Brokers perceive direct writers as the biggest threat, but claim the internet is a necessity. Insurance Times finds out what people in insurance think about new developments in the industry
With a long list of concerns to choose from, brokers still view the direct writer as the biggest threat to the sector, according to the Insurance Times survey, conducted on the second leg of the Spectrum 2000 roadshows.
Over 50 intermediaries were surveyed in Wolverhampton, Nottingham, Cardiff and Exeter, and were asked their opinions on a host of issues that are affecting the insurance industry.
In addition to direct writers, mergers and insurance company service levels were top of the list of current threats, as well as competition from banks and supermarkets.
Yet despite fears over consolidation in the marketplace, only half of the respondents felt that insurer mergers were causing confusion and irritation among their client base. One broker commented that it wasn't their client base that was feeling the confusion, but brokers themselves. Another thought it was time-consuming to explain the changes to the market at every renewal.
Insurers perceived to have the poorest service levels differed from region to region, but Norwich Union, CGU and Axa were listed consistently. In Exeter, Highway was also admonished. Among the companies praised for service levels were NIG, Fortis and Zurich.
Norwich Union was also criticised by the majority of respondents for dual pricing, with one respondent questioning whether they were actually interested in their broker channel.
The brokers were also split about whether they should go for chartered insurance broker status. Some felt it would provide no particular gain, while others thought it would improve their professional status and image to consumers.
One broker commented: “Even though it creates the professionalism seemingly required by the industry, it appears to be just another bureaucratic attempt at our expenditure.”
Another broker said he would consider it, but only if a single status was offered, as there were too many different organisations at present.
Despite the differing views, the vast majority of respondents agreed that they needed to be more professional in their marketing and communications, even though many felt that their expertise was rising.
In regard to the on-going technology debate, most respondents saw the internet as an opportunity rather than a threat. Some even went as far as to say that it was a necessity.
Yet still less than half of the respondents stated they had a marketing website, and only five said they had an interactive quote website.
The good news, though, is that the majority of respondents have set up an email facility, despite concerns about technology costs.
The survey questions:
1. Which insurer, in your view, has the worst record for service standards, and which has the best?
2. Which insurer is the worst offender for dual pricing (the direct arm quoting being different from the broker channel)?
3. Would you go for chartered broker status as proposed by the Charted Insurance Institute?
4. Do you see the internet as an opportunity or a threat?
5. Are you online and if so, in what capacity?
6. Do you believe that brokers need to be more professional in their marketing and communications?
7. Have you found that all the insurer mergers are causing confusion and irritation amongst your client base?
8. What do you consider to be the biggest threat in the broking industry?
9. Do you believe that broker expertise is rising?