The worst may be yet to come in the ongoing PPI debacle
It’s the never-ending story. As we report this week, brokers face paying for yet more PPI mis-selling by banks and credit broker cowboys (page 7). The High Court has backed the FSA’s order that every business that sold PPI and has had claims upheld against it must write retrospectively to all customers, inviting them to complain if they feel they have been mis-sold to.
The FSA itself estimates that the ensuing tidal wave of claims could put as many as 35 credit brokers out of business. The scandal is that, while the credit brokers can just pack up and go home, struggling general insurance brokers will be left to foot the bill. Under the current structure of the Financial Services Compensation Scheme, brokers have to pay out towards meeting complaints against credit brokers that have gone bust.
The FSA acknowledges that something is seriously wrong, yet it has kicked the long-awaited review of the system into the long grass, claiming its hands are tied by Brussels. It’s outrageous – and no one will take responsibility. Insurance Times will keep on campaigning for Fair Fees for brokers. Show your support at insurancetimes.co.uk/backfairfees
• Personal lines broking is back, there’s no doubt (just ask the audience at our broker breakfast, page 14). The major insurers have been quick, as ever, to promise brokers the world. Their motives are clear: business through aggregators is fickle and often runs at a loss. But brokers can add the two magic ingredients: customer loyalty and cross-selling.
Yet, as we know, what’s said at the top is often not heard at the bottom. In exclusive Insurance Times research, reported in last week’s Knowledge (still available online), three-quarters of brokers said that insurers have become less supportive, offering fewer and/or worse deals than last year. Only 4% said matters had improved. Clearly, insurers have some way to go to convince brokers of their commitment.