Brokers must educate clients about risk rather than only discussing price, according to Macquarie Premium Funding CEO Gary Seymour.

“I get sick of people saying, ‘Can I give you a quote for your insurance?’ instead of saying, ‘Can I talk to you about your exposures?’,” he told the Australian and New Zealand Institute of Insurance and Finance (ANZIIF) executive breakfast series in Melbourne last week.

“The reason the clients don’t buy the covers they want is because we don’t keep talking to them about it.”

If consumers want “cheap and nasty” policies they can get them elsewhere but “brokers have to add value”, he says.

He points to websites such as ANZIIF’s knowrisk.com.au, which helps customers become better informed before they go to brokers, and online authorised representatives such as expressinsurance.com.au, which may provide lower quotes.

“Don’t think you hold all the power any more,” he said.

Mr Seymour advises being open to social media, because consumers place more value on what friends say about insurers than they do on advertising campaigns.

“The myth is that only the bad stuff comes out on social media but people say good things too,” he said.

CGU Chief Underwriting Officer Darren Maher told guests the industry must work to help communities understand risk, so they can decide whether to accept or mitigate it.

Insurers also need to be clear about what risks are and are not covered.

Mr Maher says CGU “learned a lot” from the Brisbane floods. It now provides mandatory flood cover, asks customers how often and through which channels they wish to receive communication about claims and has launched a new claims centre.

“We are well prepared to handle another flood, but I hope it never happens,” he said.