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Brokers struggle to sell risk management as insurers tighten cover
eCovers head of broking and distribution Kieron Burrows said insurers increasingly price businesses based on risk management, creating a gap between better run and worse run clients.
Insurance Business reports that brokers are often not making risk management a central part of client discussions, even as insurers roll out tools to price coverage according to how seriously businesses manage risk, according to Kieron Burrows, head of broking and distribution at eCovers.
Burrows said risk management is frequently treated as a cost rather than an investment, in part because brokers commonly look to insurers to fund it, which can make the service difficult to sell when some brokers recommend it and others do not.
He noted that in one scenario he cited, a client being asked to pay between £1,500 and £5,000 for risk management while a competing broker makes no such recommendation can weaken demand, with Burrows adding that pressure to meet sales targets also plays a role.
Burrows said that visits can quickly indicate whether a client is committed to risk management, and he described how, at a company he worked with previously, commitment could be assessed through on-site observations involving staff practices.