As regulatory demands, recruitment headaches and shrinking margins squeeze small brokers, one Sydney-based managing director says growth isn’t just an option, it’s a necessity. Schalk Van Der Merwe (pictured above, left) and his brother Ben (picture above, right) could be redefining what it means to run a family brokerage in today’s insurance landscape. The brothers have turned Omnisure Insurance and Risk from a boutique operation into a thriving, medium-sized powerhouse. Their journey could offer a blueprint — and a warning — for brokers across Australia.
The firm that Schalk and director Ben - both still aged in their mid-30s - took over from their parents more than 15 years ago was a much smaller business. Through acquisitions and organic growth they’ve expanded from a few staff in 2007 to 25 and growing. This transformation reflects a broader trend in the Australian insurance sector, where many family-run brokerages are facing increasing pressure to scale up or risk being left behind.
For many small brokers, the day-to-day pressures can feel overwhelming. The MD said a major motivation to become a medium-sized firm was the financial, recruitment and compliance pressures that can bear down so heavily on smaller brokers.
“Keeping staff happy is hard and keeping up with all the compliance is really difficult,” said Schalk Van Der Merwe. He said this pressure on margins and compliance is a “massive problem” and for most businesses a little size does help with these challenges “significantly.”
This sentiment is echoed by many in the industry, as smaller firms struggle to balance the demands of compliance with limited resources. Schalk’s perspective highlights just how critical scale can be for survival.
“When I look around at other suburban brokers who are the size that we were about five years ago - I feel for them,” said the MD. “It's a real challenge trying to get the right people in the business and having the financial capacity to afford them.”
As Omnisure grew, the benefits of increased scale became clear. For example, the MD said the delegation of responsibilities that happens once staff numbers are increased can have a big impact on productivity. The business now has a financial team that takes care of the accounting and other financial duties.
“That takes pressure off Ben and I - traditionally we did that,” he said.
They’ve also employed senior level brokers who take care of client relationships which takes further pressure off him and his brother.
“What that allows you to then do is go out and do more business development and think strategically about the direction of the business and, most importantly, think about what you're offering customers deeply, and is it valuable?” Van Der Merwe said.
These operational changes not only relieve pressure on leadership but also create space for strategic thinking and business development - key ingredients for long-term success.
Growth doesn’t just impact internal operations; it also changes how the business is perceived by insurers. Now that his brokerage is bigger, Schalk Van Der Merwe said insurers tend to treat his firm better.
“Unfortunately, when it comes to insurers, when you're a smaller size, they put all the small brokers in a bucket,” he said.
This bucket, he said, is often one BDM.
“Once you're a little bit bigger, they do start dedicating some resources to you,” said the brokerage MD. He said this includes specific underwriters as direct contacts who staff can forge relationships with.
“You can escalate issues to them or ask them to underwrite something in a particular way - it helps us to get a piece of business across the line,” said Van Der Merwe.
For many brokers, this shift in attention from insurers can be a turning point, enabling more tailored service and better outcomes for clients.
The MD said what he hears most from colleagues in small brokerages is how they are really under financial pressure. “A lot of them are feeling a bit burnt out,” he said. “Trying to make a decent margin so they can actually take some money home to their families is hard.”
One contributing factor, he said, is that a lot of smaller brokers are authorised representatives (ARs) so their licensees are taking a portion of any income.
“It might seem easy from the outside but the suburban style of family-run brokerage that's running a small team and more of a lifestyle business, I think, unfortunately, is becoming a thing of the past,” he said.
This reality is prompting many small brokerages to reconsider their business models, as the traditional “lifestyle” approach becomes less viable in today’s market.
With growth comes new questions about the future. IB asked the young MD if he’s concerned that at some point this growth could irrevocably change the character of his family business?
“I think there's definitely a point,” he said and suggested that growing to 60 or 70 people could be the limit. “Obviously every business has the challenge to keep that quality at the coalface,” said Van Der Merwe.
He said “a lot of good people” who have run big businesses frequently warn him about the dangers of getting too large in scale. “We’ll keep going until we see problems, and then we'll adjust,” he said.
This measured approach underscores the importance of thoughtful, sustainable growth - balancing the need for scale with the desire to maintain the core values and quality that define a family business.
What are the challenges facing small brokers? Does scaling up to medium size help? Please tell us your thoughts below
