David Miller, in his letter in your October 7 edition is, I am sure, expressing not only the views of insurance intermediaries in relation to the way in which the Insurance Ombudsman Bureau (IOB) can be used – or rather abused – in connection with complaints.

In our capacity as medical insurers, we have had, I believe, only three cases submitted to the IOB during our membership of that organisation and in only one of these was the complaint successful – and then only to the extent that they received a derisory compensation sum for alleged maladministration.

Nonetheless, we are finding there is an increasing tendency for what can only be described as vexatious threats of complaints, by even applicants for insurance, in order that they might get their own way. The public is aware that members of the IOB have to pay a sum equivalent to approximately £500 each time a complaint is registered regardless of whether it is justified or not.

In one instance where we had declined a claim the policyholder asked to speak to me "without prejudice" and effectively wanted to enter into negotiations on the basis that whilst he understood that his claim was not covered, at least we should be prepared to give him the £500 odd which we would have to pay to the IOB. He would then be happy and we would not have to waste our time defending our position to the IOB. That seems to me as little short of blackmail and the structure by which the IOB charges fees allows for this to happen.

But in fairness to the Insurance Ombudsman I think that it should be known that the fee structure is not decided by the IOB itself but by the organisations which have set it up. That is the ABI. So perhaps it would be more appropriate to apply pressure on that organisation to look at ways in which it can restructure the costs to insurers in relation to complaints so that the less scrupulous of our policyholders can be deterred from making totally unjustifiable complaints on the basis that insurers will collapse before the issue of expediency against cost.

Perhaps intermediaries should also consider why the IOB is now extending its remit to the broker market, particularly as it is in reality a part of the ABI?

Is this yet another demonstration of the ABI's inherent but always denied dislike of the intermediary market?

The attitude adopted by Ecclesiastical perhaps reflects the fact that that organisation has always supported professional insurance brokers.
David C Potter

Hanging on the telephone
I have this week closed my 'new business account' with Norwich Union due to their blankety blank telephone system.

Yet another insurer cutting costs by increasing the brokers overheads. Come back switchboard operators, all is forgiven!

"All our account handlers (or whatever they are titled) are busy on other lines at the moment, please waste some more of your commission, by hanging on until someone is free."

Well no, thank you!

I would not object if there was a "if you do not wish to hold please leave a message and someone will get back to you" option which is what a couple of other insurers offer.

I applaud a freephone system for our clients to report a claim direct to Norwich Union...but I've only just realised that it is the brokers who pay for this in the long run, by the savings Norwich Union make on not having to return our calls!

Is there any insurer out there who has sufficient staff to handle brokers' business without keeping them waiting indefinitely on the telephone?

What do other brokers think?
Tony Smith
J.L. Roberts & Co
Insurance Brokers,
High Street,

Don't let the big guns fool you
I have just had a very animated customer on the phone complaining about his Norwich Union motor insurance policy.

We had issued the renewal to him for his two cars at a premium of £1,053.67, which, after performing our usual re-quoting exercise, we found to be most competitive. He thought that he would shop around. He contacted Norwich Union Direct for a quotation, and they offered exactly the same cover for a premium of £778.76, with free legal expenses and a free pocket organiser. After contacting my Norwich Union business development consultant, I am told that they have no control over it because it's a separate company. This is rubbish, I accept that it is a different department but the customer doesn't realise this – all they see is the name Norwich Union – and ask us why they (NUD) can quote lower premiums than we can through NU (Standard).

I think that it is time that we all stood up to the likes of Norwich Union and started to support insurers who don't have direct dealing facilities.

Don't let the big guns fool you any longer – as quickly as you are putting new business to them, they're poaching out the back door with the direct arms.

I shall be moving my clients to alternative insurers who don't poach my business.
Phil Warman,
Warman & Co (Yeovil),