What can be done to shift the all-too-commonly expressed consumer perspective that insurance is a grudge purchase, with pricing its most crucial delineator? Aston Lark’s Peter Blanc joined IBTV to take on the challenge of answering the question which has only become more important as the cost-of-living crisis continues to put increased financial pressure on consumers across the UK.
Establishing the difference between the price and the value of insurance services among customers is very much within the remit of the insurance broker. And from Blanc’s perspective, there are several elements of the broker proposition that these professionals should be emphasising when they speak to clients. The first of these, he said, is risk management.
“A big part of arranging an insurance policy is not just the transaction of physically working out a price and paying a premium,” he said. “It's the pre-work that goes into establishing what covers those customers even need. One of the big dangers at the moment is that customers will go online - and I'm thinking here specifically about small businesses. Because for small businesses, in the rest of their lives, they think they can buy everything online… they might go online and think ‘I’ll just buy my insurance’.”
The risk, of course, Blanc said, is that “you don’t know what you don’t know”. When small business owners are asked to give an explanation of what employers’ liability insurance, or public liability insurance, or professional indemnity insurance, or directors’ and officers’ coverage actually entails, very few can give a cogent reply. This speaks to the fact that they don’t genuinely understand the subject matter and so, do require expert advice.
“A broker will visit a small business customer, work out exactly what they need, talk to the customer about risks - not just the insurable ones, but all of the other risks their business faces - and give them advice on how to solve those risks,” he said. “Once they've given that advice, the final part of the jigsaw might be to arrange an insurance policy but that's the following part of the jigsaw.”
The really important element of what brokers do is around helping a customer understand what it is they need in the first place, Blanc said. And the other big part of a broker's value proposition really comes into its own in the event of a claim. If an SME buys their insurance directly, they are essentially at the mercy of the insurance company and if they’re not treated well, they then have to go down a complaints procedure route or even tap into the support of the Financial Ombudsman Service.
“Whereas if you buy through a broker,” he said, “a broker is there to help you through the claims process, to lean on the insurer if necessary, to help negotiate the claim and to get things paid as they should be paid.”
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