Getting cover for 'Mr Goody Two Shoes' is easy, but what about the rest of us? Simon Clayton explains
Let's imagine two men in their local pub enjoying a couple of well-earned pints of Hubble-Bubble bitter. They move from the bar and sit down at a table, on top of which is this very publication, left, no doubt, by some junior underwriter who popped in for a quick one before hurrying home.
"Just what you need to make your heart race," says Drinker One, "a magazine devoted solely to the subject of motor insurance."
"Indeed," says Drinker Two. "Do remember to pass it over when you've finished, I won't sleep tonight unless I catch up on the latest insurance waffle."
This ironic exchange could be said to summarise the entire notion that motor insurance is, and always will be, seen to be inordinately dull.
And, of course, why shouldn't it attract that sort of thinking? Our two friends in the pub don't want it, they both buy it because, as law-abiding drivers, they have to.
The conversation continues, "Mind you, it's a nightmare to get nowadays."
"What? Sleep?"
"No ... motor insurance."
"Surely not, you can't turn on the TV without being bombarded with motor insurance adverts, let alone pick up the paper."
"That's fine for you, Mr Goody Two-Shoes, with your clean licence and your sensible family car. You try ringing round with all my penalty points, my daughter driving, and that old Nutter Turbo of mine. The amount of times I've heard the 'we're very sorry but ...' phrase doesn't bear thinking about."
So, is the challenge for insurers to make motor insurance exciting?
No, because it can never truly be a 'sexy' subject. The challenge for insurers is to somehow satisfy the needs of all customers, whether in the mainstream - as typified by Drinker One, or the non-standard customer - as illustrated by Drinker Two.
So how does the market do this?
Ignoring all the inevitable cries of "over-simplification" that this will provoke, I would suggest the following:
- Direct insurers should concentrate on high volume, low average premium, standard cases, where economies of scale add the best value
- Broker-only insurers should focus their efforts on lower volume, high average premium, non-standard risks where the brokers' expertise and client knowledge makes the difference
- The largest insurers will have feet in both the above camps and, as long as they hold true to the different approaches, can succeed in both areas
- Some motor brokers may find that they can secure arrangements with certain insurers that enable them to compete with the direct writers.
But, if they can't, then concentrating on the 'drinker two' type customer and working hard to match his diverse needs, will pay real dividends.
At Markerstudy Group, we proudly serve the needs of Drinker Two customers, only through a UK wide network of insurance brokers who know how to add value in the non-standard arena. We help potential customers to find these intermediaries through the 'Broker Search' facility on our website www.markerstudy.com and go to great lengths to inform and support these brokers with good products, good service and a great team.
To help keep costs down, we also push most of our business through full-cycle EDI, which is vital to brokers expense ratios nowadays. Finally, we try to emphasise the fun element in what we do through a variety of broker hospitality and entertainment.
We can only hope that the second drinker in our story reads this and ... find a broker, hopefully one with a Markerstudy agency.
- Simon Clayton is group operations director at Markerstudy Group.
