Guests at the Leaders Forum got an early start to tackle ancillary products, fraud and reputation
Despite the watchful eye of the FSA, brokers should continue to plug away at selling ancillary products, broker chiefs agreed.
Speaking at the Insurance Times/Zurich Breakfast Roundtable in York, independent broker chief executives and managing directors agreed that ancillary products, if sold correctly and with customers’ best interest at heart, were a valuable way of maximising revenues in challenging trading conditions.
The FSA is poised to swoop on ancillary products in the wake of the payment protection insurance (PPI) debacle, but that shouldn’t deter brokers, it was agreed.
“There are lots of opportunities to earn revenue from existing clients,” Brokerbility chairman Ashwin Mistry enthused.
Mistry said that, as well as FSA compliance costs and the challenging economy, brokers were also struggling to get finance from the banks, unless their margins were healthy.
Delegates also admitted they were concerned about the reputation of the insurance industry in the wake of the PPI mess and the explosion in motor personal injury claims, fuelled by referral fees.
Zurich commercial branch manager Andy White said the insurer was doing everything it could to clamp down on fraudulent personal injury claimants, but added that rooting out fraudsters was a complex issue that all insurers were battling.
A greater role
One way of cleaning up the reputation of the industry is to continue to push for both brokers and underwriters to achieve professional qualifications, the table agreed.
However, Romero Insurance managing director Simon Mabb admitted there was still indecision with brokers. “We have got an identity crisis: are we a profession or an industry?”
There was consensus that even though the insurance sector had suffered reputational damage, the government was expecting insurance to play a much greater role in society. It is calling for insurers to become more active in covering flood-risk homes and underwriting for social care in old age.
Mistry quipped that because firefighters were now barred under health and safety rules from hosing down fire-hit empty premises, insurers would probably have to fork out to subsidise the fire service.
Mistry said: “We are not strong enough to say ‘stop, we are not a charity, we are a business’.
“The fact the government decides to reduce flood defence spending means that somebody else has to pick up the tab.”
No fear of ratings
“I would be happy for insurers to scale us from a one to three.” Cumbria Insurance Brokers managing director Paul Bradbury on insurers rating brokers for levels of professionalism
“There are lots of opportunities to earn revenue with existing clients. Brokers have started to get their acts together.” Brokerbility chairman Ashwin Mistry on add-ons as a broker sale route
Use your time wisely
“If time spent on that client is affecting your bottom line, it is just better to focus on your business.” Bollington managing director Chris Patterson