Key industry figures stepped up to put forward their visions for the market's future
The personal lines motor market has been going through a period of flux in recent years, but there is still room for insurers and brokers to make money while providing a good service to the consumer.
That was the message from Allen & Allen sales and marketing director Steve McPherson. He began by describing how the market has been rocked over the past five to 10 years by aggregators biting into personal lines motor and insurers pulling out. But, with insurer confidence starting to return, those that pulled out of motor are starting to regret it, McPherson said. “Insurers such as Zurich are now looking for their friends again. More and more insurers are wanting to work with brokers.”
As many as 35% of customers often lie or make mistakes when buying motor insurance online, McPherson said. A broker could add value for insurers by ensuring applications were legitimate.
He added that personal lines brokers were now using Facebook and Google Earth to get a better profile of risks.
Steve McPherson, sales and marketing director, Allen & Allen
Aviva head of broker personal lines Sam Hudson was bullish as he described his take on the personal lines market.
“There probably hasn’t been a better time for brokers to be in the personal lines market,” he said. “We believe that we and you can make money and provide better service for customers at the same time.”
A successful personal lines broker would re-establish their brands in the personal lines market, build up their online presence and choose their battles when placing business, Hudson said.
He predicted that the broker personal lines market would continue to grow because aggregators could not compete with brokers in areas such as personal customer service.
Hudson moved on to describe what an insurer wanted from a broker. In a specialist broker, Aviva wanted a detailed knowledge of the chosen markets, while a general broker should have sound operational practice.
Hudson concluded by describing what brokers should ask from an insurer partner. Brokers should look for insurers with a long-term commitment to the market, he said, adding that they should also look for good communication from insurers.
Sam Hudson, head of broker personal lines, Aviva
Autonet director Ian Donaldson explained how brokers could better market themselves and use aggregators to their advantage. He described how Autonet had diversified on to aggregators about five years ago after seeing insurers and brokers launch other brands online. “We [diversified] mainly to attract a different footprint of risk. We looked at clients we want to attract and built a brand to attract that person.”
Targeted branding worked for Autonet, he said, when it launched The Van Insurance Company and found it attracted more clients than other Autonet offerings. Donaldson thinks a lot of the success was due to the name. He believes insurers would trust brokers more if they had increased self-awareness and brand knowledge.
Brokers should not be scared of aggregators, he said, but see them as a route to market and a way to generate leads.
Insurers now wanted personal lines brokers to provide services such as checking clients’ ages, locations and personal details. “The aggregators can generate the leads for you, you can upsell, but still provide volume and make money for insurers by doing these things upfront.”
Ian Donaldson, director, Autonet
Ball in insurers’ court
“There is an income stream from referral fees; it’s quite an important income stream. I think the insurers need to be the ones to be proactive on referral fees. It’s going to benefit both sides of the fence. From a selfish point of view, you only get referral fees on a non-fraudulent claim. It’s not going to affect our claims ratio if we get a referral fee.”
Kevin Stone, director, Weald Insurance Brokers
Referral fees here to stay
“Referral fees direct from solicitors or hire companies are part and parcel of the everyday broker model. It’s not going to go away. It’s one of those things that’s probably part of the model for everybody in the room, and to get rid of it – I don’t think it will happen.”
Ian Donaldson, director, Autonet
No evidence of rates hardening
“You read a lot of things in the press about rates hardening, and a lot about the gap between renewals and new business rates disappearing, but evidence on a day-to-day basis isn’t there. With private car insurance, we still find there’s a massive gap between what the public can buy online and what is offered to the broker.”
Mark Searcy, director, Alan Blunden