Independent broker blog: Forget the deals...

This year has seen more focus and attention on the independent regional broker than any other I can remember for a long, long time.

I have a number of the larger traditional insurers beating a path to my door to offer me some initiative or other, the trade press is full of broker schemes and networks and you could even be forgiven for thinking that after years of neglect the traditional high street broker is once again the chosen method of distribution for the major insurance companies.

Strange then that whilst the aggregators and internet in general seem to go from strength to strength all the focus and attention is back on the high street.

It is my opinion that the general public do not like dealing with insurance, hence the appeal of tapping a few keys from the laptop at home in order to manage your own insurance policy and price. I can also see the appeal of volumes it produces for the insurer, the downside, as I suspect that most insurers are now finding out is that in an attempt to make the process simple there is very little data capture with little or no risk analysis and very poor loss ratios.

So back to the traditional broker they come, after all anyone using a broker must be looking for relationship and rapport rather than a simple transaction. The result, whilst not providing the volumes of the Internet, is quality.

Given then that the broker market adds value to the insured and in recognition that we provide a more personal and bespoke approach, it would make sense then for us to be treated in the same way by the insurer, simply re-packaging the same product and service provided by the internet and expecting us to produce different or better results will not work.

I’m therefore afraid to report that if my experiences from the past two weeks are anything to go by, the larger, more traditional insurers and independent brokers remain poles apart. Whilst there have been great efforts made to build bridges and in my view a number of very good initiatives proposed there is simply not the service and support to deliver on their promise.

I, like many of my other broker colleagues. would much prefer a direct relationship with the insurer. This may appear to be old-fashioned and whilst I don’t oppose dealings with wholesalers, I believe it to be part of our approach and appeal. To be able to talk directly with the underwriters, claims teams and decision makers reflects the added value we provide to our customers.

What the insurance companies have failed to appreciate is that we need to react to our clients requests, timescale is more important than price and an immediate response, even if negative can prove to be invaluable.

One of our clients got a last minute opportunity for a job at Birmingham airport, however they needed to increase their liability cover and send confirmation before being granted permission to proceed. The client contacted us on the Thursday and was hoping to start working on the Monday and despite chasing almost on an hourly basis the insurer did not respond until the Tuesday after and the answer was a refusal to extend the cover! Fortunately we had the foresight to contact a wholesaler for an excess layer quote, not only did they respond within the hour they also gave us a price for the remainder of the insured year and a temporary increase for the period of the contract.

The insurer in question had passed our enquiry on to a policy servicing department who had no clue what we were talking about, had they given us access to a trained underwriting technician I’m sure that their response would have been almost immediate.

In the same week we spent days debating the basis of settlement for a total loss offer on a motor-trade policy with another large, established insurer (and not the one your all thinking of!). The engineer took great joy in telling me that he will only make an offer on the basis of “trade” value, this despite proof of purchase no more than seven days prior to the incident of a higher value and in contradiction to the policy wording.

The only helpful comment he could make was that I contact the claims department to ask if they were prepared to agree the short-fall as a gesture of goodwill, this knowing that they would refer me back to the engineer (he was also unable to comment on the policy wording and directed my query to the agency department). In these instances we will inform the client of their right to complain to the ombudsman, however by this time most are completely worn down by the claims process and agree to a reduced claim settlement, well done the insurer, another satisfied customer!

The wholesalers are getting better and better at delivering product and results within acceptable timescales. Their service and support is readily available and our already not too small accounts will continue to grow over the next few years.

I’m very keen on developing closer relationships with our insurer partners and welcome their approach, however, for it to succeed we need to be working together and rather than focus on the "deal” the insurer needs to focus on service and support.

Peter Smits is managing director of The Ashbourne Insurance Group.