Ataraxia chief executive Stuart Randall says insurers are failing small and medium-sized brokers on service
Insurers are failing to service small and medium-sized brokers because they’ve stripped out their servicing capabilities to save money, Ataraxia chief executive Stuart Randall says.
Instead, insurers are concentrating their resources on serving their top-list of big brokers.
Speaking in this week’s Insurance Times special Biba edition, on independents v consolidators, Randall says: “The big issue is that most of the big composites have dismantled their structures which previously enabled them to deal with large number of brokers.
“They’ve concentrated on the big numbers. So they’ve let the small and medium-size guys go by, not provided them with service, dismantled the branch structures so that the people in middle and lower sector in size have suffered, and the insurers do not have the infrastructure to be to service those brokers properly.”
Randall says e-trading is not the magic bullet to solve this problem.
“Insurers have forgotten how to deal with medium-sized brokers and now do not have the tools to deal with them. They can cry SME and they can cry e-trading. But just because you cry e-trading it does not mean people want to deal with you.
Randall bemoaned the cutbacks in visits from insurer staff to small and medium-sized broker offices.
“When I started insurance, it’s a horrible phrase, but it remains true to this day: it’s a people business and people like dealing with people. If you have relationship with someone at an insurance company, you’ll do quite a lot of business with them because of that relationship and the insurers.”
Finally, Randall said brokers need a break from the constant grind of having to pay for the costs of regulation, which are causing overheads to go up.
“Where is the broker supposed to make that money back? It’s ridiculous. Having said that, insurance is a far better occupation to be in than many other people out there.”
Click hear to read our analysis on how consolidators and independents are faring in the current climate.
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