Any port in an anti-GISC storm for ABTA and IIB
Any port in an anti-GISC storm for ABTA and IIB
Are we to understand from the story “Ally for IIB in GISC fight”, (Insurance Times, February 8) that the Institute of Insurance Brokers (IIB) and Association of British Travel Agents (ABTA) are collaborating in their misguided fight against the General Insurance Standards Council (GISC).
What strange bedfellows! For years, brokers and intermediaries have vociferously complained about the unprofessional way in which the majority of travel agents and tour operators have sold insurance products.
One could even argue that the selling of insurance products by untrained, non-insurance people led to the establishment of the GISC in the first place.
What irony that ABTA should be clutching at any straw – in this case the IIB – to resist having its members regulated. Perhaps some ABTA members fear that regulation by the GISC will expose their high commissions, lack of product knowledge and questionable sales practices?
It is worth remembering that the reason that travel insurance products attract a hefty 17.5% IPT is because of past abuses by the travel industry. Strange times indeed.
Chairman, The Association of Insurance Intermediaries and Brokers (AIIB)
Don't make me laugh
I read with interest the front page article (Insurance Times, February 8). ABTA as the consumers' champion strikes a sour note.
Very recently I booked a one-week holiday, using a major high street travel agent. It tried to include the insurance cost in the total bill without separately identifying it. When asked the cost staff advised me it was £181 for two adults and two young children. I declined their offer and suggested £60 seemed more appropriate.
The member of staff had a brief conference with a colleague and then offered me the cover for £62.95. If the GISC is going to cost them money, I for one will not be shedding any tears.
As far as I can see, regulation will help to control this type of practice and in the long term can only improve the poor reputation of our industry. In any event you can bet your shirt that the government and consumer groups will tolerate nothing less than a single industry-wide regulator. We may not like everything about the GISC but the answer is to make it work, not to throw up smokescreens or hope it will disappear.
David Ingham ACII
Ingham & Co
I agree with your headline, Time for the industry to get its act together (Insurance Times, January 25) though first, we need to stop looking through the wrong end of the telescope. Your leader is an excellent opening for serious debate and the opportunity to understand how and why Chester Street Holdings, Equitable Life and Drake got into financial difficulties.
You correctly question the role of the regulators, to which I would add their terms of reference and to whom they are accountable.
Clearly the reasons are complex, which is why we need a debate to include all perspectives including the ethical. By the ethical I mean the need to be aware of the saying “Power tends to corrupt” and the fact of corporate greed that has prompted Mr Justice Thomas not only to remind insurers that the duty of good faith applies to them, but also to question whether the thin end of the wedge dates back to the exemption of insurance from the Unfair Contract Terms Act, 1977.
I suspect we may find the cause of the Chester Street Holdings problems can be explained by the cost of moving goalposts, which was not built into the original premium.
Those of Equitable Life and Drake look like the result of predatory pricing, a symptom of the UK insurance industry's malaise.
Insurance Advisory Service
Better by half
Last week's report on the reform of the London insurance market understates the share of IUA members. This is far more than the 44% for which we are given credit.
According to the ABI figures, which are the most widely quoted, the Lloyd's and company market sectors are almost identical in terms of net premium income.
In non-marine treaty reinsurance, the biggest single category, our market share is two-thirds.
Even these statistics, however, fail to do justice to the company market in London. Many IUA members, being licenced in other European countries, do not report to the Financial Services Authority. As a result, contracts negotiated and underwritten in London appear in the accounts of the overseas parent company.
No one knows precisely how much of this business is not counted as London market but, even at a conservative estimate, the companies' real total comfortably exceeds 50%.
International Underwriting Association of London
Strong but not accurate
Very interesting wrapper from CGNU on your latest edition. I notice it includes the broker which apparently went bust for £1m according to last week's edition.
Together CGU and Norwich Union may be stronger to help them throw their weight around, but they are either not too choosy about their agents or “together stronger but just as inaccurate.”
John F Regan
The Insurance Centre
I cannot let last week's edition pass by without commenting on an interesting bit of double-speak from Tom Doherty of Norwich Union (UK's top insurers admit poor service). Mr Doherty says, “I can't remember a time when our service has been better than average”. By definition, average should be in the middle of a range of achievements and not a standard to be aspired to.
Is it a reflection on the main players' service that it has slipped so far that they have forgotten even what an average service consists of and how to measure it?
Roy Rodger FCII
Motor Insurance Consultation and Training
Too little too late
With reference to Richard Mukula's letter (Insurance Times, February 15) regarding Direct Line and its representative on the General Insurance Standards Council board, I complained for years to Yellow Pages about its listings policy, but to no avail.
Ironic, therefore, that last week when I rang to query our entry, I was asked under which section we should be. When I replied insurance brokers, I was asked ‘are you registered.' Too little too late? I hope not.
G B Jones
Vale Insurance Brokers
South of the border
Norwich Union maintains that it costs them more to handle intermediary business than direct. Could it be that is due to their own inefficiency?
Today we received a circular with details of new contract information. ‘Not again!' we thought. Closer examination of the list revealed that all the contact points were in Scotland. While we are England's most northerly (and unspoilt and beautiful) county, we thought that we should check that we are not losing contact with our friends in Newcastle and Leeds. Sure enough, our phone call revealed that this mailing had been sent throughout Northumberland when it was apparently only intended for those north of the border.
As we were only the second caller to raise a query, the spokesperson at NU thought that they should send a correction. Perhaps NU would like to send us a small contribution to our welfare fund for our prompt correction of their error. Cheques should be payable to ‘cash'.
Presumably, our fellow Northumbrians fell into the trap of assuming that anyone south of York will put Northumberland in Scotland and accepted the changes as a fait accompli.
Wansbeck Insurance Services