PwC report on new era of risk, challenges for brokers
PwC has issued a new report based on an in-depth survey of risk buyers from multinational corporations. “Broking 2020: Leading from the front in a new era of risk” looks at complex emerging risks ranging from cyber-attack to nanotechnology and the role that brokers should play. While the report focuses on global organizations, it holds lessons for commercial agents of any size or scope.
The report says that insurance brokers are at a "once-in-a-generation crossroads" as disruptive forces reshape the risk landscape. Ever more complex loss drivers render traditional approaches inadequate - brokers must expand capabilities and foster deeper, consultative relationships with business clients:
So what are the implications for brokers? As the traditional intermediary in the risk transfer chain, brokers are ideally placed to identify and develop viable and innovative solutions to the changing risk environment—to be global risk facilitation leaders. We believe there are a number of ways that brokers can ensure they stay on top of the frenetic pace of change in this new era of risk:
• Adapt business and operating models to simultaneously support both cost-efficient standard risk management and a knowledge-intensive consultative interaction with clients
• Expand their information gathering network to better anticipate and understand the new and emerging risks facing their clients
• Improve their ability to collect, integrate, analyse and communicate data to create actionable insights—shifting to more of an ‘analytical/consultative’ broker
Click for the full report in PDF: “Broking 2020: Leading from the front in a new era of risk”
Related: Hannah Bender of PropertyCasualty360 summarizes and comments this report: Are you prepared to tackle a new era of risk? Her summary has relevance to the Renaissance Alliance model in its approach to scale:
According to the PwC survey, “Clients are essentially asking for three things: What risk can you help me to understand better, how can you help me to grow my business, and how can you help me transfer risk through traditional or capital market means at a price I can accept,” said Dominic Christian, executive chairman of Aon Benfield International. “There are few brokers who have the scale, licenses and analytical capabilities to answer all three of these questions.”
Many small brokerage firms may lack the scale to develop advance capabilities in house, so it is important for them to find ways to pool resources or access market-wide information services.