Household insurance is again becoming as safe as houses. Bacon & Woodrow estimate the market just sneaked into profit last year after losses of £350m in 1998 (see page 2). This is welcome news. Now all we need is a similar story across the board.

But a closer analysis of the actuaries' commentary gives rise to concern.

Commission and costs are too high, according to the number crunchers (remember, actuaries are the people accountants think are boring).

Although insurers only paid out 68p for every £1 of premium in household during the 1998 losses (compared to £1.20 for every £1 in motor), the grey suits at B&W complain that expenses and commissions were too high at 40p in the £1.

This is the classic bean counter mistake of knowing the price but not the value.

We might talk about products and product lines but insurance is really a service industry, and becoming increasingly so. Cross-selling products is another way of discussing how to provide the customer with a full service that meets all of his or her needs.

And providing that level of service does not come cheap. You need well-trained, highly motivated staff. And you need enough of them to answer all the calls.

If you programme into your telephone system a message announcing "all lines are busy, please call back later" you have not taken customer service seriously.

Yes, cut out inefficiency. Yes, take advantage of technological advances. Yes, find new ways of working. But cut service levels to make your products cheaper? No.

Don't listen to the men in grey suits.