Dr. iur. Daniel Koller, member of 1291 Group Management and President of LIBA was interviewed by HZ Insurance speaking about the importance of attracting new members: “The common goal should be to make the broker’s professional image better known to the public in and outside Liechtenstein and thus to highlight the advantages of client care by a broker.“
Mr Koller: What are your main goals for your new function as LIBA President?
Gaining more members is one of my main goals. Our association is still small and manageable with seven member firms – five of them in the non-life sector and two in the life sector. The entire market in Liechtenstein has 55 registered brokers.
What do you expect from new members?
As new members, we would like to see brokers who, with their competence, experience and expertise, can complement the capabilities and existing field of activity of the LIBA and generate added value for the Liechtenstein financial market.
As honorary leaders, we rely on joint action. Synergies and complementary expertise are desirable.
The common goal should be to make the broker’s professional image better known to the public in and outside Liechtenstein and thus to highlight the advantages of client care by a broker.
Is there a special concern that you would like to achieve for the LIBA members?
My main concern is to promote more respect and understanding. The broker profession is often considered a minor matter, a sort of appendage of the insurance company. Insurance companies themselves regularly treat brokers as an annoying disruptive element or unnecessary intermediate. As an association, we are committed to demonstrating the importance of the broker as a good, reliable partner of the insurance companies and competent advisor of the client. It is even more extreme when the insurer contacts the client directly or even meets the client in person without informing and updating the broker. One can imagine the problems this leads to.
Where exactly is there a lack of respect and understanding?
It happens regularly, that the insurance company sends letters directly to the broker’s clients without the broker being informed in advance. The customer reports to the broker left out in the communication, who stands there ignorant like a fool. This is particularly unpleasant if the contents of the letters are incorrect.
And with regard to supervision?
The supervisory authority regularly publishes guidelines for insurance companies, which are then transferred more or less 1:1 to the broker for the sake of simplicity. Often, completely different modes of operation apply to the insurer and the broker.
For example, insurance companies and brokers have to monitor transactions as part of their due diligence. In this case, no transactions take place at the broker, which logically cannot be monitored.
Where do you see the biggest challenges for insurance brokers at the moment?
Most certainly this is the dense, impenetrable regulatory jungle. As in the entire financial world, the conditions on the market are becoming more and more confusing and, in my opinion, are heavily over-regulated. It has long since ceased to be about consumer protection.
In view of the many regulations, there would be a great need for explanation …
Basically, yes. We are currently in a tough market: insurance sums are being reduced, insurance premiums and deductibles are increasing enormously, capacities are decreasing, coverages are being limited and reorganisations are taking place. In this environment, the service quality of insurers is declining, for example, in the settlement of claims in the non-life line of business. All this with increasing formalities and bureaucracy, which in turn ultimately makes servicing private clients and smaller companies unprofitable. Competent advice from brokers is more important than ever.
With Covid-19, a new risk has been added. How do brokers deal with it?
Brokers generally did not have any enormous restrictions during the Corona period. Only the cultivation of contacts suffered because personal meetings and social occasions were clearly in short supply.
And with regard to the customers?
Some risks, such as damage caused by the Corona pandemic, cannot currently be insured at all. Insurers have even started to exclude communicable diseases as far as possible in all business insurance policies coverage. The broker can only ensure that these exclusions are somewhat cushioned by appropriate wording.
There are more and more standard insurance policies that can be purchased online at the click of a mouse. What will brokers focus on in the future?
Despite digitalisation and the internet with free access to information, many customers still value personal advice. Put simply, the broker always comes into play when it comes to complex and individually adapted or special insurance solutions.
In Liechtenstein in particular, we often have to deal with an internationally oriented clientele. Cross-border constellations and language challenges are part of our daily business.
Where is advice from brokers in particular demand today?
Independent brokers see themselves as representatives of the clients’ interests. We accompany them from the initial advice through ongoing support to claims settlement and also in special situations. Increasingly, new services such as comprehensive risk management are also being offered.
Especially in times of the hard market, the services of brokers are in great demand and the need for advice is high. This is also true for the corporate business. Most SMEs use broker services.
How do you perceive the Swiss market?
A peculiarity of the Swiss market is the very good penetration of local agencies of the insurers and thus the proximity to the customer. Trust and competence in personal conversations are still very important.
What contacts does the LIBA have with the Swiss Brokers Association SIBA?
All members of LIBA also have a presence, cooperation, or representative office in Switzerland. Various members of LIBA are also members of SIBA through its Swiss presence.
Until recently, there was no exchange at the association level. When I became LIBA president, I simply took the initiative and contacted my Swiss colleagues. And now there is a constructive dialogue between the presidium of SIBA and LIBA, which we want to intensify further in 2022.
Both associations can complement each other well. Among other things, SIBA scores with its size and professional structures, while LIBA has the best knowledge of European standards and framework conditions.
Do you expect consolidation tendencies in the broker market in the next few years?
Absolutely, the trend is clearly going in this direction. Brokers will merge, while others will give up their licenses. As a result, the market will probably lose some of its dynamism and the increasing regulatory density will slow down the processes even more. On the other hand, the quality standard of the market participants will probably increase.
Original article available only in German: https://www.handelszeitung.ch/insurance/broker-liba-prasident-daniel-koller-kompetente-beratung-ist-wichtiger-denn-je