The latest edition of Aviva Broker Barometer survey pinpointed insurer service as the number one challenge concerning brokers today, underscoring a critical area of concern within the industry. The study reveals that three in four (73%) brokers worry about clients being underinsured, with inflationary pressures cited as a primary cause. This concern ranks second only to insurer service among the market challenges brokers face, highlighting the complex issues brokers must navigate in the current economic climate.
Despite optimism about potential business growth, with 83% of brokers anticipating moderate to strong growth for their businesses and 80% foreseeing similar prospects for their clients, the Aviva Broker Barometer highlighted underinsurance persisting as a significant issue. This suggests that while growth is on the horizon, underlying risks could undermine this progress if not properly addressed. Meanwhile, the survey indicates that only 24% of brokers report that clients have adequately increased their insurance sums in response to inflation, further emphasizing the gap in appropriate coverage.
The Aviva Broker Barometer also touched on the adequacy of indemnity periods in business interruption insurance, noting that only 25% of brokers believe their clients have sufficiently adjusted their indemnity periods to account for supply chain disruptions. These findings point to a broader issue of preparedness in the face of increasingly complex risk landscapes.
Jason Chambers, director of innovation at Aviva, noted the evolving challenges of underinsurance and its effect on insurance brokers and their clients. “The underinsurance challenge for brokers has evolved. A few years ago, brokers were being urged to educate their customers on the impact of inflation and supply chain issues on their sums insured and indemnity periods.”
Chambers explained the importance of the broker-client relationship, particularly in a cost-cutting business environment, emphasizing the need for regular engagement to ensure businesses are adequately protected.
To make the leap required to meet brokers’ service standards, insurers need to undertake a significant mindset shift – from focusing solely on performance to balancing that with greater levels of market visibility.
Brokers, in particular, want unobscured communication channels with the decision-makers within insurance companies, which simply isn’t possible when the internal organisation is misaligned.
Mark Griffin, Chief Executive Officer at Exance, said: “Underinsurance in the modern landscape is a significant issue and this study by Aviva highlights the complex issue that brokers must now navigate.”
“At Exance, we are committed to enhancing the way insurance is managed and delivered in the UK, ensuring our partners can serve their clients with confidence and ease.”
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