The letter from Peter Blanc entitled 'Renewal retribution' (Insurance Times, May 4) illustrates very clearly a symptom many brokers have long since recognised, which is that underwriters, in many instances, lack the necessary skills to assess premiums and terms with any degree of accuracy.
This is, of course, a sweeping statement, as there are many excellent and highly skilled underwriters in the market, but in general terms we are experiencing a rapid decline in such skills within the industry.
It is hardly surprising, therefore, that underwriting results should also deteriorate.
Those companies anxious to secure market share at any price and those that employ statisticians in place of underwriters are the ones most likely to produce knee-jerk reactions when their results are published.
I am constantly surprised at the relative short-sightedness of insurers – again perhaps this is a symptom of the ever increasing change in personnel brought about by mergers in a desperate attempt to provide a 'quick fix' mainly for the benefit of shareholders.
The most successful accounts (those that genuinely generate both growth and profit) are forged between brokers who have a genuine understanding of underwriting principals and insurers who employ underwriters with a greater understanding of the risks and exposures with which they are involved.
Unfortunately, the broker's skills are all too often ignored by the underwriter, whose relationship with the client will often provide information that is not always readily available to the underwriter, such as his overall attitude to insurance, his responsibilities to risk management and health and safety, the standards by which the business is run, etc. These ingredients, along with claims history, should all form part of the underwriting process, both at inception and renewal of the risk.
All too often, underwriting a book of business is adopted from a statistical point of view only, resulting in both underpriced as well as overpriced products.
I would urge both insurers and brokers to work in closer co-operation, otherwise underwriting will continue to be a lottery and a rollercoaster ride for all those involved (including the client).
South Woodham Ferrers
What would the Germans do?
We all know that insurance companies that have merged or that have shareholders to satisfy seem to fall short on 'acceptable' customer service standards, especially claims departments.
The cause of the problem is, of course, finance. As usual, depending on which side of the side fence you work, the solution is to spend money to save money. After all, the fact that the cost of additional staff and proper training would result in a significant reduction in leakage and improved customer service cannot be ignored. However, companies never seem to find a "good" time to test this argument. Market forces and potential takeover threats need to be guarded against, the share price must be wrong. The vicious circle is at the best of times very frustrating.
The question – to which I have no answer – is why do policyholders, brokers and the ever more stressed claim handler accept this situation and the low standards of service?
If I were a customer or broker I would take my business elsewhere; it amazes me that more do not. As for the claim handler, it seems that there is an attitude of "well, that is just the way it is". Although I must stress that the majority of us continue to try hard.
But what would the Germans do? From a customer point of view, I am sure that they would go ballistic if they did not receive prompt, efficient customer service and then take their business elsewhere. It is what the Germans are used to and what they expect.
Perhaps the real issue here is, if we all condemn poor service and go elsewhere, then the vicious circle of not spending money to save money and thus improve standards will finally be broken.
Fed up with your body? Get a new one…
I was amused to read your headline on page one of Insurance Times May 11 issue, which claimed "Injured To Get New Body". Might we conclude that this is the latest form of New-For-Old insurance?
Power to the Paddick
I have never been a great fan of Andrew Paddick, but – I hate to admit it – he was right.
It is obvious from the comparison you printed on page one of your newspaper today that the level playing field we were all promised has now, once again, become an uphill struggle for insurance brokers.
The GISC has managed to ensure that the professionals are more regulated than the supermarkets or travel agents – and they wonder why we are not enthusiastic!!! More power to your elbow, Mr Paddick – here's hoping that you can convince Tony's cronies.
Quantum Brokers Ltd