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Streamline Your Employee Benefits: Why Focusing on One Insurance Broker is Key
Many companies believe that engaging multiple insurance brokers will guarantee them better deals. However, this strategy often backfires, leading to inefficiencies and missed opportunities. In fact, companies that streamline their insurance with a single trusted broker see better results for both their coverage and their bottom line. Here’s why companies should reconsider using multiple brokers at once:
Dilution of Efforts and Focus
Imagine trying to hold a conversation with ten different people at a party—chaotic, right? The same can happen when you work with several insurance brokers. When brokers know they are competing with others, their efforts might be less focused, resulting in half-hearted outcomes. Brokers are more likely to dedicate their full attention and resources to clients who rely solely on them, ensuring the best possible coverage and benefits for their specific needs. Don’t just take our word for it—many clients have experienced the benefits of consolidating their insurance with a single broker. One such client shares their experience:
"As a boutique broker, they were able to give us even better service compared to a big broker.…… With this confidence, we had no doubt letting Cléma handle not only our Employee Benefits Program but also all our other risks, including Fire, Commercial All Risk, Work Injury, Business Interruption, Burglary, Public Liability, Machinery All Risk, Motor, Fidelity, and Money Insurance."
Conflicting Strategies and Mixed Messages
If you’ve ever played a game of Telephone, you know how messages can get distorted. Similarly, different brokers often have varying strategies and approaches, which can create inconsistencies in how your company's employee benefits strategy is communicated. Having a clear, unified message is crucial when negotiating with insurers, and working with multiple brokers can lead to confusion and conflicting strategies.
Limited Negotiation Power
In a scenario where multiple brokers approach the same insurers for quotes, insurers typically offer the same price to all brokers. This limits opportunities for negotiation, as the pricing becomes standardised. A single broker, on the other hand, can better advocate on your behalf, leveraging your entire employee benefits portfolio to negotiate more favourable terms.
Increased Costs and Inefficiencies
Working with multiple brokers often leads to higher administrative costs. Each broker requires compensation for their efforts, even if they do not secure the final deal. This can result in duplicated work and unnecessary expenses. By consolidating efforts with a single broker, you avoid these extra costs and ensure that every step taken contributes directly to your insurance and benefits goals.
Strained Broker Relationships
Building a strong relationship with a broker requires trust and collaboration. Engaging multiple brokers can strain these relationships, as brokers may feel undervalued or less invested in the long term. By working closely with one broker, companies can foster a more productive and trusting relationship, ensuring their needs are fully understood and prioritised.
Conclusion
Relying on multiple insurance brokers may seem like a good strategy, but it can lead to inefficiencies, conflicting messages, and missed opportunities for negotiation. By focusing on one trusted broker, companies can streamline their efforts, maintain consistent strategies, and negotiate the best possible insurance coverage and employee benefits. It’s an approach that ensures clarity, focus, and ultimately, better results for both the company and its employees.
By Margaret Ferté, Chief Executive Officer, Cléma Risk Solutions
SOURCE: Cléma Risk Solutions