My life runs smoothly owing at least in part to the regular currency of International flights.

So I have recently come to realise.

You may have noticed I’ve not posted for over a month now, which must certainly represent the longest gap in RiskHeads coverage ever.

You see, I *was* stuck in Paris, but now I’m stuck in England.

Owing to an Act of God I had hitherto thought only affected ancient Romans and ski chalets, pretty much the whole of European airspace was closed for a week after my recent holiday should have finished, leaving me with no way to return to the Italian office. But of course you all know about Iceland’s charming Eugimmyflip volcano.

During my incarceration in that Paris hotel, there were French people in a nearby cell who could not return to their homes in northern France owing entirely to the land-based exodus from Paris flooding every route out: trains, hire cars and taxis had suddenly become a celebrity item.

And most of the US and UK travel pros I found in the lobby each morning were far more dedicated to the ticket search than I: they didn’t seem to sleep, preferring a continual supply of coffee, Skype, VOIP and Google.

What hope did I have of getting out? Or so I asked myself. And thus I extended my stay, having now just returned from the longest Paris trip I expect I shall ever make: 15 days. If you ever need a tour, I’m your man. I must now be one of the few people on the planet who can boast having studied properly more than 50% of the almighty Louvre.

In the end I opted to go to the UK instead of Italy, via Eurostar; it was all I could do. Now finally back at work and after an intense round of research and insurance software development, I’m finally back on top, and I think due to renewed energies after my break this next SchemeServe software release at ADM looks more exciting than ever; I’m really looking forward to it.

And so on this happier note, this morning I prepared to return to the Italian office, leaving home in Cambridge at 4am. And guess what? British Airways are poised to strike AGAIN, and that @&£#%*¥ dust cloud is back.

Only this time, BA’s website told me not to bother turning up for my flight at 8am: the flight information said it was delayed until 11:35, and phonelines were engaged this morning right up until 8. Hmmm, I thought, can I trust this information? I checked the BA iPhone application and it showed the same data, this time with the additional line of information to read “Re-warn 11:35″, whatever that means. So, with no humans about and their phone line telling me to check BA.com for the latest info: what was I supposed to do?

I chose to only half-trust them, and left home in time to arrive at Gatwick about 7:30; hopefully then if the flight really did leave at 11:35 I wouldn’t be waiting around too long, and I would be in with a chance of catchng the original flight if BA were openly lying to me.

Which they were.

On the way, I received a call from a friend to say the website and app were updated to remove the second line of info about the flight, BA effectively erasing history: instead of showing a second flight time change, they removed the first. Very sneaky.

In the end, Gatwick was so traffic ridden that I arrived ten minutes before the original flight time, the flight left without me – despite BA staff at the terminal still insisting until the very last second that the flight would not leave before 11:35 – and I was left with no option but Customer Services.

I’ll spare you the ensuing battle I had but the conclusion is that I might be allowed to sample this jolly fiasco all again for tomorrow’s dawn flight, when BA’s strikes are due to start.

I think I might just walk to Sicily this time. It might be quicker, and would certainly save a few bob.

Dust cloud ‘n strike flight risk insurance anyone?

A

Have you had a similar experience recently? Let me know, leave a comment below!

UK company Hiscox have issued a statement today that their losses from the devastating Chile earthquake could be a whopping £100 million worth.

This follows hard on the heels of a similar joint announcement from Munich Re and Swiss Re that losses for the insurance industry as a whole would likely be $7 billion.

It’s interesting to note that while Munich Re and Swiss Re attested that reinsurance prices would not increase, the Hiscox statement on the other hand notes that reinsurance rates would change.

Amazingly a single gang of travellers are said to have been the root cause of 47% of all insurance claims for caravan theft.

The BBC cite the Wiltshire gang as having been responsible for – wait for it – HALF of all the caravans stolen in the whole of the UK between 2004 and 2007.

They really must dig caravans.

How about some mugshots?  Here you go:

Astonishing. It took 19 police forces across the UK to arrest them. Here’s a sample of some of the action:

Today they are safely behind bars. Phew. Your 4 berth, Fixed Bed, Full awning 2006 Ace Jubilee Statesman is safe.

Remember, you saw it first on RiskHeads (probably).

Consumers generally think they benefit when they buy insurance direct but is it true?

To find out, we’ve asked people what matters to them when buying insurance, and in turn our panel used those criteria to evaluate the differences between buying insurance via a broker and buying direct online.

Why do consumers hate the middle man?

Primarily, customers perceive any middle man as an unnecessary third party, and conventional wisdom dictates that this means additional cost and possibly mistakes. Advertising by insurers, for example Norwich Union Direct (now Aviva), to ‘go direct’ has compounded this feeling.

What is important to consumers?

In order of importance, these are the things people said matter to them:

1. Cost.
2. Ease.
3. Speed.
4. Peace of mind that everything is covered.
5. Security of personal data.

So let’s now analyze these items and let our panel judge how each performs when insurance is bought directly or when via a broker.

1. Cost

Contrary to popular consumer belief we found that broker pricing was actually better than direct insurance pricing.

The reason for this seems to be principally due to insurers providing different rates to brokers, in order that premiums are lower. Why would insurers provide special broker pricing? Simple: because the risk is lower for the insurer. Brokers are professionally trained to choose the right policy for their customers, and not to under insure, therefore avoiding unnecessary claims while maintaining the correct premium income.

‘Cutting out the middle man’ it seems, does not save money this time. On the contrary!

2. Ease

Many of the consumers in our test case were surprised here. At least half began our test with the impression that buying policies directly would be the easiest option for them. After trying both, almost all had changed their mind.

Whilst the online experience usually proved more pleasant than the phone, most brokers offered an online service, and were far, far more pro-active after they received the initial quote request from the consumer, often answering queries by personal email or call and helping to reassure customers with a human service. Furthermore, most direct services completely fell down when queries or changes were required that were less common, particularly later in the policy life cycle. Brokers really shone through here.

3. Speed

The results here were quite evenly balanced. In the case of the time taken to generate initial quotation figures, direct services (online) were consistently very quick, while some brokers answered quote requests by personal follow up.

The difference however was somewhat reversed when it came to mid term changes, documentation requests and one off queries. The direct services often fell back to large call centres whose staff had little or no real insurance knowledge. In this areas brokers were more efficient, making suggestions our consumers found highly useful, saving them lots of time.

On balance, the speed at which quotes were produced by the direct services was not significant to our consumers when compared to the speed and efficiency with which brokers generally managed their policies throughout the policy life cycle.

“As long as my broker doesn’t take too long to come back to me, I don’t care.   It’s his problem while the clock is ticking, not mine.”

4. Peace of mind that everything is covered

We saw few surprises here. Brokers were largely far more efficient at cross checking policies than consumers, and also very good at educating their customers, explaining what types of cover were available and answering queries.

Direct processes were better than in the past but put too much focus on the consumer to do this work himself/herself to be able to compete with the level of service provided by brokers.

The really good Direct services centred around only covering the low risk policies, and leaving any consumer with non-standard requirements high and dry.

5. Security of personal data

This was a difficult one to test, and fell largely to our technical team. We did however take into account how consumers felt about their data security after using the various services.

In the case of Internet based services, the direct services tended to follow security guidelines marginally better than broker services, mainly due to the size of the organisations involved and lack of good software on the part of some brokers.

On the phone however, we saw a different story. Brokers, being far better equipped to deal with specific insurance questions and used to a human discussion, gave people a stronger feeling that they were in safe hands. The process of securing personal data was much the same as with direct, but the trust conveyed by brokers was better.

Summary of Results

So who won?  Broker or Direct?

1. Cost. [Broker]
2. Ease. [Broker!]
3. Speed. [Broker, though people admitted they were heavily biased due to point 2.]
4. Peace of mind that everything is covered. [Broker]
5. Security of personal data. [Broker]

Conclusion

We set out in this article to test the general perception by consumers that ‘going direct is better’, for the benefit of consumers and brokers on the whole.

Whilst we didn’t test every website and every class of insurance, the results with our test users were conclusive.

Whilst conventional wisdom dictates that the middle man offers little to the discussion and always has his price, in the complex world of insurance, perhaps things are not so simple, and after doing some research at RiskHeads we are now more certain than ever that the Insurance Broker’s day is far from over.

Our recommendation to all would be to trust your broker, let him shop for you, and you will likely reap dividend, whilst living an easy life!

The BBC have an interesting article on climate change and insurance risk, re-insurers, Munich Re etc.

“insurance companies … have been counting the cost of extreme weather for decades”.

Click here to view the video:
http://news.bbc.co.uk/2/hi/programmes/newsnight/8388421.stm

If only people had been listening to us

Insurance Times have a number of positive stories to tell this week.

Amidst the usual job cuts by Lloyds and more AIG doom and gloom, there are a number of more positive movements beginning to appear on the radar.

To name just a few:

• Hiscox storms ahead in H1
• Record results for Admiral
• Amlin boosts business
• And of course, the meerkat continues to pillage and boom.

Still, things are bad enough for Aviva to issue a recession guide for brokers only Tuesday. (Get your copy by emailing theloop@aviva.co.uk, asking for the “Your Practical Guide to Recession” guide.

Excuses for jobcuts made by Lloyds and their peers would seem to point to greater deployment of insurance agency software in our industry (at last); I have to wonder if this means that after all the innovation that a dry period innevitably brings, we may now be entering a new era of insurance online.

What do you think?

Is your organisation still feeling the crunch or are things on the up?