The recent pandemic and the natural catastrophe that hit a few Australian states this past year are proof that the business environment is rife with risks. Your ability to identify, mitigate, and plan for risks could mean the difference between the survival and the downfall of your business. Make sure to work with insurance brokers to ensure the former by boosting your risk resilience.
What Does an Insurance Broker Do?
Insurance brokers (like Midland Insurance) offer the expertise that benefits businesses, big or small. Since all businesses are exposed to risks, it’s not about whether you have a robust risk resilience strategy that will guarantee your survival. It’s about what type of methods you employ to boost resilience.
On the surface, it appears that insurance brokers only offer expertise in purchasing an insurance policy. You already know about the value that insurance brokers offer in aligning your business risks and needs with the available policies. While this is certainly a valuable offering, the pivotal role of brokers goes beyond insurance opportunities. The role of brokers for businesses is more critical because they can also identify key loss drivers, assess existing coverage, and identify gaps. With these insights, brokers can make informed decisions on managing and mitigating risks before they happen.
With the risk ecosystem still hanging in the balance (as most businesses have not fully recovered from the pandemic and the flooding in Australia yet), insurance brokers can work closely together with business risk managers. These two roles are critical to minimising the impact of risks to the business without necessarily increasing the cost of your policy or coverage.
Needless to say, insurance brokers act as safeguards and anchors to your risk resilience plans.
How Do Insurance Brokers Help With Building Resilience?
There are several ways wherein brokers can help businesses thrive despite risks and develop higher resilience.
- Building Awareness and Education
The primary role of an insurance broker is to educate and build awareness for their clients. For business clients, a broker can provide insight into the potential financial impact of flooding or any natural disasters. Many Australian businesses have to deal with the reality and risks of these natural hazards and it opened their eyes to ways that they can use the expertise of a broker to reduce the total amount of damage, or cost of insurance.
The insurance industry, in general, is well-positioned to educate consumers and clients. Brokers can use their knowledge and experience in viewing different models of hazards that present themselves to businesses. As a result, businesses can formulate different approaches for each type of hazard to mitigate the associated costs and implement better resilience strategies.
Brokers do not just help clients with finding the right insurance policy, as already mentioned above. They also help with improving infrastructure, resource management, financial security, and so on. These are all steps that enable businesses to reduce insurance premiums and lower the potential damage if a perceived threat does occur.
- Manage Operational Disruptions
Even if businesses do manage to prepare for any potential risks or disasters, the possibility of operational disruptions can still lead to major financial losses. Brokers also play a pivotal role in managing this type of crisis. Any disruption to your critical business functions translates to financial losses. It could also lose the trust of customers.
Therefore, ensuring business continuity during times of crisis (whether affecting the business alone or the entire business environment) is critical to reducing the negative impact of any event. With the expertise of a broker, businesses can stay open or aid with filing insurance claims when they are forced to close.
- Brokers Encourage Businesses to Adapt
Building resilience requires professional and expert guidance. Insurance brokers are well-versed in risk management because that is the nature of the insurance industry. Identifying and planning for risks are part and parcel of working with a broker. They encourage you to come up with fast yet efficient solutions or help with making crucial decisions that impact the organisation’s future.
In this way, insurance brokers are enablers of building resilience.
Key Takeaway
Insurance brokers will shape the future of risk resilience for businesses. With the ever-changing risk ecosystem, their expertise will prove vital in minimising the impact of those risks on businesses. On the other hand, this means more responsibilities for insurance brokers to come up with more efficient risk strategies using traditional and innovative methods to match the correct insurance policy for clients. In addition, brokers must learn to embrace new technologies and take advantage of them to manage risks without losing out on opportunities for growth and scalability.
