Despite this bleak assessment, I doubt that your vision of the future landscape is correct because, sooner or later, we will “clean up our act” (http://davidgwilson.spaces.live.com/default.aspx?_c01_BlogPart=blogentry&_c=BlogPart&handle=cns!7DF3163703347130!1122) and the early adopters will win BIG. Then we will do what we do best plagurise, dilute and start the whole process over again.

Have a nice day.

To extend that idea, the whole reason for my belief that the insurance broker will die out, is that the more they sandbox these things, the easier it’s going to be for the insurer to trust the client to submit correct details themselves and to pass on the subsequent discount. For this reason, I certainly don’t see SME business being traded through brokers in five to ten years time – though I think the dillution of complex commercial will take a lot longer that that.

Aside from all of this – it’s always interesting to see the differing opinions and subsequent head butting of someone from a broker and someone from an insurer!

If brokers that deliver the required volumes fall down in other areas and I know that many do, it is the insurer, the carrier of the risk, who can determine whether they accept the individual (or collective) risk. I have long argued that if a risk is misrepresented to an insurer – by accident or design – it is in the interest of the insuer, broker and client to decline to provide a quotation. This does not happen! If it did we wouldn’t waste so mch money on claims disputes, funding the legal fraternity, causing unnecessary stress for policyholders and reputational damage for the industry.

Some of the largest brokers and insurers in UK are the worst offenders when it comes to, effectively, endorsing these practices and yet they have been able to “get away with it” AND, in the process, negotiate unsustainable (immoral) remuneration packages that render transparency a forelorn hope.

You will just have to believe me when I talk about compromising product integrity to fund pricing because I hardly think that quoting the “top 5″, presumably by GWP is the basis for much of a discussion!? I don’t intend to bang the drum for any particular insurer but apparently there is a market for products from the likes of Hiscox, Chubb and a plethora of MGA’s who manage to deliver products that offer so much more than merely price.

That apart I am old enough to remember the old GA Maxplan policy. A genuine “All Risks” household product available to policyholders incl. a “free year” dependent upon claims free years. That was 30 years ago! in more recent times we have insurers spending money on TV advertising to boast about covering Accidental damage for glass and items in garden, sheds, garages, etc. I rest my case!!!

Our industry needs change every bit as much as our wealthy “cousins” in banking. But that maybe brings me back to the question of which (if either) version of FSA (Food Sandards of Financial Services) is most likely to actually achieve something about the quality of the basic ingredients. Because there is little sign that there is sufficient will to change from within and too many companies reliant upon the current models…no matter how flawed.

Thank you and goodnight!!!

A broker is paid to arrange the insurance and get the claims paid. They cannot persuade an insurance company to do that after the event. Therefore, a broker can only fulfill the role a client expects if they have a good all round understanding of the client’s organisation. This takes time and experience.

A detailed knowledge of the market and independence will allow them to compare the entire packages offered by the insurance providers. They may all have similar products yet their service may not be the same. If the price is different there should be a reason that a broker can explain. A prompt claims service can save a business and brokers know who provides this because they are at the sharp end.

Clarity about what is and isn’t covered is vital yet if an insurance company is investing more in advertising than claims brokers are the first to spot the trend. Every year they get the opportunity to make a new recommendation and it’s good to know there are comparable covers available from different providers with different levels of claims service.

Naturally, as a broker I love the results of the poll. It seems we’re doing the right thing and providing real value. I’d love to see another poll showing the order of priorities for the direct buying policyholder.

Jason

To illustrate my point, I’ve had any number of food risks sent to me over the years with no declaration of any composite panels, yet when you probe the broker to probe the client deeper, you find that the premises is head to toe polyurethane panelled. Now why didn’t the broker declare this material fact? In the vast majority of the cases of which I speak, it’s because they didn’t have the first clue what a composite panel was, let alone that they are present in the vast majority of food risks and in the case of polyurethane represent a hugely hazardous fire risk…so now the building has burnt down, the insurer who hadn’t been told about them has repudiated the claim and the client’s whole livelihood is in tatters. Now is that the fault of the product, or the fault of the broker?

I simply don’t see the compromised integrity of products of which you speak. Granted, some ‘niche’ insurers will perhaps toy with the wordings or excesses in order to make themselves appear more competitive, but they still tell you what cover you have! It’s down to you to decide whether or not that is adequate. Were you to compare, for example, the Commercial Combined product of the top five major insurers, the likes of Aviva, AXA, RSA, Allianz, AIG, NIG etc, I just don’t see where the major differences are, nor the compromised integrity. All of them give material damage with all risks including subsidence, business interruption, public, products and employer’s liability cover with optional extras for legal expenses, goods in transit and money. I don’t see any of them suddenly removing flood cover from their wording without explanation or secretly excluding manual work under the EL section of their policies – THIS would be compromising integrity. I don’t see how it can be suggested that it’s down to an insurer to offer EVERY cover possible at a competitive price – it is down to them to offer what they’re prepared to offer at the price they are prepared to offer it, present that to the client and/or broker and then let THEM decide whether it’s what they want or not. You seem to continue the suggestion that every insurer should provide every possible cover as standard?!

I am not suggesting for one second that brokers are evil or non-transparent, just that I do not always feel they bring the experience and value that both the insurers and clients are ultimately paying for.

Holidays, cars, supermarkets don’t really cover or add anything to the points I was attempting to make. Albeit it is kind of indicative of how far our industry has fallen. So, let’s have another go:

How transparent would anyone (insurer or broker) want to be about the FACT that we have (generally) compromised the integrity of the products we create?
– if you like: 2 potatoes less = less “satisfying”

We learnt this trick by imitating retail in an effort to: generate competitive advantage (based upon price); secure market share (based upon GWP); aid the sales and operational process (reduce HR costs)…
– 2 potatoes less and inferior ingredients = Hmmm false economy!

Warren Buffett: “Price is what you pay value is what you get”

We should be about delivering peace of mind! If I can attempt to illustrate the difference between a QUALITY product and a product created to generate QUANTITY. Which, post loss, policyholder statement relates to what product?:

“Thank goodness we are insured”

“I hope we are covered”

Worthwhile covers (not the frivilous variety you mentioned), wordings that reflect QUALITY products (if you like, more Food Standards Agency than FSA!) and after sales that can focus on serivce would go some way to restoring much needed trust.

I could but don’t have the will to go on so, if insurers are really transparent (presumably the inference is that evil brokers are not!?) then why are direct products not – as you quoted – circa 25 – 50% cheaper?

I would be happy to discuss the matter directly with any parties that would be interested to do so.

David