripartite relationship between the client, the broker and the carrier community,” he said.
“Brokers come into their own particularly where they’ve helped to solve these risks in a sustainable and long-term manner, rather than just a ‘fast fit and forget’, when tomorrow insurers have to re-engineer solutions and start again,” he explained.
“Brokers who listen well and bring the client’s demands to carriers so that we can be educated by those clients on their risk needs, is a great start to that proposition.
“The brokers also need to be diligent in working with us on those solutions.”
Martin highlighted the work Markel and its brokers have done to continue providing coverage on hull war programmes during the Ukraine/Russia conflict. Such efforts have enabled Markel to provide genuine coverage capacity and capability through very troubling times for clients, he noted.
Insight into large and complex risk
Martin stressed that a strong bond with your brokers is key for insurance carriers to survive and thrive.
