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At the heart of the report’s methodology was a simple question, Scott said: “what does good look like?”. The research rated brokers across three key structures – profitability, growth and productivity. Seven firms picked up a Broking Gold Award for 2022, while Miller Insurance Services came out top for the second year in a row.
“Looking at the report I think what stood out for me across the top performers was the sustainability and consistency they had in their results,” Scott said. “A few of the companies lower down saw big jumps up the ranking from the year before, others dipped a bit. But among the top players who received our gold awards, there was a real consistency across really all of them where they’ve been steady in the rankings.”
What sets the top ranking brokers apart from their peers, he said, is that they made small, incremental improvements on a consistent basis. Their success wasn’t down to giant shifts in their revenue, or EBITDA margins, or changes to staffing costs. For Scott, the key takeaway from the results of this research is the need for brokers to embrace a steady and sustainable approach to growth if they want to attain long-term success.
The advice not to be too ambitious might seem counter-intuitive for a broking firm, he said, but the metrics revealed by Insurance DataLab’s research corroborate the success of a slow and steady approach to winning a race. Therefore, those looking to boost their performance should be exploring the small steps that make up a monumental journey.
“The other thing that stuck out for me was that we had some companies further down the ranking who did really well on revenue growth or operating profit growth, or their profitability had been really stand-out in one year,” he said. “But for the top performers, it was that productivity element… that was quite high on all of our gold award winners. The fact they had high efficiencies and a high productivity level is what enabled them to make those small gains each year and stand out at the top.”
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The innate value of benchmarking is that it allows a business to discover new ways of achieving the best possible performance. Exploring the top insights generated by the latest Insurance DataLab broking report, Scott highlighted that while broking is and will continue to be a people business, technology is becoming increasingly important to the way that business is carried out.
“But the key here is the need to apply technology in the right way, and not just for the sake of applying technology,” he said. “The way I see technology working is you can bring it in to automate certain processes, and to speed up and reduce the cost of certain operational things – whether that’s at the quote stage or when handling claims. But the key there is that it can free up your staff to really add value to a transaction.
“I think that’s particularly important given the latest regulatory changes around fair value. You need to be showing that you’re adding value at each stage, and technology allows you to take away the boring mundane tasks and allows your staff to do the interesting stuff. That, as an aside, will actually give them greater job satisfaction and help improve staff retention and make the hiring process easier. But crucially, it will also allow you to add value to your clients, which is the key to growing sustainably.”
Don’t just see technology as something that allows you to automate, he advised, but rather something that allows you to automate in a way that adds value to your staff, your clients and the broader value chain.
Looking to the opportunities available in that tech sphere, Scott emphasised the role of embedded insurance and its potential to become increasingly important for brokers. This has traditionally been seen as more of an insurer play, he said, but given the entrepreneurial spirit shown by brokers in the UKGI space, he’s confident of their ability to get involved and create new opportunities for themselves, their clients and their insurer partners.
“I would advise brokers to really look outside the box,” he said. “Insurance is a massive market, but it’s also complementary to a lot of other markets as well. We’ve seen people coming into the insurance space from outside so I believe there could be great opportunities for insurance to diversify its revenue streams and add another string to its bow.”
Insurance businesses need to balance being proactive and reactive to the new opportunities that abound across the insurance sector, Scott said. It comes back to the advice not to be too ambitious but rather measured and motivated, and willing to understand the value in trying out new innovations without investing too heavily.
“Look at these opportunities,” he said. “There’s no harm in dipping your toe into the water and seeing if something will work for your business. If it doesn’t then you can just come out again very quickly if you haven’t invested hundreds of thousands and made a big move into something you’re not sure about. Explore each opportunity, take a small step and grow it slowly. If it’s not right for you then just withdraw before you invest too much time, money and effort…. Failure is not a bad thing if you learn from it and if you haven’t jumped in too heavily to begin with.”