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The immense value of insurance broking to clients, insurers, the economy and society has been demonstrated by a new report prepared by Deloitte Access Economics for the National Insurance Brokers Association (NIBA).

This report can be accessed here.

The executive summary of the report shows the value of insurance brokers in the following ways :

Value to clients

1. Quality of advisory service: ranked as the number one factor by clients when choosing Insurance.
2. Tailored risk-management solutions: 40% of clients are under insured or not insured at all, before engaging a broker (on average).
3. Greater choice: the average NIBA broker offers products across over 10 different insurers.
4. Time savings: saving each client an average of 11 hours, which equates to more than $230 million in time savings from business customers.
5. Claims support: saving each client an average of 2.5 hours in the claims process, and where 41% of SME clients agree that it would otherwise have been ‘much harder’ to process.
6. Understanding and managing risks: noting that brokers identified 62% of client had limited understanding of their risks.

Value to insurers

1. Saved resources: saving each insurer an average of 3.3 hours, which equates to more than 1,380 FTE staff each year.
2. Product distribution and client reach: 38% of broker premiums written for clients outside of Australia’s capital cities.
3. Product innovation: 13% of a broker’s policies sold represent new market opportunities (on average), with `cyber risk’ commonly identified.
4. These benefits to insurers also reflect value for clients, in the form of saved time, increased choice, and access to more innovative and tailored products.

Value to the economy

1. Market efficiency: reducing uncertainties for insurers and closing information gaps, which allow for more appropriate pricing and product matching, and encourage greater competition.
2. Risk management and economic stability: to facilitate better product matching, faster claims receipts and provide broader risk advice.
3. Brokerage businesses employed 15,000 FTE workers, and contributed $2.6 billion directly to the Australian economy (2018-19).

Value to government and broader society

1. Disaster relief, advocacy and policy advice: supporting clients with claims preparation, assessment, lodgement and negotiation processes.
2. Helping to obtain Insurance solutions for difficult-to-insure clients.
3. Supporting local communities: surveyed brokerage businesses donated over $25,000 per year to charitable and other social causes, and volunteered more than 550 staff hours to charities and other organisations (on average).