C4 Dispatches:: insurance industry – profit before people


The insurance industry, consistently, dispels the myth of “honour amongst thieves”. In this programme we see it through the lens of motor insurance BUT bad practice doesn’t stop there.

If you didn’t watch the programme…you should! Follow the link embedded in this picture (may only work in UK – sorry!).

motor ins ripoff

For the sake of clarity, you may, also, wish to consider the definition of the word that the Office of Fair Trading used to describe the motor insurance industry: DYSFUNCTIONAL

Once you have watched the programme I reckon you will understand why.

dys·func·tion·al

/disˈfəNGkSHənl/

Adjective

  1. Not operating normally or properly.
  2. Deviating from the norms of social behaviour in a way regarded as bad.

Certainly NOT what you expect when you pay such large premiums every year!

I have spoken to a wide range of senior industry people and (as you will see from the ‘Related articles’ below) written about insurance industry practices on many occasions. But the insurance industry aren’t good listeners…particularly when you are telling them why and where they are going wrong. Apparently it doesn’t help even when you present them with solutions and alternative strategies!!! What was considered to be “bad practice, has, gradually, evolved from accepted practice to become common practice. Over the last 30 years (in particular over the last decade – despite Regulation) “the model” has superseded the customer as the No. 1 priority in every area EXCEPT FOR MARKETING.

IF their marketing accurately reflected how the industry actually treated their customers they could slash that budget and invest it in delivering what customers’ pay for!

Ironically this programme appeared on the same evening that BBC aired an episode of Rip Off Britain that didn’t show the insurance industry [Regulated by FSA] in a terribly favourable light in relation to fire and flood claims. This didn’t come as much of a surprise and, although not factors in the cases they covered, the entire insurance claims process is in an unwanted (but justified) spotlight. A recent article regarding the failure of Merlin and some dubious industry practices has attracted an incredible amount of interest and comment. It led to an interview that appeared in the insurance press [Post Magazine].

Realistically the subject of insurance rip-offs could be the subject of an entire series on any number of channels BECAUSE THEY ARE NOT TRUSTED…NOR SHOULD THEY BE. UNTIL SUCH TIME AS THEY CAN OFFER A HIGH LEVEL OF TRANSPARENCY IT IS A CASE OF CAVEAT EMPTOR.

The UK insurance industry: victims, enablers, perpetrators and beneficiaries of fraud FOR WHICH WE PAY. You have been warned…again.

Related articles: read ‘em and weep!

2 Responses to C4 Dispatches:: insurance industry – profit before people

  1. My response to a comment on a recent Linkedin discussion on the subject:

    DC:
    I saw the programme – and yes, you were right Mr Lodge it was the big bad insurers at fault again. The motor insurance industry has been fraught with problems for years and, I’m sorry Mr Lodge, most of these do indeed stem from the insurance companies – (rolling over on dodgy third party claims, referral fees, a lack of customer service etc). I do however agree that we do need balance in these things but not sure where this can come from when things have been allowed to get so bad.

    David Wilson •
    Danny: I don’t really think it is a case of “been allowed to get so bad”. It is a fundamental component of the failed banking model that they exported as a lending condition to every other sector! The bean-counters, Consolidators and egotists loved it so underwriters’ concerns were not deemed relevant. Dissenting voices have been ignored or silenced.

    The same bully-boy tactics are still in evidence, hence the insistence of anonymity by so many in the programme (http://wp.me/p16h8c-1ug). There aren’t too many willing to speak out about some of the highly dubious practices (variations on a theme) in property claims management, that have led to calls, in Parliament, for Loss Adjuster Regulation…although some former Merlin employees have, anonymously, provided some information (http://wp.me/p16h8c-1f0).

    TCF is and always has been window-dressing or a tick-box exercise for the most successful insurance organisations. That is, of course, if success is measured according to growth, GWP and market share i.e. model first, not customer satisfaction, retention and similar. As long as all the customer facing stuff is in order compliance isn’t a problem. Except that the industry is reputationally damaged, less trusted than banking, the subject of an increasing number of customer complaints and, as a result, subject to yet more Regulation!

    Go figure!!!

    The wilful blindness to more meaningful metrics has long been a frustration and it saddens me that there are so many “sheep” who go along with it. How many have overlooked the paradox, in past Broker Service Surveys, of the largest/most successful organisations (often paying the highest commissions and overriders in return for volume NOT profitability) being the one’s with the worst service?

    If the industry truly understood contagion and the nature of systemic risk they would appreciate the inherent dangers. But the numerous warnings or inconvenient truths are swept aside in favour of meaningless predictions based upon a, now past era (http://wp.me/p16h8c-1tX).

    I know we share some similar views but, unfortunately, contrarians like ourselves are in a small minority – as a result of years of industry-wide conditioning &/or ignorance. So, when it comes to raising valid (if controversial) points the size, rather than the wisdom, of the crowd prevails.

    It’s a shame when the facts get in the way of the stories the industry likes to tell itself. Baaaa!!!

    David

  2. This expose now on APPG agenda for meeting at Westmister on 29th January…I will be there.

    http://www.postonline.co.uk/post/appgifs-blog/2237055/motor-insurers-in-the-parliamentary-spotlight?goback=%2Egmp_4161534%2Egde_4161534_member_205445702

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 230 other followers