Direct and broker personal lines core products put on a level playing field

Zurich Retail is aiming to unify its rating systems for direct and intermediated products.

The move, by Zurich's personal lines business, is intended to head off criticism that has been levelled at composites about different pricing structures for direct and intermediated business.

Brokers have criticised insurers for selling cheaper products though direct channels, savagely undercutting the broker channel offerings.

Zurich Retail managing director Ian Owen explained that, by the end of the year, Zurich should be able to produce core products that were based on a set of risk criteria drawn from existing direct and intermediated products.

Then, explained Owen, the appropriate marketing and distribution cost could be added. For direct business this would include costs for call centre operations and advertising, and for intermediated products this would include commission.

Zurich Retail head of IT and e-commerce Steve Grieve added that if there were a complaint by a broker about differential pricing, Zurich could demonstrate that the broker product was rated exactly the same way as the direct product.

Grieve said that the project started before Christmas and was due to go live later this year.

  • Zurich Retail has also developed a guide to flood risk management that brokers can hand out to customers.
  • The leaflet will be available at the end of June and an accompanying website will go live in the summer.

    The leaflet will provide advice about what to do to prevent flood water entering homes. For instance, it will advise using vent covers and other aperture closers as well as kitemarked anti-flood products.

    It will explain that you don't have to live in a flood plain to suffer a flood, as in 2002, half of flood damage happened outside floodplains.

    Zurich's leaflet will also talk about how to restore properties following a flood so that they will be affected less next time around. For instance, it will recommends alternatives to chipboard kitchen units, use of concrete ground floors and moving plug sockets higher up the wall.