Jerry Clayton's letter 'LFC boss was warning others' (Insurance Times, February 17) suggests that the DAS policy is inferior to other policies.
If one compares the DAS policy with the companies referred to by Clayton you will find that the latter have a number of unfavourable terms, including:
- waiting periods
- substantial minimum amounts in dispute franchise
- substantial excesses per claim
- purchase cover being excluded
- very short reporting time conditions.
The providers who are referred to by Clayton write their contracts on a claims-made basis.
The 'occurrence versus made' debate is often complex, but there is no doubt that claims-made wordings have their limitations with issues relating to stability, transfer of business, pre-existing circumstances, and renewal processes all demanding careful attention.
DAS is not alone in adopting an approach whereby business is written on an occurrence basis, nor is it unique in having pre-existing contracts excluded. The overall value of the policy depends upon many factors and not just the pre-existing contract exclusion which is designed to deal with the risk of adverse selection against insurers. If this exclusion is compromised, something else has to give within the policy to counter the additional risk.
A J Buss
Assistant General Manager
DAS Legal Expenses Insurance
Pot calling the kettle black
I read with interest the comments of Patrick Snowball (IT, February 24) on e-commerce and his concern that 30% of UK brokers' offices are not connected to the web.
Perhaps in his new role Mr Snowball might like to answer why in the case of CGU, I cannot e-mail a risk presentation with attached digital photographs to its Birmingham branch because, I am told, staff do not have access to the web or a standalone PC capable of receiving such attachments.
A M Ware ACII
EHW challenges IT perspective
Before Christmas, Insurance Times reported a dispute between EHW and Highway. EHW wishes to clarify a number of matters in the article.
Firstly, the injunctive proceedings initiated by EHW would have occurred even if Highway had waited until June 1, 2000 to contact EHW's clients. The injunction was predicated on Highway's interference in the
relationship between EHW and its High Street brokers, irrespective of whether the Lloyd's Guarantee Agreement was in place. Many of EHW's relationships had been built up over considerable periods.
Secondly, the Settlement Agreement reached between EHW and Highway won for EHW's High Street broker clients a
reasonable period of time to choose whether they entered into new direct dealing arrangements with Highway, make alternative arrangements with EHW, or both.
Before EHW went to court, Highway had terminated all arrangements from January 9, 2000, with notice given to the brokers just before Christmas and the millennium holiday period. Now High Street brokers had until March 1 to make suitable choices for their business, and, as a result of Highway's undertakings to the court, Holman and HSBC could not simply approach and encourage High Street brokers to switch to Highway. Such a choice must be freely made by the High Street brokers.
Thirdly, the Insurance Times article suggested that EHW's account was created only because of Lloyd's
regulations. This is wrong. EHW developed its account over many years by its efforts in locating, marketing and servicing High Street brokers' insurance needs. EHW's services are something that the majority of Lloyd's underwriters cannot or do not wish to undertake, and are of value both to the High Street
brokers and to Lloyd's underwriters. EHW will undoubtedly continue to advise High Street brokers, as they have done in the past, on the suitability of the various insurance carriers, according to financial standing and whether their client's insurance needs are being met.
Edgar Hamilton & Wellard
K R Spencer
Need for web amendments
On the subject of information technology (IT, February 24), it surprises me that no UK insurer has provided an Internet facility that would allow brokers to enter mid-term amendments to existing policies.
I am sure there is at least one insurer in the US who has set up such a facility. Common internet browsers such as Microsoft's Internet Explorer make it possible for insurers to interface with a broker using a standard PC. Straightforward amendments, such as changes of vehicle or increases in sums insured, could be processed in seconds rather than months.
Yes, we do have EDI, but for the vast majority of business this is restricted to new business only. Adjustments and renewals on most policies are transacted in the traditional manner. I imagine this is true for many brokerages.
Given the pressure on costs and the difficulty certain insurers have in providing an even half-decent level of service, I would have thought this would be a cost-effective solution.
Clark Conway Insurance Brokers
Cornell sparkles on GISC
The letter from Tony Cornell (IT, February 17 ) was a delight to read. It was refreshing and pragmatic, cutting straight to the essential principles of debate on regulation.
As I see it, GISC will be a self-evolving regulator, setting the first level playing field and continuing to improve it through time. I happen to serve on one of the working parties for GISC and I know that the rule book has been delayed only because of the volume of response to the consultation document. There has been widespread comment from across the industry and Chris Woodburn and Angela Darling have impressed me with their positive attitude.
The co-option or election of Tony Cornell to the GISC board may help the whole industry to bring clarity and confidence to the issue. He may also bring a little sparkle to board meetings.
Industry awards are a joke
I have recently been invited to and asked to complete an entry form for a magazine's insurance industry awards and will no doubt be confronted later with lots of smiling faces saying 'didn't we do well'.
To those of you who intend to return the form (or should it be, to those of you who would otherwise not have returned it?), may I suggest a further category headed 'Still searching for excellence', with nominations for such awards as naff adverts, slowest response, worst phone system, heaviest policy document and wastefulness of post and paper. The list is almost endless. Name your own category. The results could be interesting.
Vaughan Insurance Brokers
Agents' futures on the line
I think everybody knows that insurance companies are cancelling agencies left, right and centre and taking over all the client bank themselves.
This is agents' bread and butter. Insurers do not discuss improving the business with their agents but just keep on cancelling the agencies. Axa Insurance does not even allow us to take policies up to renewals. They are taking our contacts and writing directly to the clients about the cancellation of agencies.
This sort of treatment is very unfair to every agent working in the UK. They and other insurers are playing with the livelihood of so many people.
We are lost and do not know what to do. We request the rest of insurance intermediaries and brokers to raise their voices against these heartless insurers to save our livelihood.
Villa Insurance Service