The economic value of insurance broking has been saved
The economic value of insurance broking
Choice, access, efficiency and quality service
Insurance brokers play a pivotal role in supporting clients’ access to the market, increasing their choice of policy and reducing instances of underinsurance. Commissioned by the National Insurance Brokers Association, this Deloitte Access Economics research identifies the benefits brokers bring to clients, to insurers, to the economy and to government and broader society.
Insurance markets can often be complex and difficult for the average client (individual or business) to navigate. Insurance products are highly detailed and specific, and it is not simple to make perfect comparisons between similar products from different insurers.
Insurance brokers are licensed industry professionals who work on behalf of clients. Brokers play a pivotal role in supporting clients’ access to the market, increasing their choice of policy and reducing instances of underinsurance by educating them about risk management. In doing so, brokers also bring value to insurers, the economy, government and broader society.
This research, commissioned by the National Insurance Brokers Association, quantifies these benefits.
For clients, brokers provide a quality advisory service, tailored risk management solutions, greater choice, time saving and claims support. The average NIBA broker offers their clients the products of over 10 different insurers. Brokers save clients an average of 11 hours across the insurance purchase and claim cycle – a value of $230 million in time savings for business customers.
For insurers, brokers are an efficient distribution channel and play a key role in communicating with clients about new insurance products. On average, a broker saves an insurer 3.3 hours in working with clients – the equivalent of 1,380 FTE staff each year.
To the economy, brokers contributed $2.6 billion directly to the Australian economy (2018-19), and directly employed 15,000 FTE workers. The insurance broking industry also supports insurance market efficiency and economic stability, by facilitating better risk management.
For broader society, brokers make a significant contribution to disaster relief efforts, by supporting clients through the claims process efficiently and compassionately. Brokers also help obtain insurance for difficult-to-insure clients and support their local communities through charitable donations and providing broking services free of charge.
Published: October 2020