Brokers believe they receive a poor service from insurers, but who is to blame? Andrew Holt reports
Is it a surprise that insurers’ service to brokers is poor? You would think that it’s in the interest of insurers to offer good service to brokers, which are essentially a client and can offer more business potential. But poor insurer service is a recurring problem brokers say.
Graham Gibson, Groupama’s claims director, was involved in CII research dealing with insurer claims service that found the same trend. “It [insurer service] was shown to be truly awful,” says Gibson.
But hang on, don’t brokers have a responsibility to demand a better service? Of course they do,” says Nick Stanton, head of UK and global carrier management at Aon. “But we don’t want to throw rocks over the fence. Dialogue needs to be constructive.”
According to Stanton, brokers have as much a responsibility as an insurer to ensure a good service is delivered. “It takes two to tango. There is no benefit in brokers just slagging off insurers’ service, we need to work together.”
rBut there is the problem of the price that broker clients demand. “Brokers could make a stance, but then they would have to persuade their clients on price, which is always difficult. Price should not always be the determining factor for brokers, but it often is,” says Clive Nathan, Towergate’s chief executive of underwriting.
Groupama is a broker-only insurer, and knows the importance of maintaining a good broker service.
“If we did not offer a really good service to our brokers then they would lose clients, they would go elsewhere and we wouldn’t have a business,” says Gibson.
So what can brokers do? Gibson says that brokers must stand firm. “Brokers need to take a stance and demand they will take their business to other insurers if they do not get a good service. The problem is that price gets in the way, and brokers often place their business on price.”
He says brokers are therefore dealing with the situation themselves. “What is already happening is that brokers are dealing with claims because they are fed up with the insurers’ claims service, and using outsourced claims companies.
“If this continues it will be to the detriment of insurers and they have only themselves to blame.”
Are insurers realising this, and improving? Stanton says yes. “What has changed is that service is more on their senior management’s agenda than it ever has been. Years ago it was about cutting costs, now it is about better service. That is a major change and a good one.”
The biggest issue is how claims are dealt with. “Claims are the main piece, because it is what insurers are selling. Being effective with policies and getting documents out accurately is vital,” says Stanton.
Gibson adds: “Being effective and efficient in your claims service should not be too much to ask.”
If insurers didn’t regularly make a mess a policy documentation, brokers wouldn’t be besieging their phone , he says.
Another broker says: “Claims handling has deteriorated significantly across the board. This puts a strain on the best relationship.”
“Brokers are dealing with claims because they are fed up with the insurersâ€™ claims service
Graham Gibson, Groupama
But it’s the availability of quality staff that counts, says Gibson. “The demand for technical staff will increase, despite the fact that it is already difficult to get good technical staff, and certain claims jobs are being dumbed down,” he says.
Towergate’s Nathan says: “Insurers are very good when it come to the plain vanilla areas, but when it comes to more complex issues they fall far short.”
Groupama’s Gibson says that offshore call centres have much to answer for. “I am not having a go at individual insurers, but if you have a call centre in the back of beyond which does not know our culture you are not going to get the empathy that clients need.”
And does size matter? “I think it does,” says Aon’s Stanton. “Usually, smaller firms are better at service than bigger companies because of their more personal approach.”
Nathan adds: “Good service costs money, and many insurers have typically looked to cut costs. That is changing, but slowly.”
Anecdotally, brokers are rewarding insurers with extra business if they can provide some kind of field underwriter service .
Another issue is that of insurer staffing – both in quality and quantity. Many brokers highlight the sheer difficulty and waste of time in getting through to their insurers. Not surprisingly offshore call centres are despised the most.
One broker sums it up: “We’re all fed up with pressing one for this and two for that and listening to your tinny music and assurance that our call is important to you. If it was that important, you would have enough people on hand to answer it.”
gGetting through is of little help of course if the person on the other end is clueless. Too often, it seems, brokers find themselves unable to reach anyone with decision-making ability.
Most major insurers do not have sufficient resources, which results in service levels varying between poor, at best, and dreadful,” says another broker.
Brokers are not happy about the level of centralisation and bureaucracy in today’s large composite insurers. The feeling seems to be that it doesn’t fit their business model. To their clients, a broker exists for advice, to negotiate suitable cover at a competitive price and to ensure that any claims are paid promptly.
Yet with the larger insurers, brokers are seemingly struggling to achieve any meaningful personal contact or influence. Some brokers are forming the impression that certain insurers see them not as partners, but as a set of middlemen to be tolerated only until all business can be brought direct or through a few favoured brokers.
Summing up the feelings of many, the broker adds: “The problem is that personal relationships are not made between insurer staff and broker staff. On many occasions, you do not really know who you should be talking to. Also many underwriters do not fully understand risk, probably due to lack of training.
“Gone are the days when you could pick up the phone and discuss an aspect of a policy and ask to be flexible or creative in their approach.”