Uplifting standards

Working in partnership with brokers has changed dramatically in recent times. The constant pressure on brokers to comply with FSA rules has seen to that.

It used to be - as long as the provider delivered a satisfactory standard of service - that entering into a partnership depended largely on the rate of commission. Not any more. Failure to comply with FSA regulations represents such a threat that brokers are now far more demanding of their partners.

This is slowly transforming the industry by pushing standards ever-upwards and creating innovative new ways of doing business.

- WNS Assistance, which expects to handle around 350,000 motor claims this year on behalf of brokers, insurers, and large commercial fleets, has always worked closely with brokers.

But extensive research carried out partly by Insurance Times last summer revealed that many brokers were dissatisfied with their existing claims management service and were looking for a new partnership. The 'FSA effect' meant that they now expected more and were determined to get it.

Spotting a business opportunity, WNS recruited a dedicated team of broker 'champions' to service all business with WNS's existing broker customers.

The results have surprised us. In the first instance, brokers are now far more aware of their service provider's Standard & Poor's rating, with many demanding an AAA rating.

Gone are the days when brokers shopped around for a better deal on accident management with different providers simply for a few more commission points.

The impact of the FSA means that the pedigree of their partners is all-important. And if they find the right partner, they stick with them.

That, in turn, means that the pressure they put on that chosen partner to deliver a consistent level of service excellence for their customers has reached new heights. The key measures now are the speed - and amount - of recovery. 'The cheque's in the post' is simply no longer acceptable.

Brokers, in short, use the quantifiable success of their service to differentiate themselves from the competition, making the cost of the service more palatable to customers.

Another aspect of the 'FSA effect' is that brokers have been forced to sharpen up their business skills. With commission rates now often taking second place to service excellence with many brokers, they are having to find new ways to expand sales to make up for the deficit.

The bottom line is transparent success delivered through a consistent reduction in both down-time and the average vehicle repair cost. Allied to this is a growing demand from brokers for accident statistics that will show their customers that they leave nothing to chance.

One important issue here is the broker response to the widespread concern among fleet decision-makers over the Corporate Manslaughter Bill currently going through Parliament.

The new law will hold companies to account for failing to take reasonable care for the safety of their employees or members of the public and is widely regarded as being particularly applicable to business drivers.

The upshot of this is that WNS's own real-time motor claims information website, Motorguard, has seen a doubling in both the number of users and frequency of use in the past two years.

So far, these developments have affected brokers of all size and geography in much the same way. But significant differences also exist within the marketplace.

One subtle change we have discovered is the growing popularity of after-the-event (ATE) insurance with mid-to-small brokers. It seems that cost-conscious fleet decision-makers are highly susceptible to buying an ATE policy following a motor accident rather than a uninsured loss recovery policy to cover their entire fleet. And the benefit for the broker is that the commission for an ATE policy is relatively high and also involves less effort to sell.

Another subtle change in the market involves regional variations in the way brokers do business.

Different priorities exist in different regions. But this is a highly complicated issue and better left for a separate occasion.

We have been particularly impressed with the ambition of certain brokers who see the greatly increased competitiveness of the market resulting from 'the FSA effect' as a wonderful opportunity for growth rather than the reverse.

These brokers look to benefit from their own positive response to the new conditions not merely by seeking to offer better services than their competitors but also through acquisition of those less efficient than themselves.

This can only make for a stronger market in much the same way as pressure on car repairers from insurers and claims management specialists has improved standards and reduced average accident costs. We welcome the trend, particularly because we see it as presenting new opportunities for partnerships.

- Tim Rankin is managing director of WNS Assistance.