When should a broker challenge a client?

Broker Strategy

By Bethan Moorcraft

Every broker faces it sooner or later: when do you tell a client they’re wrong?

The question came up during a panel at the RIMS Canada Conference in Quebec City last month, where risk managers had a clear answer: more often than brokers might think.

Paul Bains, associate director of corporate and capital insurance services at the Greater Toronto Airports Authority (GTAA), wants brokers to stop “transacting on what the ask is” and to “really think outside the box and bring solutions forward.”

Few insurance buyers in Canada carry a load like his: a 47-million-passenger airport, by GTAA’s 2025 count, with a multibillion-dollar construction program running through live operations.

At that scale, an order-taking broker leaves the client to find the weak spots alone. Bains needs partners willing to challenge his assumptions and propose tangible solutions before a loss exposes the gaps.

Strip out the scale, and brokers will hear the same expectations from clients of any size.

Guide, don’t rubber-stamp

Victor Dhir, SVP, risk and insurance at Brookfield Asset Management, framed it differently.

“Rather than challenging, I would say guide,” he said. The broker’s job, in his view, is to steer the client strategically.

“I’ll be the first to admit there’s a lot I don’t know,” he said. In sectors like data centres, utilities and energy, he expects his advisors to bring specialist expertise to the table.

That includes telling a client when they’re wrong. If a client questions why terms available on the utility side aren’t offered on the energy side, for example, a good broker should explain why that comparison is misguided.

“It’s a partnership,” he said. “Partners work together if you’re able to keep each other in check. It only works if it’s 50-50.”

Risk managers in the audience agreed. “Tell me about new products. What’s an advantage to me? What’s a disadvantage?” one said. “I don’t want to sit there and have you rubber-stamp what I choose.”

Why brokers hold back

Grant Williamson, president of Willis Canada Inc., acknowledged that brokers sometimes get “caught up in wanting to always please their clients.”

There’s good reason for that.

Broking is competitive, he said, and in a crowded market a client can always bring in another broker. “But it’s good,” he added. “It’s good to have choice as a client.”

For a smaller brokerage, where one lost account can make a real dent in the book, that competition hits harder. It can make brokers hesitant to challenge a client, particularly if they worry that disagreeing could damage the relationship.

Williamson believes building trust is essential, and experience helps too. “If you can actually challenge [clients], that builds a better relationship,” he said.

Candour cuts both ways

So how does a broker earn the right to push back?

Knowing the client’s business is the baseline. Beyond that, it comes down to candour: being willing to give advice openly and fairly, even when it’s unwelcome, and trusting the relationship to hold.

Like any true partnership, that candour has to go both ways. “I wish brokers would be a bit more forthcoming with the information of what some of our competitors are doing,” Bains said.

“There seems to be this hesitation ... to share that information. We’re not asking [brokers] to call out names or share confidential information, but you certainly can speak to it at a scrubbed level.”

Bains reports into finance, where he’s often asked what organizations of similar size and exposure are doing with their insurance programs. Brokers who work with a wide range of large clients are in a position to share what has and hasn’t worked, he said.

“As a client, we’re expected to share our financials, our manuals, our safety, a lot of in-depth company information […] but I feel like sometimes that’s not reciprocated,” he said.

The best brokers have found the line between protecting confidentiality and sharing what they know, according to Williamson. Plenty of brokers handle the transaction well, he said, but experience across industries and clients is wasted if it stays in the broker’s head.

The conversation he’d like to see goes something like this: “Look, I’ve seen this before. Here are a couple of thoughts to think about. Might not be the path you choose, but you still need to offer those paths.”

Beyond the renewal

The panel was discussing some of the largest insurance programs in the country, but the lesson scales down.

A broker whose book is full of contractors, restaurants or small manufacturers has what Bains is asking for: a view across many clients that no single client has. Telling a business owner what similar firms did after a water loss, or why a cheaper quote leaves them exposed, is the same scrubbed-level insight at a different size.

The renewal pressure is familiar at every size of account. Responding to Williamson, one public-sector risk manager in the audience said the broker relationship is still “dead transactional,” and stays that way until there’s real trust.

As a public-sector buyer, he has to take the insurance program to market every few years. When he does, he tries to downplay the price and focus on what the broker has done for the organization.

Often, that comes down to a broker willing to say, “This is a really bad idea,” or “This is a really good idea.”