The Knowledge: Personal lines property - the people

The underwriter

Guy Lawrence, LV= underwriting director

“The majority of our business is motor. Home is our number two product and it’s growing steadily, partly owing to the motor account. We’ve probably got about 3% market share, so we’re still quite a modest player, but because of our rapid success in motor over the last five years we’re now looking at how to grow and diversify in other areas.

“While rates have gone up over the last few years, they still haven’t got to where they necessarily should be. The fact that it’s a competitive market is definitely putting downward pressure on price, and while people don’t shop around as much as they do in motor, that is changing.

“My understanding is that the Statement of Principles is not going to be renewed. The question mark is over what’s going to happen in its place. My perception is that there’s broad support among insurers for the ABI Flood Re proposal. However, it may be that there’s a need for a transitional arrangement, or that the Statement of Principles will have to be continued as a temporary measure. Otherwise, we just go to a free market, which could be bad for customers in certain areas.”

We say …
An insurer like LV= could make inroads if it gets the positioning right, especially through affinity partnerships.

The consumer champion

Paul Cobbing, National Flood Forum chief executive

“We’re seeing a spike in people who are trying to buy or sell properties having difficulty getting insurance, especially when properties come up as being at flood risk. We’re certainly seeing sales fall through as a result of that in a way that wasn’t happening six months ago, and people are concerned about what’s going to happen next.

“From our discussions with interested parties, we’re assured that the government is close to an announcement. If the answer is to have some sort of a pooling system, then there are questions over how you organise it, how it’s paid for, what risks are being undertaken in supporting it and what the fallback position might be.

“The key thing for us will be to examine the detail very carefully to get an understanding of social justice issues. If people are falling through the net in some way, then we need to be able to pick them up and help them.

“What we really want to see is something that clearly identifies the parameters - what’s in and what’s out - and how people are going to be protected. It’s got to be clearly presented so that everybody understands, and when somebody goes for insurance they understand what they can do.”

We say …
Independent advice, tracking policy and helping flood victims fills a gap between insurers, policyholders and government.

The loss assessor

Phil Morgan, Morgan Clark chairman

“We represent the policyholder, looking after their interests and helping them through a difficult process. Generally a flood of two or three inches doesn’t require our assistance and can be dealt with by the insurance company, the loss adjuster and their restoration company.

“A loss adjuster may have 50 or 100 clients to see, and our experience over the past decade has been in dealing with irate customers waiting for the loss adjusters to arrive. The response of loss adjusters to flooding over the past year has been far better than in the past. It has changed considerably, which is great for the policyholders.

“When it gets above two feet, it becomes a serious problem for the building. There may be structural damage. Surveyors may be required, and that’s where we come in to manage the process for the policyholder.”

We say …
Providing policyholders with unbiased information can help to smooth the claims process.

The regional broker

Richard Talbot-Jones, Northern Counties Insurance Brokers associate director

“The storm around Newcastle and Gateshead lasted for most of the afternoon and in to the evening of 28 June. It caused mostly flash flooding, because the ground was already saturated owing to previous rainfall, which led to roads being damaged, tarmac being torn up, traffic islands washed away, the metro being flooded and train tracks swept away; as well as landslides and derailed trains. I’ve never seen anything like it.

“It was slightly worse for private houses than for commercial properties, because in homes people have more stuff on the floor, rather than stored at height.

“In terms of damage to the properties, the flash floods meant that the water went straight through the properties, rather than a river flood in which water remains in the flood plain for a longer period of time and takes a day or two to drain away. With flash flooding it’s there and then it’s gone, which limits the damage somewhat and costs insurers less than a traditional flood. For example, after our clients reported the recent flood, many of them were back home again the following week, despite having had quite a lot of water in.”

We say …
A broker who knows the local area is able to add value to householders and insurers as an intermediary.

The claims manager

Andy Craig, NFU Mutual property claims manager

“After the two really cold winters in January 2010 and December 2011, there were thousands of claims that cost millions of pounds across the industry. Households generally have more plumbing now, whereas in the old days people would have a toilet in the garden. In modern properties you tend to have two and even a full en-suite bathroom. Combined with plummeting temperatures and records being broken left, right and centre, you’re seeing more burst pipe claims.

“Properties are usually insulated with a view to keeping it warm inside, rather than protecting the pipes. There needs to be a shift in focus to try and get piping more insulated. It tends to be in the loft area where you get the bursts, around the water-tank, because it’s cold up there.

“The other issue has been flooding. We’ve had so many flash flooding incidents this year, and we’re in the middle of one at the moment. I would like to see more money being spent on flood defences.”

We say …
Insurers with a rural footprint, such as NFU Mutual, are potentially more exposed to extreme weather claims.