David Mustard SURVEY OVERVIEW

Transcription

1 David Mustard SURVEY OVERVIEW

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3 Thank you to the 775 brokers, management and support personnel who took the time to make their voices heard and helped to make this a robust view of your industry s performance

4 1 Introduction

5 Insurers have a strong desire to understand how the broker segment evaluates their performance and to identify improvement opportunities Situation Brokers write about $3.5 billion of premiums, representing over 85% of the corporate insurance market value of $4.77 billion Because of the common interest, this research has been undertaken as a syndicated study with IBANZ and the four major insurers: Lumley, NZI, QBE and Vero An important element of the research is identifying improvement opportunities and helping insurers to prioritise actions The research also helps to identify emerging issues facing the industry Interrelated with the research is a need to apply an independent and objective mechanism for determining the IBANZ Most Valued Insurer for 2014

6 Methodology The survey was undertaken between 03 September and 23 September 2014 The method was an online questionnaire A total of 775 insurance brokers, management and support personnel participated The response rate was about 30% The database used was not limited to IBANZ members. The contact list was compiled from lists held by IBANZ and each of the major insurers so the survey represents a comprehensive industry wide view The balanced scorecard model developed has an overall fit of 79%, a result that is exceptionally strong Based on the overall performance question, the margin of error is small, being +/

7 2 Profiles

8 Responses are distributed across the broker segment and are reflective of company size Broker network or company AON 17% n = 133 Crombie Lockwood FMR 14% 110 BrokerWeb 11% 85 An independent broker 9% 71 Marsh 6% 47 Rothbury Brokernet Advisernet Allied 5% 5% 5% 5% PSC 1% 81 Prefer not to answer 12% 94 Other 10% 63

9 Although dominated by brokers, like last year we have included respondents from within other roles (43%) What describes your role n = Broker selling insurance 57% 59% 440 Administration and support services 20% 21% 153 Senior management 9% 11% 71 Claims 5% 7% 40 Other 8% 2% 64 Don t know 1% 1% 7 775

10 Overall 39% of brokers regularly use all four major insurers and about two thirds are using at least three companies Brokers use of insurers % regularly using (1) 2013 Using all major companies 39% 41% Using three of the major companies 26% 25% Using two of the major companies 18% 17% Using one of the major companies 14% 15% NOTES: 1. Sample size n = 481 brokers

11 Almost all brokers regularly use one or more of the major companies and half are regularly using the smaller insurers Brokers use of insurers % regularly using one or more (1) % 91% 86% 76% 60% 55% 42% 39% 97% 92% 87% 76% 62% 57% 43% 38% Vero NZI Lumley QBE AIG Zurich ACE Allianz 98% 45% NOTES: 1. Sample size n = 440 brokers

12 The amount of business that is being placed with the smaller insurers however is relatively small Share of policies placed: major vs. minor (1) Average across insurers 89% 11% Major insurers NZI, Lumley, QBE, Vero Minor insurers ACE, Allianz, AIG, Zurich NOTE: 1. Sample size n = 419 brokers

13 3 Industry Performance

14 The industry has improved its overall service although this has reached a plateau at around 7.0 (1-10 scale) Overall industry performance (mean scores 1 to 10 scale)

15 The framework that we have applied measures each critical aspect of the insurer-broker relationship to enable elements that directly influence overall value perceptions to be assessed Performance Evaluation ILLUSTRATIVE Image and Reputation Business processes /departments Sub-Level Drivers Clear Terms Products/Policy Covers Consistency Overall Performance Products, Services and Business Support Claims Service Business Support Business Processes Relationship Management Tailored Solutions Business processes /departments Competitive Prices and Commissions Negotiate Commission

16 The industry is collectively performing reasonably well although performance could be better Performance Evaluation Poor (1-4) 7% Average (5-7) 44% Impact 34% Image and Reputation Industry (mean) Major insurers (mean) Minor insurers (mean) Excellent (8-10) 49% Overall Performance 43% Products, Services and Business Support Industry 7.0 Major insurers 7.3 Minor insurers % Prices and Commissions Major banks (1) 8.0 NOTE: 1. Major banks benchmark: Among companies with an annual turnover $1m-$150m

17 Brokers are looking for insurers to demonstrate leadership and this is an area where the sector can potentially add greater value Image and Reputation (1) Overall image & reputation Impact Weight Industry Score % Demonstrate strong leadership 31% Advocates for the industry 19% Solid & well established organisation 19% Well known to your customers 17% Act with ethics & integrity 14% Financial strength to meet claims 0% NOTE: 1. Sample size n = 775

18 Managing relationships remains important and as we found in the 2013 results, this is an area of weakness Products, Services and Business Support (1) Impact Weight Industry Score 2013 Overall products & services 43% Managing the longer term relationship with brokers 36% Products / policy covers 21% Day-to-day business support 21% Business processes 17% Claims processing 4% NOTES: 1. Sample size n = 775

19 This year there has been some change of focus with more emphasis being placed on commissions paid, although insurers are generally evaluated well on this attribute Pricing and Commissions (1) Impact Weight Industry Score 2013 Overall pricing (commission) 23% Competitive commission structures / brokerage 38% Willing to negotiate premiums when appropriate 25% Competitive premiums for new business 24% Competitive premiums for renewals 13% NOTES: 1. Sample size n = 775

20 The most significant opportunities relate to improving day-to-day support, taking a stronger leadership role and being more active in managing relationships Industry Priorities For Action (1) 8.5 Promote the value Maintain Financial strength to meet claims 8.0 Solid & well established organisation Industry CVM Rating (1) 7.5 Willing to negotiate premiums when appropriate Act with ethics & integrity Well known to your customers Overall products / policy covers Advocates for the industry Competitive commission structures / brokerage 7.0 Competitive premiums for renewals Overall business processes Competitive premiums for new business Overall day-to-day business support Demonstrate strong leadership 6.5 Low priority Overall claims processing Overall managing the longer term relationship with brokers Priorities Notes: 1. Sample size n = 775 Level of Impact on overall CVM (2) 2013 Improvement

21 IAG and QBE are seen as being more innovative while NZI, Lumley and Vero are positioned on similar attributes relating to service, easy to work with and being general insurers Brand Position Map Supports the community Innovative products & services Stable and secure Highly professional Specialist insurer Expert in their field Prices competitively Superior service Forms strong partnerships Strong ethics and integrity Adaptable & flexible Dependable and reliable Technology focussed Easy to deal with Generalist insurer

22 Lumley is seen as being easy to deal with, NZI is recognised for its community support, QBE for being a specialist and Vero its service Relative brand strength Major insurers Easy to deal with Generalist insurer Technology focussed Supports the community Generalist insurer Forms strong partnerships Specialist Experts in their field Innovative products & services Recognised for superior service Adaptable & flexible

23 Reduced competition in the sector, increasing cost of insurance, adopting new technology and automation, the ability to retain / attract skilled people and public perceptions are common concerns Industry Issues

24 4 Summary

25 Summary Although almost half of insurers regularly use the smaller insurers the amount of business placed is small with around 90% of policies being placed with the major companies Insurers are doing a reasonable job of servicing brokers, but not outstanding. Improvement priorities relate to demonstrating leadership, day-to-day support and managing relationships The need for insurers to take a leadership role for the industry has increased in importance relative to last year Lumley is recognised for being easy to deal with, NZI is recognised for its community support, QBE for being a specialist and Vero is recognised for its service quality Lack of competition, the cost of insurance, natural disasters, difficulty retaining / attracting knowledgeable staff and poor public perceptions of the industry are all identified as issues that need to be addressed