Kevin Pallett is Managing Director of broker only commercial insurer Fusion. Having spent over 25 years in the industry, including time spent with NU and Independent, he is always prepared to speak his mind in order to modernise and improve the industry's working practices.

Window-cleaning is a competitive business. But imagine how surprised you'd be to receive a call from someone offering to do your house, sight unseen, for 25% less than you currently pay.

Surely they'd want to know the size of the property, how many windows and floors? Not to mention how much you pay now. How could they calculate their price otherwise?

Would you leap at the offer, or would you be uneasy? If you said yes, would you half expect to open the door to someone with nothing but a tatty chamois leather and an ancient bottle of Sudz-are-Uz?

This is not a dilemma many of us face, because window-cleaners expect a realistic price for the service they provide. You'd think the same could be said for insurance brokers – wouldn't you?

So how come a businessmen friend of mine was able to show me a letter from a broker that guaranteed a price saving? Remember: the pitching broker knew nothing about this client and his needs. The argument was scary in its simplicity: if your current broker isn't saving you 25% at renewal, you need another broker.

What hope is there for professionalism in our industry when services are hawked around in such fashion? Is it professional to undercut premiums without quantifying risk, assessing risk management, judging the quality of the management?

This new broker didn't even know exactly what the potential client did. That, to me, is reckless endangerment of professional standing and, ultimately, commercial well-being. Isn't it obvious to these so-called brokers that business won this way will be lost just as quickly?

My acquaintance binned the letter, recognising that it couldn't come from a professional firm on a par with his accountant, solicitor or current broker. But not all prospects have such sense. And if we ignore the activity of the price-pushers, we will not be taken seriously as a profession.

There are only two ways that any business can compete: you are either cheaper or different. Those of us contending with much larger rivals know we have to move away from the “price is king” proposition because they will always have deeper pockets. We need to differentiate ourselves by identifying and then satisfying the client's requirements at a price they are prepared to pay and where we make a reasonable profit.

Only the very biggest can go to war on price – that much has been proven in the personal lines arena, where mega players and direct sales dominate and client loyalty is a rarity. Do we want commercial lines to go the same way? Of course not. Which is why we need to extol the virtues of value, not price, in the context of professional advice that matches client needs.

Businesses don't expect window-cleaners to be professionals, but they expect them to be competent and to provide value. But businesses are being educated into thinking their insurance providers are nothing more than street-hawkers flogging commodity products.

That is madness, and it has to stop. Otherwise we'll all end up carrying buckets and climbing ladders for a living.

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