Insurers and brokers are missing a trick when it comes to adding to their income streams in these changing times. Andy Hawkes highlights the failure of the insurance profession to actively promote and deliver risk management solutions to clients who seem happy to go direct – without involving their insurer or broker!

Over the past three years Cardinus has been writing technical articles to help brokers and insurers with aspects of risk management ranging from construction, to fleet and property to ergonomics. We work with many of the world’s largest businesses as well as mid corporates and SMEs, and we deliver a vast range of software and onsite solutions.

And yet, I’m disappointed. Why? You may well ask. It’s because only 6% of our global revenue is generated from insurers and brokers, and whilst this is a great opportunity, it also highlights the failure of the insurance profession to actively promote and deliver risk management solutions to clients who are obviously happy to pay us directly!

I know some insurers carry out surveys, and indeed we launch our own IT-driven insurer, MGA, and broker survey solution this year. But for me, too few brokers either deliver risk management themselves, or refer companies like Cardinus to help clients manage a whole range of risk – many not even covered by insurance policies.

At Cardinus, we believe brokers are better placed than anyone to spend time understanding the risks faced by client businesses. But so often it seems, the focus on commission earning blurs the potential income from expert risk management advice.

A good example is the so called ‘grey’ fleet. With the advent of corporate manslaughter legislation the business use vehicle is one the of main potential sources of work-related deaths, and the non-owned vehicle, used on business, is regarded as the biggest risk as there is less control. Many firms still don’t understand that this is all subject to the Health and Safety at Work Act. Brokers should be advising on this risk, regardless of premium and commission, yet most ignore this.

We want 2015 to be the year that brokers and insurers actively promote, advise, refer, and embrace full risk management for all clients!

And, there’s lots of margin in delivering great expert advice, even if you only refer to a consultancy. At a time when the FCA is looking at commission disclosure, isn’t it the time to sell advice and not just a cheap policy?

Typically a broker will earn 25% commission on software e-learning and online assessments and 10% on on-site audits, consultancy and training when referring business.

But why not take the plunge and train staff to NEBOSH, IOSH levels and take 100% of the fees? Or go even further and develop enterprise or holistic risk management expertise, and support clients across a wider risk management programme.

I recently attended an Enterprise Risk Management course run by IIRSM and it was clear that risks that can be insured are only a fraction of a business’s risk register.

Some of these risks are clearly external and impossible to manage at acceptable costs, and for all organisations profit only exists at the point of risk… after all, that’s how insurers and brokers make a living.

This non-insured risk portfolio does offer profit opportunity to help clients develop risk management systems, and advice on the strategic risk issues in any business will always win and help retain the insurance account!

So, let’s all wake up in 2015 and think risk and think profit!

Contact Cardinus on 020 7469 0200 or email

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