Brokers and the broader general insurance intermediary sector are most upbeat about their prospects for this year, according to a Macquarie Bank business sentiment survey.

About 89% of the 112 intermediaries – which also includes underwriting agencies – who took part in the survey say they have a positive outlook, marginally higher than legal (88%), built environment (87%), strata (85%) and real estate (82%).

The sector’s level of confidence is also stronger than the overall 71% score tabulated by the Macquarie Bank Business Barometer survey of the diverse panel of nearly 1800 business leaders, carried out in December last year.

Macquarie Business Banking Head of Insurance Segment David Ball says the results show the sector has withstood covid-related pressures and other challenges despite the interruptions to their businesses.

About 51% of insurance intermediaries say they have invested in technology as part of changes to their operations during the pandemic, 57% changed how they interacted with customers, 34% worked on reducing business costs and 46% invested in systems and processes.

“Insurance intermediaries have shown remarkable resilience over the past few years, with the majority saying they have adjusted well to the covid-19 disruptions, without any significant change to their business, with the current hard market conditions providing both challenges and opportunities,” Mr Ball told insuranceNEWS.com.au.

He says operational efficiency looms as a major challenge for brokers and agencies, based on feedback from the sector.

“We are hearing from brokers that the ease of doing business is at an all-time low, both on the placement side as well as claims,” Mr Ball said.

“As it relates to placements, shifting insurer appetite and increasing premiums are resulting in difficult conversations on both sides of the equation for brokers.”

He says brokers are also setting aside more time to help clients with their claims, which have grown in frequency due to recent weather events and increasingly complex claims such as cyber and business interruption.

In other key findings from the survey, 27% of general insurance intermediaries are expecting net profit margins of 21-30% for the FY2022 financial year and 21% are projecting margins of more than 30%.

About 85% say they provided flexible working arrangements to manage staffing challenges during the pandemic and 37% gave wellbeing support measures. Around 38% increased their compensation or benefits and a similar portion say they increased training and development.

“Covid-19 and remote work have presented both opportunities and challenges for brokers,” Mr Ball said. “Brokers need to determine how they can take the positive elements, including increased wellbeing and productivity, while mitigating against reduced capacity for collaboration.”

While video conferencing and other remote working tools have helped the sector during the pandemic, Mr Ball cautions against relying entirely on technology to interact with clients.

He says technology solved the immediate challenge posed by covid but points out it can’t serve as a “permanent substitute for face-to-face relationships”.

“Insurance broking is relationship driven and this has been more difficult during covid-19,” he said. “Brokers have also had to rethink the way they engage with clients and the customer experience they’re delivering.”

Click here to read the survey report.