Direct Insurers are missing the point - and sending out the wrong message
You may remember the Aesop’s fable about the crane and the crow that made a pledge to assist each other. It’s a longish tale and I won’t bore you with the details as they involve stones, bread, broken legs and a farmer’s trickery. The moral of the fable provides a warning to the innocent to beware the words of wicked people as these are often deceptive; they say one thing and do another.
Frustratingly, BIBA members regularly come up against insurers whose actions don’t back up their words. Take for example, those insurers who say they support the broker then make claims on their website and in marketing literature that the public can get better savings by going direct.
Or what about insurers whose websites urge larger businesses to contact their intermediary for a quote but completely remove brokers from the equation for SMEs as they want to channel such business to their direct arms? Confusing! Especially as those insurers are telling the broker that they have a very healthy future and that their support for the intermediary channel is at the very core of their business.
Why do some insurers insist on acting in this way? Do they see brokers as a soft touch and decide to try it on? Does the left hand not know what the right hand is doing? More worryingly, are insurers being led by people who are not part of the wider picture – i.e. the marketing people, should they really be calling the shots here? That’s the role of senior management surely.
Of course they may use the excuse that it’s the cost of distribution that makes them act thus – but in doing so they are denying what’s best for the customer. SME business is an advice segment not just a price segment.
There’s also an element of treating the customer fairly mixed up in all this. All too often when TCF is mentioned we think automatically of the public as customer. That’s not the full picture however; individual intermediaries in the distribution channel are also customers – and they are important. How can insurers truly be treating intermediaries fairly and supporting the sector when they deny their very existence or even suggest direct is better and in doing so underplay the importance of advice?