Insurance broker’s clients range from individuals and small business owners to large corporate and multinational firms. The services involve the following:

1. Brokers can build personal, trusting relationships with clients. Unlike insurers’ agents, brokers are not aligned to insurers and rather, advocate for their clients’ interests. Across a range of measures, brokers are found to offer a higher-quality service and a better product fit for their clients than insurer-aligned agents. 1
2. Brokers can provide clients with tailored risk-management solutions. On average, 40% of clients are underinsured or not insured at all, before engaging a broker. 2
3. Brokers facilitate competition in the insurance market, supporting client choice. When asked about their newest client who had not previously used a broker, 90% said that their client previously had an inappropriate level of insurance for their level of risk.10 While only 1% of brokers’ new clients were overinsured prior to engaging broker, 33% of clients were previously paying more on their insurance policy before they engaged broker. Brokers also support clients in accessing a greater number of policies and insurers – in 2019, the average NIBA broker member placed business with more than 10 different insurers. 3
4. Clients can save resources by engaging brokers to navigate a complex sector. In assessing the client’s risk, comparing insurer offerings, applying for cover and completing an annual review, a broker saves a client an average of 11 hours.10 Based on a standard measure, this is estimated to save the client almost $300 per annum in the value of time saved. This equates to more than $230 million in total value per annum across all business customers.12 Additional savings would be expected for clients on other policy types sold by brokers.
5. Brokers can support clients in making insurance claims. On average, brokers estimate that they save clients 2.5 hours during the claims process, with 41% of SME clients agreeing that their claims process would have been ‘much harder’ without the support of a broker. 2
6. Brokers can educate their clients to manage and avoid risks. This supports clients’ confidence in their risk management processes. Providing this confidence is important given that brokers believe 62% of clients have a partial or very limited understanding of the extent of the risks they face. 2

Brokers bring clients a range of benefits. As in any market, not all clients receive their preferred outcome and may not always be fully satisfied with their brokers. However, the findings of this report suggest that, on balance, clients report that they receive a valuable service from their brokers. While brokers charge a commission or service fee, which represents a cost to clients, findings suggest that for many clients, the benefits outweigh these costs. This chapter seeks to identify and assess the benefits to clients of working with brokers. 4