Motor premiums are rising and not before time; however we are not seeing the sort of increases that most insurers are reporting.
We’re seeing a-none to shabby increase of around 10% over the same period last year and whilst I don’t doubt those insurers that speak of 20+% increases what that doesn’t reflect is those manipulated renewal premiums for the quality business that both brokers and insurers are desperate to hold onto.
We’re still seeing alternative quotes of around £200 and even saw a taxi quote this week of less than £600, this despite insurers saying that they are no longer providing these sorts of rates. Someone will always find an angle, take a chance and under-cut the “market” rate, I’ve said it before and I’m even more convinced of it now, insurers do not control pricing.
The direct writers are very competitive at the moment and this established distribution channel with some quality providers and products are in my view seeing a resurgence in the market as the discerning customer grows increasingly sceptical of the aggregator model.
Those quality brands have positioned themselves between the traditional broker and aggregator and if we didn’t already know it, are real forces to be reckoned with.
I don’t think these direct brands are as far removed from the traditional broker as some insurers would have us think and the historic response to pricing queries that we “should be able to carry an additional 10% because of our customer service” is no longer true or relevant, the direct writers have a very slick claim process which in most instances is better than the service our clients receive via a traditional route.
In addition the consumer is still in denial, they will not accept premium increases unless it appears on both the six o’clock and ten o’clock news and is headlines in every Sunday newspaper. Even then it will take about a year for the message to sink-in.
The consumer doesn’t really understand the need for increasing premiums, nor do they want to. What they will expect, rightly or wrongly is the increase in premium to be reflected in the levels of service and support they receive, particularly when it comes to making a claim. If our experiences of the last six months are anything to go by, then I have to say that claims services are still failing well short of expectations.
Insurers could in my view do a better job of communicating the sheer volume of fraud involved in insurance to the general public. Make it news worthy, not just a foot-note and don’t just restrict the message to fraudulent claims, raise the issue of the “innocent” consumer and their selective memory when it comes to making insurance applications and highlight the consequences.
We don’t get many complaints, however it is noticeable that there is a dramatic increase in the number of clients complaining about the claim process breaking down, broken promises, failure to deliver a service or faulty workmanship and repairs.
I fully understand that the levels of fraud today have placed a heavy burden on the claim process, however we are in the business of building long-term relationships with our clients and failure on behalf of the insurer, their appointed agent or repairer to communicate with the customer reflects very badly on us.
We understand that it is not possible to meet the expectations of every single client, however at least attempt to communicate when things don’t go to plan or better still try and involve the broker in the process! I’d much rather see my staff making pre-emptive calls to clients to apologise for delays or problems, rather than have a client chasing us, only to get a negative response.
The whole system seems only to serve as confusion with multiple contacts from repairers, insurers and third party providers, we can all do better!
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