The rules for brokers are changing to accommodate new market realities, according to leading underwriting agent Roy Ellis. Speaking to a NIBA seminar in Melbourne titled “Broking in a Hard Market”, he said the industry’s systems and practices are now much more sophisticated than they were in the 1980s.

Mr Ellis said the Australian insurance industry has been dragged into the international arena, which has completely changed the way we work. Describing the global insurance scene, he recalled the many changes the market has experienced since the ’80s. “In the ’80s cover was sold as if we were talking about a bottle of milk,” he said. “Every risk was rated at the same level.”  

Now there is a new regime where the market is forced to impose international rates, and there is no longer room for Australian insurers to squabble over a relatively small slice of the global insurance cake. “Under this tougher regime, brokers need to get used to working with underwriters,” he said.  

While brokers struggle to deal with the tough market situation, there are “some great opportunities out there” for those brokers who are attempting to do things properly. In the meantime, there’s plenty of risk business looking for a home. “We get three reams of paper a day in our office [Inter-Pacific Underwriting] and the four staff and myself are inundated,” Mr Ellis said.

But many brokers will have to adapt to the requirement for more information to get the best out of the business bonanza. He said many brokers are cheating themselves through their lack of preparation when they submit their slips to underwriters.

Badly prepared slips have an 80% chance of not going anywhere, he said, adding: “Put together a slip that will encourage the underwriter to say yes the first time.”  The lack of information that he sees in some slips is “amazing and detrimental to the livelihood of brokers”.

“It is in the interests of brokers to make sure that all staff in the offices, especially young staff, are trained and know how to submit slips,” he said. Otherwise, he said “they are wasting their time and your money.” 

Emphasising that “the window of opportunity is wide open at the moment ”, Mr Ellis urged brokers to concentrate on “making some real money in what many are happy to label tough time”. He said brokers should resist the temptation to write everything that is offered, as this kind of work ethic is not always good business. “Find reasons why the underwriter should write the business, and remember that presentation is important.”