Amid the NIBA Convention’s focus on global risks - climate change, economic turbulence and the “megatrends” reshaping business - one finding stood out. When NIBA CEO Richard Klipin unveiled landmark research, “The State of the Sector” (main picture), the results defied the prevailing mood: 79% of Australian brokers are confident in the business outlook over the coming months. Insurance Business asked brokers at the event what’s driving this optimism and how it squares with the world’s uncertainty?
For many, Australia’s relative stability is a key factor. Broker Prudence Chang, when asked if she counted herself among the confident majority, was unequivocal. “Yes, I am certainly,” said the joint managing director of National Credit Insurance Brokers (NCI). Chang pointed to Australia’s geographic and economic position as a buffer against some of the volatility seen overseas. “I feel that the global market is certainly more volatile than the Australian,” she said.
Chang said being on an island nation and a considerable distance from at least some of the worst issues helps brokers feel “a lot more secure than other areas of the world.”
Chang also said the local insurance market’s recent softness has forced brokers to adapt and strengthen their businesses. “Because we have been in quite a soft market for a little while in insurance, we've now bolstered our businesses to understand that soft market,” she said.
As a result, she believes brokers are well positioned for any market shift. “When it does turn, we're actually really in a good position to be able to represent not only ourselves, the market, but also our clients moving forward,” said Chang.
Lisa Carter, another broker at the convention, also expressed confidence in the industry’s outlook. “Yes, absolutely,” said the CEO of Clear Insurance when asked if she shared the optimism reflected in the NIBA survey. Carter underscored the essential role insurance plays by underpinning the broader economy.
“Without insurance, buildings wouldn't get built, cars wouldn't be on the road, loans wouldn't get approved,” she said. “So, whether we're in an economic downturn or things are going well, everyone will always need insurance.”
Still, challenges remain. Chang highlighted the ongoing risks tied to Australia’s export market, particularly its exposure to China and, by extension, the US and Europe.
“Certainly, the export market here in Australia, we are affected very greatly of course by China and China is very greatly affected by the US and Europe at the moment,” she said, noting this is “always a concern coming from a trade credit product line.”
Yet, she sees opportunities in diversification: “We are able to securitise different areas for our exporters by helping them sell into different countries such as India and Indonesia and also predict any likely issues and then give those clients information about it,” said Chang.
For Carter, the path forward for brokers is to focus on clients and deliver value.
“The opportunity for the insurance broking industry over the next 12 months, even if we are going into an economic downturn, is to really focus on our clients, provide good service, provide good advice - and if that's what you're doing in your insurance broker business, you'll do well,” she said.
Carter said if brokers are fulfilling their risk management and insurance role and doing the right thing by clients, then their businesses will continue to be successful.
Are you an insurance broker? How optimistic are you about your business prospects in the months ahead? Please tell us below.
