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Spectator Money

Trust is shattered and premiums are rising. Insurance Brokers must seize the moment

18 October 2017

3:11 PM

18 October 2017

3:11 PM

It’s no secret that insurance premiums are rising. It’s also no secret that some insurance firms drive customers around the bend by trying to avoid paying claims. Too many won’t offer their best renewal price to existing customers, unless they’re prepared to call up and haggle. Oh, and then there are those sneaky admin fees to contend with as well.

Add it all together, and it’s really no surprise that insurers are less trusted than estate agents, a profession that’s in no danger of being mistaken for a bastion of trustworthiness.

But while the industry as a whole has a long road ahead if it’s to tackle the trust deficit, I believe that now is the time for insurance brokers to seize a once-in-a-generation opportunity. The vision is simple, but also shockingly ground breaking: prove to consumers that you can be trusted.

There’s no doubt that insurance brokers are best placed to deliver this. After all, they have some of the best independent data about how different insurance providers perform during moment of truth events such as claims.

While UK consumers are now the largest users of comparison sites, especially for car insurance, large personal line insurance brokers like Complete Cover Group and Bedford Insurance are flourishing. In fact, new brokers are still popping up. Sure Thing! was launched in 2014 by ex-Kwik Fit Financial Services CEO Brendan Devine, and took home two awards in the recent Insurance Choice Awards.


If brokers are able to fuse their knowledge and expertise with a few drops of technology and data, they could deliver the kind of honest transparency that would strengthen the industry and propel us into a golden era of insurance. Imagine going to an insurance broker not to buy a policy, but to explore their industry data. By virtue of this trusted position, the winner in the transparency battle could well end up with an enviable share of the market.

That said, the dullness of the industry as a whole means that some great examples of customer-friendly innovation can easily go overlooked. But a number of insurance firms are working hard to champion a customer-centric approach.

Manchester’s Ripe Thinking (formally JRW Group) is growing fast by launching a range of specialist insurance policies, including golf and drone insurance, as well as the newly launched ‘Ripe for Valuables’ which focuses on watches and jewellery. Policy Expert, a home insurance provider, promises to fix premiums for 2 years, helping its customers to avoid that nasty renewal price shock.

Lifetime Pet Cover was launched following the founders’ experience ‘when a much-loved family pet became ill and the pet insurance fell short of our expectations,’ while Pedalcover has created a unique combined home and bike insurance policy to simplify the lives of cyclists and triathletes.

Other firms like By Miles are taking insurance back to the drawing board. They plan to charge consumers for car insurance ‘by the mile’. Beyond the potential cost savings for drivers that don’t use their cars all that much, there’s an inherent level of transparency that should prove to be the real draw.

11 months ago, my first article for The Spectator argued that being labelled ‘boring’ has helped the insurance industry evade the kind of scrutiny it deserves, a view labelled as ‘interesting (and controversial)’ by AXA’s UK CEO.

And while it’s no longer fair to call the insurance industry boring, trust does remain a critical issue. After all, insurance is a bit like selling a promise, and without the trust that your insurer will cough-up if something goes wrong, it becomes the ultimate grudge purchase.

Those brokers prepared to engage in some bold and brave thinking stand to win the hearts, minds and most importantly, wallets of UK consumers.

Mike Fotis is the founder of Smart Money People and a former financial services management consultant.


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