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What are the benefits of working with a specialised intermediary?

Iain Massey, Senior Manager of Broker Enablement at Indwe Risk Services, uncovers the differences between specialised and general intermediaries, and what consumers should be asking when they’re shopping for insurance.

Firstly, why use an intermediary, whether specialist or general?

The myriad of insurance options available makes the navigation of these options complicated. With so much choice, it makes it difficult to know just what the correct option for your business is. Using an intermediary or insurance broker helps you decide correctly.

The expertise of insurance brokers lies in more than just their knowledge about insurance policy phrasing and understanding the fine writing. Their training and experience focus on specific types of insurance, but also the benefits of risk management. Some brokers focus on niche segments, working with one kind of insurance, or within a specific industry. Many others offer advice on several general insurance types.

An insurance broker is an independent agent who helps people choose and purchase personal and business insurance policies. They represent several insurance companies at once or, in the case of the specialist, a select number in that specific field.

The insurance broker:

  • Listens and understands your insurance coverage requirements, completing a needs analysis.
  • Searches the insurance marketplace to find the correct policy to meet those requirements.
  • Offers objective, impartial advice on the coverage that is appropriate for your needs and fits your budget.
  • Helps you understand the policy of your choice. They explain the coverage and exclusions.
  • Clearly states all costs of your policy, including any fees.
  • Provides clear information and documentation. They also help you with the paperwork, so there is no delay in your coverage.
  • Assists you with preparing a claim, so that you receive quick, fair, and efficient service from the insurance company.

Specialist vs Generalist Intermediaries

Brokers gain significant knowledge in the insurance industry, through learning and experience. Some remain generalists and some choose to specialise in certain segments after years of dealing with those industries and the specific risks associated with the activities in those industries.

Just like you need a specialist heart surgeon to perform a bypass, you sometimes need a specialist broker to provide the correct advice on a complex industry – such as mining or chemicals, for example.

  • Specialist intermediaries stay well informed about cover options in their industries of expertise, and they know how to cover specific claims.
  • Their extensive training and experience allow them to provide specific advice for your segment or industry.
  • This gives you the peace of mind that you’re really receiving expert, objective, impartial advice, from someone who really knows what they are talking about.

General insurance brokers are licensed to offer advice on various products and have access to most products and insurers available in the marketplace, without necessarily having the specialisation needed to offer advice on more complex risks. Generalists can shop widely for the most cost-effective, appropriate cover available for your more general needs.

Does the ecosystem approach of an insurer encourage more generalised or specialised areas of expertise?

Insurer ecosystems use interwoven relationships to fulfill customer needs. The term “ecosystem” refers to an interconnected system of offerings from a variety of participating providers, which allows customers to meet multiple needs through an integrated user experience. In the insurer’s case, this means offering vehicle tracking, roadside assistance, home assistance, car hire etc. These are all non-core business to insurers but have become part of their product offerings as part of the value chain, so they have to set up an ecosystem of providers to supply these services.

Specialist intermediaries can become part of this ecosystem, as one of the providers. The larger generalised intermediaries usually set up their own ecosystems, comprising various specialists who can provide a holistic service to their clients.

A specialist broker provides access to the specialist markets that general brokers may struggle to access. When you have specialised needs or a unique risk that you want to cover, specialist brokers can negotiate with the specialist insurance company for the most suitable policies. In the specialist markets, because of the complexity of the risks and potential consequences, it is less about price and more about coverage and claims service.

Because general brokers are not tied to a single insurer, they search for solutions from leading general insurers, based on your needs. That way, they find the best coverage for you, at the best price.

Given that restrictions are going to be eased and we are going back to more in-person interactions, do personal relationship skills trump either of these two approaches (of generalist or specialist)? 

When you work with your insurance broker, whether generalist or specialist, you take advantage of expert knowledge and experience.

With the easing of restrictions around the pandemic, brokers can once again begin interacting closely with clients to conduct a specialist needs analysis. The personal relationship skills of both general and specialist brokers are essential to build trust with clients and cater for their needs.

This expertise makes shopping around and selecting the right solution easier, and it helps you avoid unnecessary extra costs.

No two businesses are the same, and requirements vary from industry to industry, and from area to area. For example, a shop in a busy urban centre and a shop in a rural area might both sell similar goods, but they have very different needs and risk exposures.

This is where intermediaries add value by engaging with businesses to identify their unique challenges and the risks they are exposed to. An intermediary will visit a business to do an in-depth risk assessment with a client and this is where the importance of interpersonal skills is most highlighted.

For more information about generalist and specialist intermediaries, or to find out about insurance solutions that are specifically curated to your needs, please contact an Indwe advisor on 0860 13 13 14 or indwe@indwe.co.za.

Indwe Risk Services (Pty) Ltd is an authorised FSP 3425.

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