While Australia and New Zealand remain in a soft insurance market, easing premiums across many lines, affordability continues to loom large for SMEs and mid-market businesses. For brokers, the challenge is less about finding one-off savings and more about navigating a competitive environment where client expectations are rising, margins are tight, and the risk landscape is far from static.
Beyond the obvious levers
Brokers know the traditional cost-containment strategies inside out: switching insurers for sharper pricing, adjusting excess structures, or encouraging selective self-insurance. But these levers are not without risk.
“Not all claims handlers are equal,” warned Austin Rosier (pictured), of Omnisure. “If you buy a two-penny policy, you might expect a two-penny service response.”
That reality means brokers must weigh not just premium savings, but also the potential service gap at claims time - a factor that can define client retention far more than the initial price tag.
Excess modelling and client discipline
Excess management has always been part of the broker toolkit, but Rosier cautions against blunt approaches. While some clients can benefit from lifting retentions - for example, property owners who already absorb routine repair costs - a strategy of “just push the excess higher” can backfire when liquidity is tight.
“You can opt to have a really inordinately high excess,” Rosier said. “But if you have affordability issues, a really high excess may not be a practical solution in the long term because you might not be able to pay the excess on a claim.”
Here, brokers have an opportunity to apply data-driven analysis. For motor fleets or property portfolios, comparing average claims frequency against premium savings can provide clients with a rational framework for decision-making - and help avoid affordability strategies that unravel at claims time.
Risk management as a differentiator
The more strategic conversation is around risk. While many brokers acknowledge the importance of risk management, time pressures often mean it is under-leveraged. For Rosier, this is where real broker value lies.
“The aim is to prepare a business to rely less on their insurance and work with them to improve their risk management to the point where they don't have claims or are much less likely to have a claim,” he said. “This also makes [them] more favourable in the eyes of insurers.”
For brokers, this isn’t just a defensive play to keep premiums in check — it’s also a positioning tool. Clients with demonstrably stronger risk management profiles are in a better position to access capacity, negotiate broader cover, and withstand the next market hardening.
Communication and expectation-setting
Ultimately, affordability is as much about perception as it is about pricing. Transparent client conversations are essential, particularly in a soft market where a short-term drop in premiums can create unrealistic benchmarks for the future.
Rosier shared an example of a client who was “upset at renewal that their commercial insurance had gone up ‘heaps’ when they only budgeted for an inflation level increase.” The reason? Revenue had risen by 85% — so the policy followed suit.
For brokers, these discussions are an opportunity to cement trust, not just explain price movement. Setting expectations now can mitigate awkward conversations later, especially when market conditions inevitably turn.
Positioning for the next cycle
The soft market gives brokers room to move — but it also presents a risk of commoditisation. Those who rely solely on short-term cost cutting may find themselves exposed when the cycle hardens again. By focusing on claims service quality, disciplined excess modelling, and embedding risk management into the client relationship, brokers can deliver sustainable affordability strategies that go beyond “shopping around”.
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