Viva Aviva:: McMillan deserves high praise for ‘Systems Thinking’ strategy

I like to think that I keep my finger on the pulse of what is happening (or not) in the UK general insurance industry and I am ashamed that, perhaps the most significant change in recent years, has completely passed me by! I can only attribute this to a form of blindness brought on by years of short-lived, occasionally ludicrous, strategies and initiatives launched by past Aviva management and that sapped the morale of their employees and saw them shed good business in favour of large premium commitments…many containing unknown exposures!

Perhaps I should have dug a bit deeper when they took a stand against Towergate earlier this year. I can only claim that my cognitive bias was brought by having to listen to a former “leader” – surely a graduate of the same business school as Fred Goodwin!- attempt to spin (that is as polite as I can be) strategies that were patently spawned by the unholy triumvirate of GREED, FEAR & EGO.

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Insurance: could Zurich initiative provide virtuous spark?

Well done to Zurich for leading the way! Greater collaboration can only be good for the market and, therefore, for customers.

There has been a real lack of innovation (that benefits customers)  in the General Insurance market as competition between insurers, for market share, has seen the extreme pressure upon the integrity of individuals, products, processes and services result in increasing complaints, industry-wide, reputational damage and (inevitably) more regulation – with all the associated costs. A real vicious circle.

Perhaps the lesson from other industries has, finally, been learnt and more collaboration can re-ignite innovation for the benefit of customers and long term good of the industry…

A virtuous cycle. Now that would really create peace of mind and as much certainty as we can realistically expect in such uncertain times!

Huerlimann said the insurer was approached to make the data public and create a standard so the firm set about piloting the database and bringing it to the market.

"What this does is create peace of mind and certainty. The database is fully traceable and auditable so it can be defended in court if it comes to that," he explained.

Responding to a question whether this meant Zurich has lost a competitive edge he said: "We have had five years of competitive advantage and now we need to open it up the market as a standard. We can’t afford to have every insurance firm investing multi-millions pounds in these projects when the market needs it now."

via Ferma 2011: Zurich has opened its compliance database to the broker market – Insurance Insight.

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UK Insurance: Nobody expects the Spanish inquisition…again!

Just in case anyone who read this thought “that doesn’t really apply to the broader [general] insurance market” and that I may be totally wrong to suggest that further questions may follow, you may want to take a look at this. Also from OFT and relating to the motor insurance market BUT with implications for activities involving household, motorcycle and commercial vehicle insurance

The OFT today published, for consultation, commitments offered by the insurers Ageas Insurance Limited (formally Fortis Insurance Limited), Aviva plc, AXA Insurance UK plc, Liverpool Victoria Friendly Society, RBS Insurance Group Limited, Royal Sun Alliance and Zurich Insurance plc, and the IT software and service providers Experian Limited and SSP Limited.

The formal offer of commitments by the parties follows an OFT investigation into the exchange of broker pricing information between insurers in the private motor sector through the use of an Experian Limited pricing and competitor analysis tool, Whatif? Private Motor.

The tool, widely used throughout the industry, allows insurers to access not only the pricing information they themselves provided to brokers but also that supplied by other competing insurers. The OFT, having investigated the matter, warned the firms that certain features of the information exchanged through WhatIf? Private Motor raised competition concerns under the Competition Act 1998 and/ or Article 101 of the Treaty of the Functioning of the European Union…

I come back to the REAL POINT of what I am trying to get across. The insurance industry is not serving its policyholders as it should. Just because current investigations haven’t touched upon activities in the Commercial and Corporate market does not mean that future investigations will not. In fact, insurance professionals who still care about the industry should probably welcome such investigations for I fear this may be the only way that we will rid ourselves of those intent upon bleeding the market to its long term detriment!

I really never really thought of FSA or OFT as anything like the Spanish Inquisition, except insofar as the element of surprise is concerned. I reckon most people would be very surprised if they brought about any kind of change to UK Financial Services, that benefitted the customer/policyholder, despite any good intentions! Needless to say that, if my understanding of this investigation is correct, this is much more about protecting the interests … Read More

via Get “fit for randomness” [with Ontonix UK]

UK Budget 2010: Insurance Premium Tax hike and rate increases to follow

LONDON - JANUARY 26:  A worker uses the lift o...

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Bad news for UK business but this may only be the start! You may get the impression from the following that it is only a matter of time before insurance premiums rise and you would be right. Responsible brokers will already have warned their clients to be prepared because they recognise the value of communication in a genuine business relationship. Particularly in such a difficult trading climate.

Unfortunately, many (some would say most!) “intermediaries” will not be so forthcoming. They will leave it as late as you will let them because it is in THEIR interests that they leave you little or no time to seek alternatives AND that they retain your business at an increased premium. Of course there will be the usual empathising and rhetoric but, at the end of the day, this is the time that many brokers (and insurers) have been waiting for. The time when aggressive growth strategies, aimed at capturing market share, start to payoff. DON’T ALLOW THEM TO “PLAY YOU”.

If you want VALUE insist that the pre-renewal process commence at least 2 months prior to expiry of your existing cover and that a thorough review of your current cover, future needs and past claims – ask for a claims print out for the last 3/5 years for each policy – is carried out.   YOU set the deadline for their response and I would recommend at least 3 weeks prior to expiry…if you are not happy with what they offer you may need that time but, at least you will have all the information you or another broker will require to help you.

Assess their proposals based upon more than price. Consider terms, conditions, excesses, insurer security, claims handling and the service that the broker provides – do they offer agreed service standards?

ONCE YOU HAVE ALL OF THAT REMEMBER that you are entitled to ask them to detail their earnings. What commissions are they receiving from the insurer?


They are obliged to tell you and, once they have, you can judge for yourself if the service they provide is worth the money and whether any empathising was sincere. You could be in for a BIG (and nasty) surprise but, by adopting this approach, you may just secure the means to “soften” or balance the impact of rating increases at a time when your business needs it most!!!

I am happy to provide a personal and impartial opinion too.

Post Magazine: Bluefin CEO Stuart Reid has admitted a more significant increase in insurance premium tax may have further delayed a hard market.Commenting on the changes to insurance premium tax, Mr Reid said: “While we would have preferred Insurance Premium Tax to remain fixed, the standard rate rise from 5% to 6% will be welcomed by many, especially as there had been much speculation that it could have risen as high as the new VAT rate of 20%.“Clients will be pleased for obvious reasons. Insurers will breathe a big sigh of relief because a more significant increase would have put pay to any ability to influence premium rates upwards, something not yet happening in many areas but which will be needed sooner rather than later.”

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Will insurers adopt tools for NOW to minimise risk tomorrow?

Why are insurers ignoring the facts?

Why are they still trying to predict the future using incomplete data, assumptions and flawed models?

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