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Where do general insurers go from here?

Thursday, 13 September, 2012 1 Comment

Stating, what should be, the bleedin’ obvious…IF the industry cares as much as its marketing says it does!

Moving away from the old ‘acquire and exploit model’ that general insurers have been using for years requires a huge change in mindset. Especially when it involves bucking the trend within the industry and communicating a proposition based on value and service while others are fixating on price.

However, I’m afraid the old strategy just isn’t going to work in a world where consumers can compare prices and share experiences at the click of a mouse. Giving existing customers a compelling reason to stay and do more business with you is surely the way forward as customer sentiment can spread like wildfire online. It will therefore be those that have engendered positive perceptions from their most loyal customers, who retain and attract the most policyholders and who are subsequently most profitable in future years.

via Where do general insurers go from here? « UK Insurance.

Filed under Business Change, Insurance Industry, Organizations Tagged with Insurance Broking

CII Thinkpiece on networking:: the smell of bs in the morning…no thanks!

Wednesday, 12 September, 2012 1 Comment

I’ve been in this business for a long time and, despite there being plenty of people able to bear witness to the fact that I’m a pretty “social animal” the truth is I have always despised networking! I cringe at the type of gathering that has, otherwise typically reserved Brits, feign joy because somebody who sells printing or dry cleaning services has just done some business with the person who sells life assurance or will writing. It’s all…well, how can I say this, FALSE! There is never the enthusiastic whooping and hollering of a Jerry Springer show and I’m sure an awful lot of that is down to the simple fact that most people are there under duress. Their boss or their sales figures sent or led them there out of desperation and the first measure of their success is how many business cards (even compliment slips) they offloaded or collected!

Nor am I keen on engaging with people purely on the basis that there might be some business in it. Exchanging pleasantries and small talk over a glass of wine and canapés whilst trying to ingratiate ourselves to each other would give anyone indigestion.

If these are the basic ingredients for forming worthwhile, longstanding, business relationships then, to me (because this is only my opinion) the business world (particularly in Financial Services) IS as shallow and undeserving of trust as it has consistently shown itself to be in recent years. The thing about it is that, ALL the people who recognise these scenarios from their own past experiences are both vendors and buyers of a range of different products and services! So, we know bs when we smell it in the room or on our new best friend’s breath. Often it is the smell of fear or business-sponsored insincerity worn like an ill-fitting suit!!!

Survey:: UK insurance “enjoys” a serious lack of trust

Thursday, 23 February, 2012 1 Comment

Bloody Meerkats and an endless stream of unimaginative and downright infuriating caricatures sums up the “bounded creativity” of an industry whose idea of innovation has been dulled by years of squeezing every ounce of customer value out of products and processes to feed its insatiable appetite for revenue…and, hopefully, underwriting profit!

Insurance: Feed the beast but ignore the elephant

In particular, the Personal Lines market is so deep in a rut of its own creation that, for all any of us know, this meerkat (I will concede they are cute!) may be a scout sent to see what the terrain beyond the rut looks like.

Well here it is: how could anyone in their right mind trust an industry, whose best interests are served by attracting customers with a “good” risk profile, rewarding their profitability and loyalty BUT insists on spending outrageous amounts on scattergun marketing and incentivising disloyalty, then tries to claw back costs by compromising the integrity of cover and service.

In a recent survey of 400 nationally represented insurance buyers, a clear message has been given that despite all the advertising and hype, there remains a serious lack of trust in insurance providers.

Just under 73% believe that insurance providers make the terms and conditions in their policies deliberately complicated.

Half believe claims are never paid out fairly.

A third believe that insurance providers expect them to lie about a claim.

Looking at the survey it cannot be disputed that price is a real determinant of converting an insurance sale, with 72% of the respondents attesting to this fact.

However we need to look a bit more deeply. We questioned further about what factors are the most important when taking out or renewing a policy, their replies were clear and unambiguous. 89% stated that they look to their provider to be trustworthy and 79% said that it is important for insurance advisors to have professional qualifications related to insurance.

Filed under Insurance Industry, Marketing Tagged with insurance advisors, Insurance Broking, insurance buyers, Personal Lines, transparency, trust

Broker Profitability: Tony Cornell’s take on the industry :: Insurance Age

Friday, 13 January, 2012 Leave a comment

So, Tony Cornell’s macro perspective mirrors my own conclusions and contradicts the sentiments expressed in the recent PwC survey…no surprise there then! I have already declared my own opinion that a “mood of optimism” was, at best, dangerously naive.

The coming year will be a difficult one for growth. Inflation is likely to return to low levels, economic growth will be non-existent and competition will remain fierce. Margins will be under attack and cutting expenses to match a potential fall in income will be a survival strategy for most. This means, yet again, lower standards of service from insurers, hardening claims attitudes, re-organisations and staff reductions. Consolidators will need to concentrate on integration and achieving economies of scale other than through commission leverage. It will be a difficult year…

via A year to remember Insurance Age.

Tony knows the UK insurance industry better than most and has been sharing his thoughts for more years than he would (probably) admit. What Tony does not know is that unmanaged and excessive complexity is at the root of many of these issues. YET, AN INDUSTRY THAT PROFESSES TO KNOW ABOUT RISK EXPOSURE, IS “CONTENT” TO CARRY ON AS THEY HAVE DONE, DESPITE; A RADICALLY CHANGED ECONOMIC ENVIRONMENT AND; WITHOUT REALLY CONSIDERING THE EXTENT OF THE CONTRIBUTION TO THEIR OWN PLIGHT; ATTEMPTING TO TACKLE TODAY’S PROBLEMS WITH YESTERDAY’S TOOLS, OR; RECOGNISING THAT TREATING UNCERTAINTY AS IF IT WERE RISK, IN THE “DIGITAL AGE”, IS AN UNFORGIVEABLE ERROR.

Filed under Business Change, Insurance Industry, Organizations Tagged with Business, Complexity, Digital Age, insurance, Insurance Age, Insurance Broking, inter-connectedness, Probability Distribution, PwC, Tony Cornell

Brokers’ profitability predicted to fall :: Insurance Age

Wednesday, 11 January, 2012 Leave a comment

Despite the negative aspects of this report, there appears to be an air of optimism…but, in the light of some more in depth research, I wonder: “what is the basis for such optimism?

From my own experience, most of the brokers I know are so busy looking after their clients that “they can’t see the wood for the trees”! When you are stuck in such a deep, well worn, rut it is notoriously difficult to form an accurate picture of what is happening around you, let alone develop a robust strategy for the future.

My own analysis has concluded that, by pursuing (even well conceived) development strategies in the current climate, brokers can significantly damage their own profitability!

This an article from July 2011: What do you do when you are in a hole? and the following an extract from an earlier article:

"Insurers and much of the broker channel have become dependent upon the revenue from selling protection when they should be promoting loss prevention and rewarding profitability”

I have a genuine fear that too many good professionals lack a realistic vision of the future. The longer they remain stuck in their rut the less likely they are to retain the will, appetite and ability to adapt and survive in a changed insurance landscape.

Brokers saw a strong decline in business at the end of 2011 and face further reductions in profitability at the start of 2012 according to a new report.

The Financial Services Survey from Price Waterhouse Coopers (PwC) and the Confederation of British Industry stated that the volume of business for UK general insurance brokers fell strongly in the three months ending December 2011, and that this drop in volume led to a reduction in brokers’ profitability.

It noted that although total operating costs fell in the quarter, brokers had seen a surge in average costs per transaction.

The authors added that profitability, volumes and premium income were expected to fall again for brokers in the next quarter, although at a slower rate.

The results for brokers were at odds with the overall figures for the UK financial services sector which saw business volumes grew for the seventh quarter in a row…

via Brokers’ profitability predicted to fall Insurance Age.