Recession-proof brokers?

This year will be my 25th in insurance and if there's one truism I've learned, it's that broker distribution is an unbeatable business model.

Its resilience, even in times of economic turmoil, is remarkable. Cornell Consulting's Tony Cornell has put a figure on it in this month's Insurance Age magazine: "98% of brokers survived the recessions and lived to prosper ..."

Independent brokers have always found a way to stay on top of the market and they should have pride and confidence in what they do for customers.

The broker's greatest asset is the ability to understand the needs of their customer and make an informed recommendation based on what's right. And, at times like these when individuals and businesses are under extraordinary pressure, one of the most valuable things they crave is the peace of mind that comes from sound advice. This is the moment for brokers to shine.

We are seeing the most astute brokers extend their existing capabilities to help customers cope with the additional challenges of the current climate by focusing on what they do best.

The fact is that customers look to their broker for a high degree of knowledge and expertise, not only in all aspects of insurance but also risk management and the marketplace as a whole. Being the font of that knowledge places brokers in a strong position with their customers, as they compete with a range of other business advisors.

There are some tough messages to communicate to customers right now - not least why premiums need to increase and why risk management needs to move up the agenda. Insurers are reliant on brokers to explain these critical dynamics of the industry that affect us all.

For the best brokers, simply finding the cheapest premium isn't what's at the heart of their capabilities. Their emphasis is on recognising the needs of the customer, which are likely to be very different to last year, and aligning the cover to meet these requirements.

Many brokers already know that they can add tremendous value by tapping into a breadth of additional services insurers offer. Providing guidance on risk management issues, for example, is a good way to help customers tackle the risks facing their business and, at the same time, minimise premium rises.

This consultancy-based approach leverages the unique relationship brokers have with their customers, communicating more than just insurance and, as a result, differentiating them from the rest of the market.

These are the brokers who will shine and ride out the recession and retain more business.