Stuart Reid says insurers have been responsible for the damage to our reputation, but not entirely
'Much has been said recently about how important it is that our industry strives harder for the reputation it deserves. Steps are being taken to address this, such as moves to get "our message out" to universities and colleges reminding graduates that insurance is an industry that is both challenging and rewarding. We are also focusing on basic business fundamentals, like ensuring there is contract certainty for clients, without which striving for a reputation is to my mind completely futile.
Brokers have, in the main, have blamed insurers for this lack of reputation and expected those at the top to do something about it. Complaints still ring in the ears that poor service levels, closure of branches, lack of underwriting discipline, complicated and outdated policy wordings undermine the job we do. They are, I am afraid, still relevant.
There is therefore much to do and many promises to be fulfilled. One quick win would be that if insurers are genuinely serious about reputation then the noises made about connectivity between insurers/broker (still as elusive as ever) has to become a reality. Service simply has to improve.
We have recently run a survey of our own clients on the service they receive, surely a foundation stone of any reputation we deserve. It is astonishing to see the difference in response between those clients where we have dealt with the insurers' "work" in-house by, for example, utilising binders, and those clients where we have had to rely on insurers to do the work.
Insurers have a stark choice: connect up or give more to the brokers to do. Either would be welcomed by brokers and by the public.
The responsibility for the industry's reputation is not all in the insurers' domain however, brokers too have a responsibility. Those brokers who insured businesses with AGI for example should reflect on the damage done to our industry following Boscastle - it was very bad indeed.
Mistakes can be made. Independent Insurance fooled more than the insurance industry. But with hindsight, why did the brokers use AGI whoever they are? Was it price, commission paid, or because the cover and service given was better than elsewhere?
Surely as they did not fall under the jurisdiction of the FSA this should have given some pause for thought.
Whatever the reasons, all the excellent work that many insurers undertook following the disaster was totally ruined - a major pity.
My worry for the provincial market is the current consolidation. It would appear that many businesses are considering a sale. I am shocked by the size of the businesses considering it.
Many of us, myself included, felt that if consolidation post-FSA was to happen it would do so at the small end of the market. Not so. The acquisition noise currently seems to be in the mid-range. If this type of consolidation does happen then my fear is that the regions, as with the insurer branch closures, may be left without the local service we all know is vital and what shores up any reputation we cling to.
True it may lead to new start-ups or to smaller brokers taking advantage of the gap left, but with few agency start-ups and the age profile of smaller brokers I wonder whether the appetite is there.
If not, there is a danger that if we are not careful and with so much else to be done, the reputation we all strive for will be harder, much harder, to achieve. IT
'Stuart Reid is chief executive of broker Stuart Alexander