Having read many letters to the editor about the General Insurance Salesman's Club (GISC for short), I am coming to the conclusion that my many years in this industry must have addled my brain.

I have obviously missed a very important point when Richard Sheik and Mike Slack, people for whom I hitherto had a modicum of respect, are extolling the virtues of a regulatory body controlled by insurance companies. Have they forgotten that this is the same group that brought the industry such wonders as the pensions mis-selling scandal and the Assocation of British Insurers (ABI) claims code?

To propose that the General Insurance Standards Council will in any way offer consumers protection is at best misguided, at worst highly dangerous. The level of service that most insurers offer is woeful, and as the ABI claims code demonstrates, things are unlikely to get any better. If insurers had ever considered the needs of their consumers, or felt that some regulation was required, they had the chance to demonstrate this by supporting the Insurance Brokers Registration Bill 25 years ago.

As those of us who were around then can remember, insurers actively campaigned against the proposed legislation – possibly because they would have lost influence over the then distribution channels.

Now regulation has reared its head again, they are in favour of the GISC, a body over which they will be able to exert pressure.

I would like to state that my company is not a member of the Institute of Insurance Brokers, but I do believe that any regulation must, above all, be driven by the needs of the consumer, not the industry regulator. Self-regulation of all the varied distribution channels in our industry, through one body, the GISC, cannot effectively protect the public.

Finally, I would like to quote from a British Insurance Brokers' Association leaflet dated August 1998 and headed Essential Facts About Insurance Regulation for all Brokers. It states that: “The Treasury supports the group's proposal that to be effective, any new regulatory regime must be independent of trade bodies.” Laughable, or what.
Robert Osborn
Castlebank Insurance Brokers
Leatherhead, Surrey

Incentive scheme
Your correspondents are not the only ones annoyed by the courts' fairly relaxed attitude towards uninsured drivers. Their frustration is shared by many, including members of the Motor Accident Solicitors' Society (MASS), which has long advocated windscreen insurance discs to aid detection – a move never wholeheartedly supported by the insurance industry.

On the other hand, one cannot blame an understaffed and overstretched police force for treating uninsured drivers as a low priority. For them, it's an offence that is difficult to detect and not really worth their while detecting when they do.

If insurers really want the police to catch uninsured drivers, I suggest a scheme whereby insurers generate revenue of, say, £100 to the police for every uninsured motorist apprehended.

Remember the case of speeding, where fixed-penalty fines have been enough to inspire forces nationwide to spend vast amounts on technology, speeding blitzes and officer resources.

If the same incentive were offered to the police regarding uninsured drivers, we might suddenly find detection rates mushrooming.
Ed Wegorzewski
RKGP Solicitors

Near enough will do?
What a wonderful thing automatic postcode addressing is. A few months ago it led to our receipt of a customer satisfaction survey from Hill House Hammond (HHH), despite the fact that we are insurers, not HHH clients. You can imagine our surprise.

Evidently, the letter was meant for a resident of a flat above our offices, but because HHH uses postcoding software, and Consignia (formerly the Post Office) does not differentiate between our offices and these flats, it was put through our letter-box instead.

Today, matters have taken another turn. Although HHH is ultimately owned by Norwich Union, we received a Norwich Union renewal notice addressed to HHH, at our address. By the way, the letter was dated April 3 and the policy was due for renewal on March 23.

One would hope that Norwich Union would have some idea where HHH offices are located, wouldn't you? But not only have they managed to forget where those offices are, they also seem to be having a slight problem over their backlog.

Still, it's nice to know they treat parts of their own company as badly as independents.
Ian Mantel
Manor Insurance Services

Norwich reunion
I am pleased to see Norwich Union announce that it is undertaking an “exhaustive review” and redefining its pricing strategies “with the ultimate aim of resolving the more exceptional motor premium differences between quotations offered to brokers, compared to those from other distribution channels, including Norwich Union Direct”.

I hope the exhaustive review is taken up by other insurers, who clearly either:

  • allocate an unfair share of operating costs against the structure of car insurance premiums presented to insurance brokers (so direct marketing premiums can be reduced because of an artificially lower operating cost basis); or
  • present to insurance brokers premiums that are set deliberately high to create a greater layer of eventual profit compared to direct marketing; or
  • strategically lower direct marketing premiums to create a greater turnover and bigger market share, even though this larger turnover actually creates a loss.
    Malcolm Ward
    Cumbria Insurance Brokers

    Justice for assessors
    I know the treatment of loss assessors has been raised several times in your letters pages, but it is still concerns me.

    Loss adjusters are paid by insurance companies to act on their behalf. Yet, loss assessors, who also work to reach the same amicable settlement, have to look elsewhere to obtain payment for their services. A claim is only settled where all parties are in agreement.

    If a case goes as far as court, the insurance company is represented by the loss adjuster. Surely, however, the client cannot be expected to represent themselves?

    Loss assessors are just as involved in achieving a settlement as their loss-adjusting counterparts. Isn't it time something was done to treat them fairly?
    Mohammad Yunus Chowdrey
    M Y Chowdrey Loss Assessors

    You do the maths
    Ross Hall's Tech Talk column of March 22 questions the idea that it is more cost-effective to reach customers via the internet than through a direct mailshot.

    When he was offered a presence at an online event, he said he was promised that 20,000 people would visit the site, so that the £2,000 he would spend would work at £1 per customer.

    He disputed this figure, pointing out that many people would be idly surfing through the site, some would be competitors rather than potential customers, and some would be journalists, students or other people unlikely to increase his profits.

    By his reckoning, only 10% of visitors would show further interest in his business, and that would make the cost of reaching each customer over the internet the same as that to reach them by mailshot.

    However, I would argue that his reasoning is simplistic, and omits a few salient facts.

    The online event to which he refers was mrmr-ifs2001.com, the first virtual conference for the insurance and financial services industry, which ran from February 19 to March 2. My company took part and can tell you that there were 7,500 registrants to the event by the end of the first two weeks.

    However, the site will remain accessible for the next 12 months – greatly increasing the chance of attracting potential customers at no extra cost.

    Furthermore, Mr Hall seems to have forgotten that direct mailshots are uninvited "junk" mail, and therefore likely to be thrown immediately in the bin. They are more expensive to organise than participation in a website, but if they get a 2% response, they are considered to have achieved a decent result. If they get 5% response, they are thought of as excellent.

    No one is suggesting that we abandon marketing through traditional channels, but the 2% to 5% hit rate achieved by direct mailshots makes Hall's mooted 10% from a website look good by comparison. And remember, you are not approaching people cold on a website; they've visited it voluntarily.
    Peter Taylor
    Insurance Solutions Limited
    Croydon, London

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