Was the irony of the Leader column (Insurance Times, 23rd March) on the broker/intermediary trade bodies supposed lack of "sensible dialogue" with insurers, appreciated by your readers?
The irony being that it appeared next to an article regarding the Aiibs stance against E & L Insurances breach of client ownership.
Both Insurance Times and its broker/intermediary readers can be assured that the trade representative bodies do keep a careful watch on the activities of insurers and are quick to react when brokers/intermediaries business interests are threatened. Why even this week, a crisis was averted when the Aiib intervened between a "misunderstanding" between RSA and their engineering sector brokers.
Also, to state in the Leader that the Aiib and BIBA are "divided" is certainly not the case. Far from working in opposite directions, BIBA and the Aiib share many similar aims and objectives and in recent months have:
- Offered a joint GISC advisory service to Insurance Times readers
- Are both represented on the GISC: on the main Board and on working parties
- Share an on-going dialogue on many common areas of concern
The bigger issue here, however, is not rivalry between the trade bodies or what brokers and intermediaries have to fear from direct insurers, but more than that, the Aiib believes, that the broker/intermediary sector is winning the battle against the direct writers.
According to the ABI's statistics, brokers and intermediaries still account for 67% of premium income from the UK general market, despite the direct insurers waging a massive ten year campaign against us on price, direct selling and cancellation of agencies. When sanity returns and the direct writers realise that they cannot continue to "buy" business and operate at a loss, brokers and intermediaries will still be there. Maybe then, the direct writers will understand that the broker and intermediary sectors' strength lies not in price and "churning" the market, but on the essential principles of service, experience and independence.
One only has to look at the success stories of First Direct, Tesco and Virgin, who put customer service right at the top of their priority list.
How many insurers do you know who put customer service at the top of their list?
A pain in Spain
We have a very important problem to solve.
Our partner in Spain wishes to sign a contract with a local insurance company. They want all risk cover for rented cars. Cars are registered in Spain and the customers are driving in Italy.
But we have a problem – the Spanish insurance company will only cover the risk for a maximum period of six months.
We need cover for one year because the European regulation for rent-contracts speaks about a minimum duration of 12 months.
If you are in position to solve this problem, we need the following:
- Cars are registered in Spain and the customers are driving in the territory of Italy.
- Minimum duration of insurance warranty: one year.
- All risk.
Cassola, 28 march 2000
Direct contact by phone: +39 348 35 23 602
Fax +39 0424 471230
GISC still a way to go
GISC's Chris Woodburn (March 23) referred readers to his press release regarding several issues raised in these pages previously, including complaints handling.
Having read the release carefully, and had further conversations with GISC, we congratulate the team for doing a super job under stunningly difficult circumstances. But there are still matters to be addressed.
1. From a recent ad-hoc survey of callers to our helpline, the current public profile of GISC seems to be measured in minus numbers. So far no customer is aware of any real or imagined benefit from buying products from a GISC registered source.
2. Now and for the immediate future, GISC cause customers raising queries or complaints about insurance products more complication. They are now an additional body to other agencies offering industry or regulatory control, and one which offers a service somewhere between giving the customer 'an explanation of acceptable practices..', and a full investigation of complaints plus imposition of some sanction on the agency(ies) involved.
3. The cost of complaints handling and (so far as we can see) the sanctions are still unknown. On the basis, why would GISC reassure customers even when they are aware of it?
While I sympathise with the need for both the industry and its regulators to nail down an acceptable framework for dealing with compliance issues, let us not forget that at the end of the day it is insurance customers who have to be convinced that their premiums are safe and well spent.
The industry does seem to be moving towards the British Standards complaints handling procedure BS8600, which we helped to draft. This should provide customers with satisfaction for the majority of low level enquiries and problems, which are not really issues for a regulatory body.
The much smaller number of cases where customers have (or think they have) a justified and substantial complaint and which cannot be dealt with by any internal process, should go to an independent external dispute resolution body. If that fails to resolve the matter, the customer is left with the Courts as final arbiter.
If the dispute resolution body is reasonably competent its success rate should be high and its costs – compared with a defended legal action – extremely competitive.
The Law Society has already adopted the BS8600 as its model practice complaints handling procedure.
National Association of Bank & Insurance
Bum deal from NU
While I sympathise with Mr McArthur's experiences with the Norwich Union, he has had a five star treatment from them compared to my own.
We have been consistently losing existing NU clients to its own direct operation, never mind its dot.com etc for over two years.
I have been in correspondence with Patrick Snowball regarding this and been given the usual 'bums rush'.
Space does not allow me to list every complaint concerning poor service, problems with the EDI transmissions, direct debits, letters sent direct to clients informing them policies had been cancelled – and so on.
My reward for being a guinea-pig for household EDI has been to receive a letter, cancelling my household account and to reduce my commission on motor to 10%. The reason given being a poor claims ratio on household policies. Our NU account currently stands at £75,000.
Ironically, we are re-broking a lot of NU household policies with CGU (with whom we have a very large account) of which NU will soon be a part of.
Worried? You bet. I'm with you Mr McArthur – are there another 499 out there somewhere who feel the same?
Grenville Insurance Services
In support of A.McArthur's letter, we recently experienced Norwich Union's dual pricing madness with our client's vehicle – a 1996 Mercedes 320SL – NU's renewal premium was £1269.77 which the client was about to accept having tried several other options.
However, along came Norwich Union Direct with the mind blowing quote of £848.86. That is a third less than NU through me.
But it is a different company, NU claim.
However if that is true why do Norwich Union Direct state that: "You have the reassurance of knowing that you are protected directly by one of the UK's longest established and largest insurance companies...we combine size, strength and security with a fast friendly and efficient service. You can be sure that we will look after you and your car with the care, consideration and attention to detail you expect."
How much longer are we as intermediaries going to let insurers like this get away with it.
Not only do we accept dual pricing we are also putting up with the NU telephone system and its diabolical service. NU Direct is probably able to maintain the promise it makes to its clients at ours and our clients' expense. If NU cannot make profits at premiums of £1269.77 how the hell can NU Direct afford to quote £848.86?
Our industry continues to shoot itself in both feet. How do I explain to a client the difference in quotes...he has been assured that cover is the same through either offices.
Intermediaries must retaliate, we have ignored the situation for far too long. Certain insurers will continue to stab us in the back while smiling sweetly to our face. The personal lines battle has been all but lost – but will we sit around and let these two faced hypocrites take control of the commercial/ business sector as well?
There are still a few broker-only insurers out there and we must support these companies 100% and kick with size 12 boots the likes of NU into touch...before they steal all our clients and put a final twist into the knife already being thrust deeper into our backs.
Tony A Smith
J L Roberts & Co Brokers
Web deal a big let down
We waited with bated breath for the launch of the IIB insureright web solution. With customary stage presence, Andrew Paddick introduced us to speakers who emphasised the need for brokers to get on the web (which is why we were all there) and by the lunchtime break, we were ready to sign up.
Unfortunately, the dessert was sweeter than the afternoon session when we were told of the prices to get on board, even with an "early bird" discount.
The ongoing costs involved are potentially enormous – disregarding the set up costs and access costs, monthly licence and advertising fees, brokers then pay for all quotes processed, for all policies taken up and for credit card payments.
Assumptions were made about getting a 10% conversion rate – no problem from serious enquirers at our offices, but the web encourages the dreamers and casual visitors. There was no discussion about more competitive premiums, the practicalities of creating policy and accounting records, issuing documentation and only passing reference to how insureright might publicise itself.
And all this from a fairly restrictive panel of 10 insurers (unless you pay for extra ones), some of whom have their own internet sites offering much lower prices.
We have more questions than answers.
E-commerce has got to result in much lower costs to be effective for brokers and consumers alike. IIB score B+ for effort but D for content. Lets hope they listen and can adapt their charging structure, because brokers need to be on the web.
Four Counties Insurance Brokers
Less than fair trade?
As with other correspondents, we too have begun to experience the ridiculous variation in the rating of private car policies between the direct and intermediary companies.
No doubt the Direct premiums will increase when they have secured their target market share. To be fair though, it is not only the Norwich Union.
However, this should be seen in context. It is quite clear the main market is now mounting a serious and determined assault on the broker/intermediary distribution channels. And what better time to do it, when the broking industry is divided and fragmented following the questionable decision to kill off the IBRC.
In addition, brokers and intermediaries under the proposed new GISC rules are quite rightly expected to continue to keep client monies in a separate account. Not so though if insurance is not your main business.
Open the door to all and sundry to flog insurance. Quite the opposite, I am sure, to what most professional intermediaries envisaged. The distribution channel is being manipulated by those with the financial clout. I wonder if the Office of Fair Trading would have anything to say about it?
Jequier Newitt Insurance Brokers
Not 'the' John Sims
On page two of your March 9 issue you printed a story entitled 'Does John Sims ring your bell?' about a man , claiming to be called John Sims, who has been contacting firms under the false guise of being an Insurance Times journalist.
It certainly set my telephone ringing. I am John Sims. I am however, John Sims, personal lines manager at Chubb Insurance Company of Europe S.A., not John Sims, man-of-mystery and wannabe-journalist.
Flattering as it may be to elicit such attentions from a host of people, I can safely say I look forward to future exposure in Insurance Times as manager of Chubb's outstandingly successful personal lines programme, rather than as the unfortunate namesake of this ghostly reporter.
A J Sims
Personal lines manager for UK & Ireland
Senior Vice President
It's Simon's six pack?
I refer to your recent photo of Biba chief executive Mike Williams on back-chat (30/3) and wonder why his head was super-imposed on to a photo of my body – surely this was a mistake.