Comments on stories appearing in Insurance Times and on the www.instimes.co.uk over the past seven days
Investment in training will bring profit
Lord Hunt is absolutely right to highlight the vital role of training in the insurance sector (“We must ramp up our approach to training” Comment, 15 May).
The CII’s finding that 76% of employers in the sector are experiencing technical skills shortages sits uncomfortably with persistent underinvestment in training. Evidence of the strong link between investment in training and development and business success continues to mount.
A recent report from the Institute for Employment Studies (IES) surveyed 3,000 employers and found that a 10% increase in investment in people management and skills development can generate a £1,500 increase in profits per employee.
An enlightened minority of insurance firms have clearly taken such findings to heart. But despite the ready availability of high-quality insurance specific training through initiatives such as the CII’s own Broker Academy many are still doing little or nothing about training. As Lord Hunt rightly says, professionalism and skills development are indeed two sides of the same coin. Recognition as a profession would certainly be nice. But why invest in training? For profit of course!
Ian Jerrum, managing director
Searchlight Insurance Training
Points on commission disclosure
The FSA, and most letters in these columns seem to be missing fundamental points in the debate about commission disclosure.
Every broker dealing with the SME market knows the difficulty of getting clients to understand the important details of coverage and conditions, when their primary interest is in the premium. Commission disclosure will rank closest to premium in the client’s attention. It will distract the client further from the important factors affecting his insurance decisions, and concentrate his attention the broker’s justification for his commission.
My second point concerns the long term effect of commission disclosure on broking services. Mandatory or strongly encouraged commission disclosure will force commission significantly down over time, inevitably reducing staff remuneration and eventually the calibre of staff.
My third point is that commission disclosure will not stop at SMEs. There is no logical difference in this respect between SMEs and consumers. Only large commercial buyers have the manpower to balance all the factors which should concern them in their insurance purchase. Price competition, and to a lesser extent regulation, have already driven brokers out of much of the consumer market. Commission disclosure will finish the job.
Biba is looking for an industry-led solution. There is no single solution. Fees have their place for large customers. Let us disclose commission in a clear and structured manner when asked, but do not encourage it.
The FSA seems hell-bent on destroying the very market which best serves the customers it protects. Writers have called for brokers to write to the FSA. You have only yourselves to blame for the consequences if you fail to do so.