What’s the matter here? – Manchester Underwriting Management

I sat on a panel at the Biba conference in Manchester in May, for which I and the other speakers were given the subject of Broking challenges in difficult economic times as the name of our session.

The audience were invited to take part in a couple of polls, which threw out results that weren’t totally surprising and showed how challenging this current environment is for all. But, as we know, our industry is all about dealing with problems when things go wrong.

The audience identified recruitment and talent and clients cutting back on insurance protection due to cost of living as the two biggest challenges – and both create issues for brokers.

There is the increased cost of running your business with inflation, salaries and recruitment costs through to advising clients not to reduce their cover, especially when they insist.

The latter can leave brokers exposed to a claim by a client. Should a client make a claim and discover their policy doesn’t respond or the sum insured is inadequate and average is applied, there is a high chance they will look to their broker. The client’s memory of the advice given to them at the time of purchasing insurance is likely to differ to that of the broker advising them not to cut back their cover.

Back yourself up

The best defence for this situation is to make sure you have evidence of your advice and, better still, make sure you have got the client to acknowledge in writing your advice and their decision to reduce the cover.

This may read as something rather obvious, but we still often find brokers’ files lacking in clear-cut evidence when a claim comes in.

Another issue that came up from the poll was that brokers wanted better eTrade systems that are more flexible. 

An eTrade system that forces square pegs into a round hole leaves the broker vulnerable and exposed to a possible claim. Artificial Intelligence (AI) may well run all these things in the future but, in the meantime, it is understandable that brokers want to be able to speak to an underwriter.

Service is an essential part of what we do in our industry and, perhaps, having human involvement alongside the online can actually provide an even better customer and broker experience.

Regulatory concerns 

The other hot topic discussed was regulation. With the implementation of Consumer Duty imminent, we all need to demonstrate that customers are getting value and that the product they are paying for will deliver what they reasonably expect. As frustrating and time consuming as regulation may be, you can’t argue against what it is ultimately trying to achieve.

However, it is an ever-growing part of our industry and that means growing costs for insurers and brokers. That is something we all need to factor in when calculating premiums, commissions and fees.

All of these problems can be addressed, but it will take time. The economic backdrop right now isn’t great but it has been worse and, in time, things will balance out again. In the meantime, we all need to rise to the challenge.