When is it time to switch your corporate insurance broker?

Not all corporate insurance brokers are created equal. The ever-growing intermediary industry in Dubai is providing many businesses with countless options when it comes to securing an employee benefits package, however not all of your choices may be good ones. Unlucky businesses can find themselves trapped with some of the less reputable brokers, like being stuck in a bad relationship. The good news? Ditching your corporate insurance broker isn’t as hard as you might think.

This week, Pacific Prime Dubai looks at the business-broker relationship and discusses just how simple it can be to switch to a better option.

The client-broker relationship

Our partner, UAE Medical Insurance, has previously discussed what an employee benefits broker does but now a recently released report from Insurance Monitor has shown what clients think of the client-broker relationship. On the whole, businesses in the region appear fairly content when using an intermediary, with 41.07% of respondents saying they were “Totally satisfied” with their current corporate insurance broker. Brokers made up 52.63% of the distribution channel surveyed, and their numbers are expected to grow in coming years.

That said, Insurance Monitor has found that the majority of business clients use their corporate insurance broker in an “independent price-discovery” capacity; that is, the most common role they serve is to help companies truly find the best price in the market. While this is definitely an important benefit to using a broker, there’s a lot more an intermediary can do. Many leading brokers work as insurance advisors or consultant, using their industry knowledge and expertise to better support a company throughout the year.

From our previous article on what to look for in a good broker, businesses should make sure they’re getting the best out of their intermediary by looking for:

• Broker knowledge: Uses their market intelligence to do more than just provide accurate pricing, can provide information on what your competitors are offering, what employee benefits trends are rising, and where the insurance market may be heading.
• Easy access: A broker should remain in contact with you during the year with appropriate and useful communication, not just get in touch when your renewal time is near.
• Supportive: If your corporate insurance broker isn’t helping you ensure that your staff is engaged with your employee benefits, then you should probably look for someone who can better support you with a comprehensive communication strategy.
• Backroom services: The best insurance consultants don’t leave you to deal with insurers directly, they’ll offer you claims and administrative support to make the employee benefits experience more efficient.
• Intelligent reporting: Getting the right information with deep and insightful advice should be a key part of your broker’s commitment to you.

Again, not all brokers go the extra mile. Businesses in Dubai are getting better at knowing who’s good and who’s not, but changing their corporate insurance broker can seem like a monumental task for most.

37.5% of companies had switched their corporate insurance broker in the past three years

Do businesses really change their corporate insurance broker?

In addition to price discovery, around half of corporate businesses rate a broker’s role of “client representation” highly. Of the 86 respondents surveyed, Insurance Monitor found that 37.5% of companies had switched their corporate insurance broker in the past three years. What this seems to indicate is that while many intermediaries appear to be doing a satisfactory job, there are still many out there underperforming for their clients.

The report highlights that the main reasons businesses gave for switching brokers were:

• Poor servicing by the broker (33.33%)
• Problems with a major claim (33.33%)
• Inadequate network (global) capabilities to place risk (16.67%)
• Products not available to meet insurance needs (16.67%)

What exactly could drive a business to look elsewhere for its employee benefits brokering? Here are a few scenarios we’ve encountered whilst serving corporate clients both in Dubai and abroad.

Poor servicing

One company was left frustrated after their broker failed to provide adequate claims assistance to a number of their staff members. This had led to numerous delays, unhappy staff, and some unnecessary heat aimed at the company’s HR team. Unfortunately for the company, they had initially engaged the services of a corporate insurance broker who was not familiar enough with an insurer’s claims policy and had overcommitted their expertize in providing claims assistance.

Major claim problems

There was a case where a long-serving, much-loved staff member was diagnosed with a serious illness, and was told by their insurer that the condition was not covered. The company’s employee benefits broker then advised there was nothing that could be done because of the level of benefits the company had chosen for its staff. Unfortunately, this was not quite true. In fact, the policy wording itself provided some coverage, and neither the insurer nor the broker had caught this in the policy wording.

In addition, there was no mention of alternative coverage methods that many corporates consider in major and tricky cases; such as self-insurance.

Inadequate global capabilities

Many of the world’s largest insurers have an extensive global presence, however, there are not as many corporate insurance brokers that do. This has been an issue for companies in the past where they engage the services of an intermediary in Dubai, however, that same broker has no presence in Asia where their next big business push is. Getting a global employee benefits broker can ensure greater efficiency and cost savings, provided they have the global capacity to offer it.

Insufficient products to meet needs

Insurance and employee benefits products come in different shapes in sizes, to meet the dynamic and changing needs of the business and corporate entities that need them. One of the biggest concerns clients can have with a corporate insurance broker is their inability to offer bespoke, tailored insurance solutions to best protect a business. The last thing many companies want to do is deal with multiple brokers for various different business insurances. It is far easier to deal with one intermediary that offers all of the solutions you need.

How difficult is it to change your corporate insurance broker?

Changing an insurer before the end of your policy can be tricky, but the good news is that changing your broker isn’t. Most businesses will have their own period outlined for when they consider a new intermediary; many will put their business out to tender once every three years or so. This sort of process ensures that your company keeps a competitive broker working for them, while also allowing better options to pitch for your business.

If you’re in a position where you believe your broker isn’t truly delivering the best solutions that you expect, then there’s no harm at all in bringing this process forward. Any corporate insurance broker would be happy to take a chance to win your business, and all you have to do is agree to meet with them. From there, an appointment letter can be given to them if you intend to switch brokers, which then notifies your current insurer and broker of your intention.

In the interest of fairness, your current broker will have a period of time during which they can attempt to persuade you to stay with them, and there’s no obligation on your company to retract your decision – even if you choose to hear them out. Insurers and employee benefits providers themselves can virtually work with any broker, so there’s often very little disruption to their business and the products they serve you with during a broker change.

What can Pacific Prime Dubai offer that my current corporate insurance broker isn’t?

Pacific Prime Dubai, and the larger Pacific Prime brand has been providing robust and comprehensive corporate insurance broker services for almost two decades. We’re a leading employee benefits intermediary that works with a range of professional service firms with both local presence and extensive worldwide footprints. We’re the broker of choice for hundreds of thousands of clients for our expert understanding of insurance solutions, as well as our unparalleled client servicing that always ensures that your company is at the center of all of our decision making.

We have a wide range of corporate insurance products, we have seven offices in the top expat regions across the world, and our longstanding relationships with all of our insurer partners means that we’re better placed than many to handle all of the standard services you’d expect from a broker, while also being able to deal with many exceptional and unexpected circumstances.

If you’re free for a meeting, our expert corporate insurance consultants would be happy to answer any and all questions, as well as taking a look at your claims data and providing you with the sort of analysis we believe you won’t get anywhere else.

To schedule a meeting or simply talk to one of our advisors, contact the team at Pacific Prime Dubai today!