Insurers provide an abysmal service
Insurers provide an abysmal service
Ann Manning's views, which she expressed so eloquently in “Letter of the week” (October 26, “Stand up, unite and demand reforms”), are absolutely right and deserve the support of our colleagues to complain to insurers about the abysmal service they provide. Not only that, but in the eyes of our clients they are dragging us down to their level because we are unable to provide customary information at renewal review meetings, such as rates and discounts.
Unfortunately, those of us who feel this way are on a hiding to nothing. Have other brokers noticed how so many letters and endorsements sent out by insurance companies do not make sense? Grammar is appalling and when one telephones, some individuals can hardly speak in sentences.
The number of mistakes made by insurers is time consuming and expensive for the broker, but when we have asked insurers for compensation for putting us to extra expense the request is usually met with the pat phrase: “It is not our company policy.”.
Well, it is not my company policy to continue to deal with such complacent insurers. Until these matters are taken seriously by insurance companies we will never regain the service and rating structures of old.
Finally, I would like to throw a thought into the ring. We have all heard of stealth taxes. Are we now about to suffer commission reductions by stealth? I am thinking of the merger of CGU and Norwich Union (NU). The former used to pay us 20% commission for household, whereas NU only paid a miserable 15%. Now that the merged companies have decided to use NU name does this mean we are going to find our commission reduced to 15%?
If so, perhaps we should all agree now to transfer the business to wherever it will also benefit the client.
Grim picture unnecessary
I believe your article on how health insurers may make use of information generated by genetic testing (Insurance Times page 4, October 19 “Health insurers do not rule out genetic tests”) painted an unnecessarily grim picture of the impact this will have in the future for customers and insurers.
Like all evidence-based medicine, the results of genetic test will only serve to indicate a patient's propensity to develop an inherited condition. Just as we know there can be a familial trend towards heart disease, with a need for some patients to monitor their diet, cholesterol levels and exercise, so genetic tests will for the most part only indicate a patient's probability of developing an
Like other information, genetic-test results would constitute just one part of the information collated together to determine the risk in providing health cover for an individual.
Of course it is reasonable for insurers to fear that widespread availability of genetic testing might result in insurance attracting the customers left feeling most vulnerable. But that is why we should focus our energies on ensuring that whatever the outcome of the genetic testing debate, we operate in a level playing field. If genetic testing is to be made available, it is only fair that customers and insurers should both have access to the results. Perhaps if we lobby for a level playing field now, we can avoid being painted as the “Uncaring insurers creating an underclass of the uninsurable” at some point in the future.
strategic planning and marketing director
Misys got it all wrong
A few years back, the initial presentations regarding the launch of Polaris received a vitriolic backlash from Misys. Misys flew in the face of that joint venture which aimed to create standards to reduce costs in the distribution of insurance products. The reason was financial. Misys had the most to lose from it as it would not be possible for it to defend the exorbitant charges to insurers.
Software Houses such as NMT, Policymaster and CSC have embraced the standards. They have invested in accepting Product-writer output and embedding the RTE.
Misys then struggled with the insurers positioning re Polaris and went to great lengths to create a solution called Superlogics. This was supposed to be the Misys way of “translating” Productwriter output.
Misys then spent a vast sum of money on creating Screentrade. Screentrade competes directly with Misys' traditional insurance intermediary customers. These customers have been extremely poorly served by severe under-investment by Misys in developing the core back office insurance applications.
Misys knows it cannot sustain the insurer charges, it cannot increase intermediary charges, and it has little chance of sustaining market share, let alone growing it. Why on earth do they think that their trad-itional competitors should readily embrace an initiative they are spearheading and replace their own quotation systems with a Misys one? It does have a childish ring of “I am not playing unless I am in charge”.
From another perspective – have the top six insurers finally lost the plot? Can't they see that they are again paying Misys through the nose just to stop new entrants that would be a significant threat to Misys? I understand there are needs to drive down costs but why consort with the devil? The insurers not in this initiative are being asked to spend £100k to join. Wasn't that about how much they had to pay Polaris?
Julie Rodillosso's comments regarding “what are we supposed to do while Misys deliver this – go on holiday?” hit the spot. Misys want all other new entrants to go away so they retain their stranglehold.
In summary, the insurers should stick to common standards, which they don't. Misys should spend its efforts on developing core applications. Market forces will mean that alternative portals will enter the arena. The new entrants will have refreshing propositions not based on power wielding activities. As for the intermediary, if you, can wait until the middle of 2001. The hype will have died down and some bright spark may come up with a way of you seeing the wood for the trees.
Missing the point
Are the insurance industry's best interests being served?
I refer to your article “Showdown for net Systems” (Insurance Times, October 19).
Brokers could hear champagne corks popping from Leeds to Bromley! Another £28m into the direct writers' war chest and more costs piled on the intermediary channel.
The proposal of yet another insurance
solution costing tens of millions of pounds, with which all brokers, insurers and software houses will have to comply will certainly lead to some form of monopoly – never in the best interests of an innovative industry.
Such initiatives are great on paper, the ideas easy, but implementation is difficult: markets throughout the world thrive on competition and freedom of choice. The internet brings these qualities plus
A single set of standards forced on insurance users misses the point and is a backward step, not remotely in the spirit of the internet. Whose standards are they anyway and just how many brokers have even been consulted ?
The internet is a fantastic opportunity for insurers and brokers to increase their efficiency. It can be used as a common trading platform for the delivery of product and data at almost zero cost, thereby improving productivity and reducing costs.
The technology to achieve this is in the marketplace now. Polaris (one industry standard) is already being used for motor insurance on the net with full cycle
capability (new business, policy adjustments and policy cancellations) and free data transfer (EDI).
Brokers do not need more expense; they need freedom of choice and systems which will reduce their costs while providing flexibility and ease of use. Insurers need systems that will reduce their costs and improve the delivery of product and the receipt of data.
What levels of functionality are promised, can they be integrated with existing systems, why is it being done and who is paying? These are all questions that need detailed answers.
I believe that most brokers would agree with me that software houses are notorious for not living up to their promises when it come to delivery dates or actual costs. Most brokers are at best sceptical while others are rightly cynical. £28m is a great deal of money and a planned four-year development an eternity in “web” time. What we all know is that the customer will ultimately have to pay.
I would respectfully suggest that the insurers look closely at the interests of the brokers and existing technology before committing huge sums of money to a system that is likely to be outdated before it has started.
Direct writers are already using the internet successfully. Are they being given another five years of advantage at the expense of the brokers?
Quote & Buy
Need to go deep
If the owner of an item of plant who had had an insurance engineers inspection pre-cover, but not a LOLER examination which states that the equipment should be thoroughly stripped down, examined, tested and put back together, would they, in the event of an accident, be insured without this certificate?
As far as I can tell, insurance engineers do not go far enough into the inspection.
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