Insurance brokers are working in their customers’ interests – that is the verdict of a new report from the British Insurance Brokers’ Association (BIBA).
Teaming up with the Association of British Insurers (ABI), the report suggests that brokers and insurers are working together to benefit long-standing customers with the two organisations outlining a set of Guiding Principles and Action Points (GPAPs) meant to address the differences between new customer premiums and renewal premiums.
According to the survey, members are highly engaged with the points and principles. It reports that there is an 89% level of awareness with most brokers welcoming them; and that brokers believe insurers have made “great strides” in bringing new business and renewals in line.
“Our members have embraced GPAPs and this is benefiting home and motor customers,” said Steve White, CEO of BIBA. “In light of the success of this voluntary action by both brokers and insurers it is clear that the Financial Conduct Authority needs to note the positive impact of GPAPs.
“Brokers offer a holistic approach to their clients’ insurances considering the breadth of cover under a policy and the claims-paying history of the insurer before considering whether switching to obtain a financial saving is in the customer’s best interests. This care negates the need for auto switching which might instead cause customer harm.”
Other findings from the report included that insurers are amenable to approaches by brokers looking to negotiate changes on renewal premiums and the vast majority of brokers “re-broke” every year regardless of whether there has been a price increase or not.
“All customers are different and sometimes the safety net offered by an auto renewal process ensures continuance of motor insurance, required by law or home buildings insurance often necessary under a mortgage and the practice should be allowed to continue albeit on an opt-in basis,” said White.
