The overall picture of insurer service concerns is one of exhausted staff at both ends of the chain, missed deadlines and a distinct lack of autonomy and empowerment

By Stuart Reid

It would be remiss of me not to start this month’s column by mentioning the commission-focused comments made by FCA executive director for consumers and competition Sheldon Mills following my article last month.

Stuart Reid

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Whilst I am not suggesting that his comments were a response to my piece, it is interesting to see his comments address many of the fears I set out.

Mills put it simply: “It is not for [the FCA] to set what commission is.”

Importantly, he added: “It is about brokers ensuring they are assessing the right value they are providing when charging that commission.”

Who would argue with that?

Insurer service

In preparing for this month’s article, I have spent the past few weeks looking at the issue of insurer service – and the picture is not good, not good at all.

As one senior broker manager told me: “If we gave clients the service we get from insurers, we wouldn’t have any!”

As always, there will be mitigating factors – the hard market being an obvious one – but the overall picture is one of exhausted staff at both ends of the chain, missed deadlines and a distinct lack of autonomy and empowerment.

Whilst a broker’s job should be, as much as possible, focused on the client, many brokers I have spoken to have said that they spend between 50% and 75% of their time chasing down insurers for the basics.

As another broker I spoke to commented: “You know things are bad when you present insurers with a good, sizeable risk for which we know they have appetite and don’t hear anything back – nothing”.

And to back up what I have found, do take a look at the latest Insurer Monitor Benchmarking report from Biba.

Insurers’ net promoter scores (NPS) are actually up nine points since the start of the year, which is great news.

However, this is completely diminished by an overall NPS of -4, with a significant number of companies very far below that level.

Making improvements? 

The NPSs seem to show that a few insurers are making improvements, but overall the picture is bleak.

What is even more concerning is that this poor service includes claims. If claims – surely the most basic of duties – are suffering, then things are serious.

Where insurers do score well, particularly in the mid-market commercial space, is where there is a relationship between the broker and the individual underwriter, claims team and business development manager – Something beyond the merely transactional.

It is often said we remain a people business, even in this remote working, technically changing world, and this is as true with an insurer as it is anywhere else.

But with experienced staff having exited the market, with insurers still struggling with staffing levels and the changes to office attendance brought about since Covid hit, it is challenging to build those relationships.

Years ago, I bought a business in London that I had worked at some years before.

A few months after the purchase, the chief executive mentioned to me that he saw a big difference in the companies we ran.

It was our attention to our suppliers – the insurers – that he felt he had missed.

Yes that was easier then, being in the City with insurers all around, but I would contend that building up that relationship, at all levels, is fundamentally important to running a successful brokerage wherever you are based – and especially at what is obviously a challenging time for all.

Closing in

Add into the mix insurers that are simply pulling out of certain and significant lines of business – and the serious speculation that Aviva is looking to sell – and we may soon have a market with even less choice than we have currently.

No wonder then, that the rise and rise of the MGA continues.

I have never been a fan of insurers giving their capacity on vanilla risks – specialisms yes, but not the day-to-day for an insurer.

Why would insurers do that with all the costs of branding, marketing and infrastructure that they bear?

But maybe that opinion needs review. If certain insurers cannot provide the basics – and we are absolutely talking basics here – then maybe they should give it to those who profess to do better.

Brokers want to provide the excellence that the FCA and their clients are rightly demanding, but if they are reliant on suppliers who cannot meet that demand then something will have to change.