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Analyzing brokers’ professional indemnity exposures

Insurance dealers operating in the skilled indemnity insurance market are confronting perhaps the most difficult conditions in history – battling an increasingly hard market, changing customer expectations and evolving cover restrictions.

The demand for available insight and thought leadership into the undulations of the demand and the explanations available to dealers today is mounting. It was in recognition of this that senior committee members at MGB Insurance Brokers joined IB Talk for a podcast on ‘Navigating the hard PII market’. Evaluating the key challenges that he is discerning in influencing brokers at this time, Nick Bender, joint managing manager of MGB Insurance Brokers noted that they go beyond the concerns being voiced by their clients to include the susceptibilities that brokers themselves face.

“I think that insurers are concerned about the workers of insurance brokers… [around areas such as] slip and trips, for instance, where they’re working from home,” he said. “There’s not enough peer checking and one in every 10 or 20 or 30 employees is attempting with mental health issues. With that comes errors. And I wish I’m wrong, but I think we will see over the next two or three years, claims made against insurance dealers where they haven’t done something.”

Bender highlighted that this is an interest shared by many of MGB’s partner brokers because they have seen first-hand how difficult it can be to remotely run an industry. The reality is, he said, that from time to time, every firm struggles. And he doesn’t think any insurance brokers would claim to be as totally in control of their business as they were when everybody was working in the physical assumptions of an office, and accountable to managers.

When working in an office, it was easier for staff, particularly junior staff, to ask clasping questions and earn excuses swiftly, and to avail of ongoing training on a weekly or monthly basis in a way that simply hasn’t been as accessible during COVID. The last 18 or so months have been very hard for everybody, he said, but they have been extremely difficult for insurance brokers.

“Again, I hope I’m wrong, but I believe this market is going to be pretty hard for insurance brokers over the next two to three years,” he said. “It’s not all doom and gloom, but we are monitoring claim trends every month, and the number of situations in claims is on the increase.”

Looking beyond this to the complexities of the hard market and the challenges that brokers are confronting while serving the insurance requirements of their clients, Pat Boreham, head of broker growth at MGB, highlighted how brokers can offset and mitigate PII claims coming down the line. It might sound simple and simple, he said, but this all alights to communication. Whether a broker has a client whose PII revival is due soon or even just in the coming policy year, they must make the effort to pick up the phone and talk to that client.

“I think that’s one thing that has come out of working remotely,” he said. “In some admirations, it has almost been forced upon people actually to pick the phone up and talk to brokers. And [before this], I’d never learned of Teams and Zoom in my life and now I like to think I’m a little bit of a specialist on Teams meetings, on Zoom conferences and establishing them up.

“So, good things have come out of this. But I would certainly say to brokers, particularly when they have someone like ourselves, Lloyd’s wholesale broker involved – pick the phone up and talk to people. This will then enable you to manage your clients’ expectations moving forward in this difficult market.”

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