The Link Between Insurer and Client: The Art of Insurance Brokering – Joachim Caspersz

“40 years is a long time to spend in a profession, but that is what I seem to have accumulated”, said Joachim Caspersz, the Director/Chief Executive Officer of George Steuart Insurance Brokers (Pvt) Ltd, on his long career in the Insurance industry. 

“I began my Insurance career in 1980 as a Trainee Executive with Aitken Spence & Co Ltd, working in what was a Principal Agency for the then National Insurance Corporation, which was a novel concept. In 1987, I moved to what was to become one of the first, and among the most successful, Insurance Brokering houses in Sri Lanka. Ten years later, I joined Finlays Colombo Ltd. Finlays was also a successful and leading Insurance Broker, and after some years I moved onto the main Board of the Company, overlooking its non-tea businesses in addition to handling Insurance Brokering. In 2018, with Finlays exiting their non-tea businesses, I moved to George Steuart Insurance Brokers (Pvt) Ltd to help re-launch the Insurance Brokering subsidiary.”       

In addition, Joachim has been a Rotarian, a competent Toastmaster, an office bearer of the Sri Lanka Insurance Institute, a past President of the Sri Lanka Insurance Brokers Association, and, as a burgher, is very much a part of the Dutch Burgher Union, which is his ethos. “Most of all though, I fell in love with Trincomalee, whilst posted there as a Branch Manager (in my salad days) and I believe it is one of the best places on earth. It is my muse and my heart.”

Describing his first impression of Insurance Brokering, Joachim explained, “I fell into working for Insurance intermediary services quite by accident. However, I quickly found it interesting, because to be able to advise a client, you need to understand his/her business, its inner workings and how Insurance can help economically transfer risk. Risk is also much a part of an individual’s everyday life. Therefore, as a Broker one has a wide spectrum of involvement – from an individual’s personal requirement to the complex risks of a corporate entity. It is quite possible during a day to be sitting in the plush boardroom of a “Corporate” discussing risk management and risk transfer mechanisms, and later in the evening to be sitting with a newly married couple in their rented house talking about Life Insurance. Very few professions have this breadth of exposure, and for a young executive it was exhilarating and challenging.”      

Speaking about the role of Insurance Brokering in the Sri Lankan Insurance industry, Joachim stated, “Insurance Brokering is an essential service in the Insurance transaction. The relationship between the Insurer and the person or entity purchasing Insurance can be very one sided as the Insurer knows intimate details of the Insurance policy and how the mechanism of Insurance works. The purchaser has, at best, a rudimentary grasp of Insurance. The Insurance Broker (an Insurance professional on par with those in the Insurance company) corrects this imbalance – at no cost to the purchaser. An Insurance Broker is a professional in the industry, and has a team supporting its operations, which is made up of members who have an intimate and thorough knowledge of the inner workings of the Insurance industry, and sound relationships with all local Insurers and, frequently, international partnerships as well. All of this is at the disposal of the client. 

Currently, Insurance Brokers are involved in the General Insurance (non-life) segment of the market and command a market share of about 25%. Many corporates and more than a few individuals use the services of a Broker. A major failing though, is that the services of a Broker are still not fully understood in the market and the use of an Insurance Broker should be more widespread than it is in Sri Lanka. In the life segment Insurance Brokers command considerably less than 1% of the market, mainly due to constraints in distribution costs. Insurance Brokers can and do provide solutions to Insurers as well, in terms of Reinsurance arrangements, which may be required by the latter.” 

According to the veteran Insurance Broker, the 3 primary benefits that come with Insurance Brokering are –

  • Cost effectiveness of an Insurance program. 
  • Better/practical arrangement of an Insurance requirement.
  • A professional on your side when you need advice, especially when you have a claim – at no extra cost. 

When questioned about the greatest challenges faced by the Insurance Brokering sector and the best means of overcoming them, Joachim replied, “To my mind there are two main issues. Firstly, as already referred to above, there is a lack of knowledge in Sri Lanka about the essential efficacy of an Insurance Broker. To address this vacuum, Brokers need to raise their profile in the market whilst the Insurance Regulator too should assist in the exercise. Insurance Brokers need to be more visible than they are. 

Secondly, there has been a rise in informal channels where Insurance products and services are being bundled and sold along with other services and products. This is forced selling and not in the interest of the consumer as they are merely a conduit to the seller earning a commission. There is no value addition at all in the relationship. Here, the issue is the element of compulsion the seller brings to the transaction. This (compulsion) must be removed from the transaction. The Regulator has brought into play several directives to control these transactions, but the mechanism needs enforcement.”    

“It is all about knowledge, relationships, and value addition. Success, though, is a relative term and is frequently a moving point. Each Broker needs to define for itself what success means for its business. At GSIB we want to be the best we can be, on par with the services and solutions provided by the global giants. And, of course, have belief and passion in what we do. At the end of the day it is all about our people”, said the CEO, speaking of the makings of a successful Insurance Broker.    

On the topic of the impact of the ongoing pandemic upon the Insurance Brokering sector of Sri Lanka, Joachim disclosed, “When the lock down followed by the curfew was imposed in mid-March 2020, Brokers were initially flummoxed. March is a heavy month in terms of the volumes of business transacted. Nonetheless, they innovated nimbly, operating on various virtual platforms to interact with clients and Insurers, and deal with the Insurance portfolios, which needed placement. This was successfully accomplished. Subsequently, Brokers negotiated with Insurers for online documentation, quotations, claims and claim settlement. Many Brokers also commenced using digital and social media to get the message across to existing and potential clients about their services and offerings.”   

He further added, “Two main issues remain – the collection of premiums (with the slow down in the economy, payment of premiums has been put on the back burner by clients), and development of new business. Regarding the former, if premiums are unpaid, Brokers’ commissions are delayed by the insurer and cash flow will be difficult. Development of new business is challenging as well because whilst Brokers have moved into the digital space a lot more needs to be done to ensure viable growth.” 

“Belief”, responded Joachim, when asked what defined George Steuart Insurance Brokers. Moving on to elaborate, he imparted, “George Steuart, the parent company of GSIB, is the oldest commercial establishment in Sri Lanka, having been formed in 1835 and with an informal history going back even further in time. From the 1850’s it has always been involved as Insurance intermediaries, representing legendary British underwriters of yore. Today, GSIB is among the fastest growing corporate Insurance Brokers in the island whilst also providing solutions to individuals. The subsidiary prides itself on its professional expertise, a strong belief in long-term relationships and adding value to its customers and principals, and above all a belief in its people. GSIB has strong relationships with all Insurers in Sri Lanka and a network of partners, which span the globe. It is also ISO 9001:2015 certified.  

Some years ago, whilst working for another company, a colleague and I happened to be in the Maldives. One evening, we split up, he to a distant resort by dhoni, whilst I remained behind in Male, the capital city, for some other appointments. A couple of hours later I got a call from my friend saying that he was in the middle of a terrible storm and that the boat was taking in water. He then proceeded to rattle off various instructions (with the storm raging in the background) about what to do with the client if he did not make it out alive. That is the epitome of belief.”

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