I thought I would pass on details of some recent conversations with former clients, both of whom have now taken their business to a well known supermarket that offers motor insurance quotes on the internet.

I have had concerns about this way of transacting business for some time and these discussions have reinforced my suspicion that although the public may be quick to use internet insurance services to save money, this may be done by compromising the validity of their cover.

The information below has been condensed and exact details changed to protect the innocent but the general gist of the conversations is accurate.

Customer A: "I've got a quote that is £150 lower than my renewal with this supermarket on the internet and so I've taken out a policy with them."

Broker: "Did you give details of your two claims last year?"

Customer A: "No because they were thefts and weren't my fault, so they don 't need to know about those do they?"

Customer B: "My daughter-in- law has been on the internet and got a much lower quote for my husband, so she set up a policy for him while we were away on holiday."

Broker: "Did your daughter-in- law give details of your husband's diabetes and his heart condition?"

Customer B: "No, she thought it would put the premium up."

The above conversations were with customers who had been doing business with us for many years and people I would have considered to be honest and trustworthy. However, when it was suggested that their insurance may not be valid due to non-disclosure of information the response from both parties was along the lines of: "But the premium was so cheap I couldn't turn it down, and the insurer would never find out any- way so why should I care?"

On the point of disclosure of material facts, which we as an industry see as an essential part of an insurance transaction, how will non-disclosure be looked on where the quote has been obtained by a well-meaning, but misguided, relative who has decided to show off their amazing computer skills by taking on the mantle of family insurance adviser?

I suspect that any insurer concerned in such a scenario would seize the opportunity to declare the cover invalid and the policyholder would no doubt have a major dispute with their nearest and dearest.

The providers of high street retailer-branded internet insurance services, that advertise on the basis that their premiums are low, must be aware that their customers will buy insurance with the same mindset that they use to buy their weekly groceries: "Cheapest is best and who cares about anything else."

I suspect a significant number of otherwise honest people will take advantage of the fact that insurance providers are now giving them the opportunity to enter underwriting information on the keyboard of their home computer.

Hence they will avoid the possibility that their non-disclosure may be recorded on tape during a telephone conversation.

Some other members of the public will find their cover affected simply because they are incompetent.

If car insurance is simple enough to buy on the internet at the same time as ordering your weekly groceries, why do we need regulation? And who will be affected the most by regulation, the professional advisers or the providers of own-brand label tins of baked beans, chicken nuggets and now motor insurance?

Our industry is being taken advantage of by those who market their services on the same basis as everything else they sell.

The insurers, not the woman on the supermarket checkout, will pay the price eventually, with mis-selling stories and accusations of being quick to accept premiums but not to pay claims, and the reputation of the insurance profession will continue to suffer. (Can 't wait for the first "Three for the price of two "promotion.)
Peter Hardy Manager
A V Wilson and Sons

HSE risk control
I hope the HSE ("HSE forms group for liability crises", 22 August, Insurance Times ) have more success in persuading insurers to reward those companies that do follow good practice with regard to health and safety at work.

Until now, most have just paid lip service to it when it comes to under- writing the risk. You just get the feel- ing that they think it is something that is important, but they are not sure how much and to what extent they should take it into account.

The overwhelming priority is what I want for the risk due to the trade and size, and to hell with giving out any reward for investing in risk controls.

The reduced capacity in the construction market now is just another example of the pigeon-like past slackness of insurers coming home to roost.

Who knows, if the HSE are successful with construction under- writers perhaps they could turn their fire towards other classes. -- Craig McGowan McGowan Corporate Services

ATE underwriters
David Faithful quotes Lord Hope in the Callery v Gray decision (July, Legal Report ): "Unless the new regime is controlled very carefully its effect may be to benefit after-the-event (ATE)providers unreasonably and to place a burden on liability insurers which is disproportionate."

While I agree that the ATE market is a young market and still needs to find its level, the idea that ATE providers are alone in creating their premiums, and therefore creating an uncontrollable private market, is not altogether correct.

Already we are seeing that some of the larger ATE providers are having to come clean as to who is underwriting their policies.

For example, Law Club Legal, the ATE insurer behind National Accident Helpline's Benchmark policy, has recently changed its name to show that it is actually part of the Allianz Cornhill Group.

Composite Legal, whose business development manager recently invited constructive talks among both liability insurers and ATE insurers (25 July, Insurance Times ), is underwritten by NIG.

Perhaps we will see in the future that the other large insurance companies will become part of the ATE market, and that in fact the market will be controlled by the usual liability giants.

To suggest that liability insurers should get together to create a system for personal injury claims would reduce even further the choice a claimant would have in independent advice.

Perhaps there should be more transparency on the liability insurers' behalf as to how they are actually combined or linked with ATE insurers. -- Mark Collins Partner Bakewells Derby

Highway bullies
There has been much controversy surrounding conditional fee agreements (CFAs) and there is the possibility that a lot of clients may actually be asked to pay unwarranted premiums.

I was therefore not surprised to read (15 August, Insurance Times ) that Andrew Gibson `faltered 'when questioned over Crusader, its blatant disregard for existing legal expenses cover was certainly not in the clients ' best interest.

I was pleased to see that Gibson admitted that Highway have not always done as well as they should have done with their broker relationships. I would suggest that Gibson has some way to go if he is in fact to make sure it never happens again.

It is still my experience when visiting WiseCall existing brokers and new brokers that there is pressure to use Crusader, with the underlying threat of losing their agency if they don 't conform. -- Donald Rodger Director WiseCall

No-fault liability
After reading Roy Rodger's letter (22 August, Insurance Times ) I feel that he has somewhat missed an important point.

The no-fault system, (incidentally under consideration in neighbour- ing Oxford), would simply be a licence to print money.

I believe that the system suggested in Oxford is that cyclists would receive £50 for any incident regardless of fault.

What an excellent idea. Nobody would dream of making a living from riding bikes into stationary cars. In fact, I have a better idea. Why don 't we remove fault from all liability claims?

PS. I do have something against cyclists - they ride bikes instead of driving cars -- L Kendall Leisureinsure. co. uk

Charity cover
Charities need not despair, despite the stark warnings offered by Peter Beaumont of Harrison Beaumont (1 August, Insurance Times ).

Undoubtedly many insurers are responding to the harder market by focusing on their core business.

Some charities and other small organisations have found that they are unable to renew with their existing insurer, or can only do so at a vastly increased premium.

However, charities are not on their own. Zurich Municipal's Community Insurance Centre (CIC)has come to the rescue of a number of organisations facing closure because they could not secure insurance.

One extreme case involved the British Trust for Conservation Volunteers (BTCV), which had to instruct thousands of volunteers to down tools when insurance was not renewed by the existing insurer -halting countless conservation projects around the country.

Alternative cover was arranged through Zurich Municipal and the groups were quickly back at work.

We are long-term supporters of the voluntary and charitable sector, and will do all we can to spare these organisations from insurance-related crises that prevent them raising funds or bringing benefits to their local communities.

If you are aware of any charities or other small voluntary organisations faced with closure simply because they cannot secure insurance,do please refer them to us on 0845 725 4910 or via community@zurichmunicipal.com -- Ronan Ball Underwriting manager Zurich Municipal Community Insurance Centre

Holiday subsidy
My company transact a considerable amount of travel insurance and consequently we receive a large number of cancellation claims.

The airline or tour operator must be delighted to receive a notification from the unfortunate traveller advising of the cancellation. The person is then directed to his insurer who pay in full for his un- used holiday.

The airline or tour operator then re-sells the holiday, and bearing in mind it has already made its profit on the original deal, any resale is 98%further profit.

Because of the nature of the con- tract between the traveller and the carrier, the traveller does not own the trip, and therefore this cannot pass to his insurer which has by now paid for it . The argument that used to apply, that it is feasable that the holiday would remain unsold is no longer valid. With modern technology, a holiday can be cancelled one minute, instantly remarketed across the world and be resold.

Potentially this may have to be discounted, but this is not a problem, even if the operators make only an additional 50%profit (at peak travel times the discounts disappear anyway).

The cost to the travel insurance industry for cancellation claims runs into many millions of pounds, a considerable proportion of which subsidises carrier profits.

It is unlikely that the airlines and operators would be willing to disclose these additional profits or enter into discussions in this matter for obvious reasons. So do we as an industry simply continue to accept this?

I would suggest a simple proposal. Cancellation wordings are changed whereby the claimant must notify only the insurer, not the operator or carrier of the cancellation.

We pay the full cost to the claimant as we do anyway. The traveller simply does not turn up on the day.

The net result is that the seat is empty and the accommodation unused, but not re-sold. We are in no worse a situation than at present and neither is the policyholder.

It is then possible that the carriers and operators may be inclined to discuss the matter.
-- Name and address withheld