Insurance Brokers have many qualities, but self-promotion is not one of them and over the years we have not been particularly great at publicising the benefits of using our services.
But following the recent widespread flooding, it is perhaps an appropriate time for a little blow of the brokers trumpet and an insight as to some of the work done, much of it unseen.
Insurers generally respond well to large scale disasters when they are in the media spotlight, although they are a bit like politiciansand can respond differently once the media lose interest. Inevitably not all claims are going as smoothly or quickly as policyholders had hoped and some insurers are now receiving media attention for the wrong reasons, although insurers can’t magic water away and properties have to dry out.
It is at the time of claims that brokers can truly prove their worth, providing vital initial advice, along with guidance through the claims process, so you know what to expect and where relevant, the options available. The majority of claims are generally straight forward and may, to the client, go smoothly, but behind the scenes the broker may well have been chasing and liaising with insurers and loss adjustors to negotiate a fair settlement. A few years ago research by the British Insurance Brokers Association showed that brokers generally negotiated fairer claim settlements than those dealing direct and if there are complications involving cover, under insurance or betterment, do you really want to be on your own?
And it is not just claims where you need a broker, nowadays there are many ways of arranging insurance and the personal lines insurance market in particular has been revolutionised, firstly by Direct Line and more latterly the price comparison websites. Most car and home insurance products have now become commoditised, seemingly all providing similar covers, but when the detail is examined the differences in policies can be marked and not necessarily suitable for an individual’s needs.
The trend to commoditisation has also started with business insurance (generally small business products at the moment) and if you buy online it will be a ‘non-advised’ sale, where you are given details of the insurance contract and you decide if it is suitable for your circumstances. The information will include a summary of cover that is supposed to include all significant exclusions (they don’t) and most then get you to ‘tick the box’ to say that you have read and understood the full policy wording, knowing that the vast majority of customers do not!
By contrast, the service offered by brokers is far more than transactional, with most providing professional advice by reviewing the risks you face, explaining terminology such as material facts, exclusions and warranties before recommending suitable covers to best protect your business. Getting the choice of cover and insurer right in the first place avoids problems with claims and it shouldn’t stop there. As important is the on-going advice. Businesses change and adapt over time, so do the risks that they face and it is vital that insurance coverage is kept up to date.
As mentioned earlier, insurance brokers have not been great at PR and failure to publicise the benefits of the services they provide made it easier for the direct insurers to enter the market. The opening up of new distribution channels has made the UK market extremely competitive, but the concern is that there has been a ‘dumbing down’ of products with cost being the overriding factor at the expense of cover and the Chartered Insurance Institute are now trying to change the public perception of insurance by promoting professionalism in the industry with ‘Chartered’ awarded to both insurers and brokers who meet certain standards.
As technology continues to advance and customer expectations increase, insurance brokers, like all service providers, face the challenge to show that they continue to provide a valued service at competitive pricing. As with all products, it may be cheaper elsewhere, but the phrase “you pays your money and you takes your choice” come to mind.