Insurance is certainly a very risky business

Insurance is certainly a very risky business

Regarding the article “Axa management need power says broker” Insurance Times September 14.
I would like to respond to this article as
a commercial underwriter often faced with
a similar scenario. However I am in no way saying that the way the cover was withdrawn was handled correctly or incorrectly – with little detail surrounding the negotiations and authorities of any individuals concerned I would not like to say.
As an underwriter for an insurance company such statements as “the Health & Safety Executive confer with them over safety procedures” does not in itself equate to the risk being acceptable to an insurance company.
This would suggest that the risk meets with the minimum standards required by law and does not necessarily mean it meets with a company's underwriting criteria. In the same way, compliance with building regulations for property risks does not mean automatic acceptability by an insurance company as with so many other legislative minimum requirements.
Comments such as the above by many brokers, and often to account managers when visiting, are too easily taken on “face value” as acceptability criteria to write risks on the book without a full understanding of the risk itself.
I totally agree the account manager's role is a demanding one that would be assisted by brokers not making broad-brush remarks without further detail or within national journals.
Andrew Moore

Conference All systems go

Re: “Brokers attack NMT systems,”
Insurance Times, September 14. With regards to the comment attributed to me, what was meant was that I believe the NMT system is, at long last, getting there and I believe it is only a short step away from being usable. I did also make comments similar to those attributed to Anne Pluckrose in that we are not impressed by what rival software houses have to offer. I believe the NMT system will be better than the rest when all the problems are ironed out.
I would, however, like to take their marketing director, Jacquie Boast, to task for her comments about brokers not investing in the memory and hardware to keep up. NMT laid down the specifications required for their system to perform. We invested in higher specifications than advised by NMT and still performance is not up to speed, as her managing director, Barry Singh, is fully aware.
Perhaps if Boast came out of her ivory tower once in a while and spoke to, and listened to, brokers, she might learn about what it is like in the real world. It certainly would achieve more than always finding someone else to blame.
Her remarks are most unfortunate and will only inflame brokers and shareholders who, until now, have been very patient. She certainly will not help the marketing aspirations of NMT and Ockham.
John Fox
Bevan Fox Insurance Brokers
Tamworth, Staffordshire

Don't get carried away

Re: Tony Cornell's article “Beware the dark destroyers”, Insurance Times September 7, in which he suggests “[brokers] should carry higher rates than requested as often as possible”.
While I am not sure of the point that Cornell was making, the statement quoted above could be misinterpreted to suggest that brokers should engage in the practice known as “carrying” premiums.
This is a practice whereby an underwriter will indicate that he is prepared to write a risk at a particular rate, for example 0.5%,
but would prefer to receive a rate of 0.75% . The broker then advises his clients that they have obtained a quote of 0.75% which the client may then agree to.
If the broker does not disclose to his client that the underwriter will write the risk at the lower rate, in my example 0.5%, the broker will have breached his duties to his client by failing to act in his best interests. In addition, to the prospect of civil proceedings by the client, the breach of duty by the broker would once have amounted to a breach of Lloyd's bylaws, giving rise to the possibility of regulatory proceedings for misconduct.
Furthermore, if the facts were that the management of the broker involved was aware that the practice was being conducted by its employees the company itself could have been the subject of similar regulatory proceedings.
While the General Insurance Standards Council has yet to show its hand on how it intends to treat these issues, the council does not have the power to institute similar regulatory proceedings.
Kenneth Underhill,
Reynolds Porter Chamberlain.

Beating a new path

Insurance Times' recent private motor supplement suggested that Ibex had made a decision to “quit” the non-standard motor market and we felt it would be helpful to clarify the position for your readers.
Ibex does not carry a “non-standard” insurer label and it has not specifically targeted this sector of business in the past.
As for the future, with a new trading name – Chaucer Insurance – and the opening of
a new office complex in Whitstable, the company is looking to build on its underwriting strengths in private motor, fleet and affinity business, while introducing new non-motor personal lines insurance products.
Of course, the door remains open to new business opportunities that result in a profit – irrespective of the label.
We are also actively seeking to expand our intermediary base, so perhaps you'll forgive us if the mood at Chaucer Insurance is rather more upbeat than your article implied.
Mary Towndrow
Chaucer Insurance
(Lloyd's Syndicate 587)

Driven to distraction

I note that are only asking five questions for a car quote on its website.
While more questions may be asked if the client proceeds and there may be a hefty declaration, it makes our car quote system look very sad.
Thanks to Polaris, we now ask many more questions than ever up front. It is now so onerous to give a car quote, that my staff and I are cringing when a car quote is required.
The ivory tower-living Polaris people probably never even contemplated consumer friendliness when designing its complicated systems.
To cut a very long story short, the insurers, the software houses and Polaris are going to have to compete with the simplified direct systems, or we may as well give them all of our business now.
Yours stressed out
PS does anybody else think we have the worst insurer service ever right now?
John Gray
managing director

How can one have faith?

What faith can policyholders and brokers put in long-term undertakings (LUT) when insurers feel free to not only break agreements but actually ignore them at the first renewal.
An LTU was entered into in good faith with a major insurer on a liability policy in 1999. However, at JCB Insurance Services we have spent almost 12 months trying to get said insurer to issue inception documents with the 5% LTU discount.
At first renewal, the client having suffered three claims in the first year, underwriters denied that the risk was under LTU as there were not enough cover sections taken up on the contract. However, they would generously agree to adjust the inception premium to our collected amount. Under no circumstances would they agree to the LTU.
Fortunately, we have nearly three weeks in which to obtain alternative terms from the market. In another instance, we were advised just six working days before renewal that insurers were not honouring the LTU.
Two instances from different insurers of their attitude to LTUs.
As brokers, we know the importance of strong relationships with insurers to obtain the best terms for our clients. However, time and again, that trust is being broken.
At the end of the day, the professional image of the industry is affected yet again. Where does it leave us? In an ever-shrinking market, brokers and their customers are at the mercy of what appears to be a cartel.
Kathryn Faulkner,
JCB Insurance Services

School of thoughtfulness

Reports on the Southsea flooding (Insurance Times, September 21) prompted me
to write.
Knightsure Brokers is broker to Mayville High school which was the school mentioned in your article as having suffered a £500,000 claim. This figure is fairly accurate and we have nothing but praise for the speedy reaction of Ecclesiastical and Miller Pycraft, its appointed adjusters.
The flooding occurred Friday lunchtime, resulting in timber classrooms and a hall being flooded with water and raw sewage. Less than 24-hours later agreement was reached to demolish the classrooms in view
of the likelihood of contamination. During the ensuing five days, temporary alternative premises for the school were sourced and equipped, demolition started and a £50,000 interim payment was on its way to the client.
The school re-opened off site on Monday September 25 – thus avoiding a potentially substantial loss of revenue claim.
The headteacher and school trustees had nothing but praise for the speedy and positive response of the insurance industry.
Tony Knight
Knightsure Insurance Brokers