Insurance Media - 'Give Insurers a break'

I am going to talk about Aviva but the sentiments I express could apply to any of our major insurers.

I have watched intently as Aviva has been criticised in the press for the manner in which the current senior management have been acting.

As an insurance broker I would like to think that it is a positive thing that one of my major suppliers of insurance has the wit and expertise to recognise that the medium to long term interests of my clients are served by Aviva and other insurers being efficient and profitable. If they are not then ultimately, fairness in settling claims must be affected.

It is not my place to question what decisions expert business managers make when running a firm of the size of Aviva. There are so many interests they have to consider and balance.

What I would say is that in 40 + years in the industry, the scenario is not new and I have the greatest respect for the Robin Spencer's and Mark Wilson's of this world. When a recession of this severity bites, hard decisions have to be made to have even a chance of coming out the other side in reasonable shape and to be supported by Phil Bayles and his colleagues (as far as the broker market is concerned) has to be a good thing.

To get the true picture we need to peel away the outer shell to look at some of the professional standards and activities that have not been affected and in many cases where additional investment has been made for the insurance broking profession and its clients:

Aviva has:

  • not  sold it soul by being unfair with claims
  • maintained and increased its investment in learning facilities for insurance brokers
  • increased its fraud prevention and prosecution programmes
  • increased new and exciting placement facilities for the smaller broker
  • maintained its support for the young professionals
  • radically increased its online offerings for small packaged products
  • improved the ability of brokers to "broke" business in the traditional way

and above all, improved profitability. That is good for all stakeholders.

I have no doubt that other major insurers can claim positives such as this. So why the doom and gloom and vitriol from the press and other commentators about a major section of our industry. 

I said at the beginning that one could apply this to most of the major insurers and I make a simple statement:

It is a time of radical change for several of the major insurers but if a company maintains its integrity and its commitment to its brokers, the insured and to society generally, let us be proud of them rather than criticising them.

It is tough out there and none of the major insurers is getting it all right at the moment but if they can keep their integrity when all those around are losing theirs and blaming it on them...... (thanks Kipling) I do think we should show a little more respect.

When insurers are unfair with claims, stop caring about fraudsters, forget the young, forget those less fortunate in society, ignore the smaller broker and agent :

Then things are worth getting hot under the collar about. If this happens the behaviour becomes less than professional.

In my opinion let us trust that the expert business managers being brought in throughout the insurance industry know what they are doing and let them get on with it.

So why are we involving ourselves in things that really are not our business or is this a trend which is growing in the insurance industry and insurance broking profession?

Why, for example, it is being suggested that we should be deciding insurance broking standards with the Association of British Insurers? Informed opinion is that insurance brokers should be focussing far more on working with their clients' representative bodies than with the representative body of their suppliers.

Insurers are indeed suppliers of insurance capacity and some of them pouring money into institutes, networks and trade associations in the hope of influencing their distribution chains is understandable but not really the right recipe for an indpendent group of practicing insurance brokers to decide standards for independent insurance brokers.

Perhaps practicing Insurance brokers need to step aside from these activities and be a pure profession unadulterated by commercial payments and the offer of awards and high positions from inside or outside the profession.

An insurance broker "buys" insurance on behalf of his clients and in that regard insurers are suppliers and that includes Lloyds, wholesalers and MGA's.

That is why Aviva are so right with their message "We are no 1 for brokers". The message is clear.

As a profession we should be more concerned about what insurers supply for our customers and the quality of that supply and product.

I say well done to most of the insurers in a tough time for maintaining their integrity and supplying the insurance that insurance brokers need to buy for their customers around the world.

To be professional, any insurer has to be able to pay claims fairly and keep the owners of the company happy. It is a balance. It also has to take a part in society and set or maintain social values (such as educating the public, maintaining charitable donations in a difficult trading period, prosecuting fraud, investing in youth).

If that cannot be achieved then the future looks bleak.

I urge every insurance broker to look inside the insurers that they do business with . That is where the heart and soul of the insurance industry lies and after over forty years, I believe that with a few notable  exceptions, the UK insurers will not be found wanting.

I would like to see far more column inches devoted to that subject than the mindless tittle tattle that we are served up on a very regular basis.

All this debate about professional standards seems to be some sort of gimmick sponsored by organisations seeking to sell their products.

Why on earth some of the insurers' employees are all over the trade press promoting their vision of insurance broking standards is beyond me. It really is none of their business.

That is a matter for the members of the insurance broking profession and their customers alone.

Insurance broking has been a profession for generations and there are very few traditional insurance brokers that I know that do not know well how to behave as members of that profession (although there seem to be a few with less experience who seem to think there is some kind of problem they need to solve).

The only job that has to be done is to codify what the body of opinion of ALL practicing insurance brokers is and that really is a job for experienced practicing insurance brokers and not insurers, their representatives or anyone else who is not doing the job on a day to day basis.

And so we come full circle.

Insurance brokers should not meddle in the insurers' business and insurers should not meddle in the insurance broking profession and anyone who cannot manage the conflict of  interests and the differences between the two should not perhaps be representing insurance brokers when it comes to deciding standards.

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Robin Wood's picture
Working initially for insurers and brokers in the London Market, Robin co-founded and built his own broking firm following some years with a national broker in the 1980’s. He served as a Council member of the IBRC from 1985 to 1993 and is now Chairman of RWA Group, one of the leading compliance, training and broker consultancies in the UK. Robin is an expert Witness to the Courts on Insurance Market Practice, most notably involved in the recent Environcom and Reynolds Vs Rossborough cases, and is regularly consulted on high level compliance and PI issues.
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