Why the Cheapest Insurance Broker May Not Be the Most Valuable One

Insurance brokers operate in a highly price-sensitive market. When premiums rise, clients naturally question the cost. When the market softens, brokers are expected to demonstrate that they have obtained competitive terms.

But recent research suggests that price may be less important to commercial clients than brokers sometimes assume.

A new survey commissioned by Worldwide Broker Network in partnership with MarshBerry, covering 1,000 European C-suite executives, found that 55% of UK respondents cited quality of service as a key factor when selecting an insurance broker. Innovation, digital tools and data capability followed at 45%, while price and total cost of risk ranked third at 35%.

Perhaps even more importantly, 42% of UK respondents said their insurance partners were not sufficiently consultative or proactive.

That presents an interesting challenge for brokers.

If clients say they value service and advice more highly than price, are brokers measuring and managing the right things?

Price still matters - but it cannot be the whole proposition

No broker can ignore price.

Particularly in the current soft commercial market, substantial premium reductions are available in some classes. Insurance Age recently reported examples of comparable commercial risks receiving premium reductions of 40%-50%, with some individual clients saving six-figure sums.

A broker clearly has a responsibility to test the market and make sure clients are receiving competitive terms.

But winning or retaining business solely because a premium is cheaper creates a fragile relationship.

If the main reason a client joined you was a lower price, another broker may eventually take the client away for exactly the same reason.

The more valuable relationship is one where the client believes the broker understands the business, anticipates risks, provides useful advice and performs when something goes wrong.

Saga provides an interesting example

Saga’s recently published results illustrate the difference between simply growing volumes and improving the economics of an insurance business.

For the six months ended 31 July 2026, Saga’s Insurance Broking division reported:

• Underlying revenue of £71.7m, up 12%;
• 1.3m policies in force, up 5%; and
• underlying profit before tax of £15.9m, up 75%.

In other words, policy numbers increased modestly, but profit increased substantially faster.

That is an important distinction.

The objective of an insurance business should not simply be to process more policies. It should be to build a client proposition that produces sustainable and profitable relationships.

Saga’s results also reflect a broader change in its operating model. New motor and home business has transitioned to its long-term partnership with Ageas, while the group continues to simplify its insurance operation and broaden its proposition into areas including pet insurance.

The precise economics of Saga are obviously very different from those of an independent regional broker, but the underlying lesson applies equally well.

Not all growth is equally valuable

Imagine two brokers each generating £1m of commission and fee income.

Broker A competes aggressively on price. It quotes widely, wins significant new business and loses significant amounts at renewal. Account executives spend considerable time remarketing policies and replacing departing clients.

Broker B has slightly fewer new-business wins but exceptionally strong retention. Clients receive regular risk reviews, claims support and proactive advice. The business cross-sells successfully and generates more revenue from each client relationship.

Both businesses might initially report similar revenue.

But their economics could be very different.

Broker B may have:

• lower acquisition costs;
• stronger retention;
• greater income per client;
• higher staff productivity;
• more predictable recurring revenue; and
• ultimately higher EBITDA.

And those are precisely the characteristics likely to make a brokerage attractive to a purchaser.

Measure the things clients actually value

If service is genuinely an important reason clients choose and retain their broker, it should appear in management information.

Alongside GWP, commission and new-business income, brokers might measure:

Client retention - both by number of clients and by revenue.

Proactive client contact - how many clients receive a meaningful risk or insurance review during the year?

Claims satisfaction - what happens when the product actually has to perform?

Response times - how quickly are enquiries, quotations and claims issues dealt with?

Cross-selling - how many relevant insurance needs are being met?

Referrals - are existing clients sufficiently happy to recommend the broker?

Revenue per client and revenue per employee - is good service translating into a commercially sustainable business?

The financial measures remain essential, but they are often lagging indicators. Client service, retention and proactive advice are the behaviours that ultimately produce those financial results.

Service and profitability are not opposites

There can sometimes be an assumption that delivering better service simply creates additional cost.

It does not have to.

The challenge is to identify the elements of service clients genuinely value and combine them with efficient processes and technology.

Administration, data entry, renewals preparation and reconciliations can increasingly be automated.

The time released should allow brokers to spend more time doing the things technology is less capable of replacing: understanding the client’s business, identifying emerging risks, advising on coverage and supporting clients through claims.

That should ultimately produce both a stronger client proposition and a more profitable brokerage.

The question for broker owners

The WBN research provides a useful reminder.

Clients appear to be saying:

“Don’t just find us a cheaper insurance policy. Help us manage our risks and look after us.”

Saga’s results provide another reminder:

more policies do not necessarily create the most value - improving the economics of the relationships you already have can matter much more.

For broker owners, the question therefore shouldn’t simply be:

“Are we competitive on price?”

It should also be:

“Are we delivering enough value that price isn’t the only reason our clients stay?”

At SWLA Accounting, we work with insurance businesses to build management information that goes beyond headline GWP and commission income, helping owners understand the real drivers of retention, profitability and business value.