Brokers build their reputation on going further than a direct insurer can – using their in-depth knowledge about product areas to find cover that is tailored specifically for an individual client’s needs. However, in one area they may be missing the mark.
That is the verdict of Robin Reames, business development director at AutoRescue Logistics and Recoverme, and former claims director at Swiftcover, who believes that brokers are not paying enough attention to breakdown cover for their clients.
“Brokers say they offer expert advice – that they give their customers options and find the right product and take care of their customers,” he said. “I don’t think they do in the breakdown market. I think often they go for slick marketing and the manipulated data of the big clubs and don’t actually think through what the implications could be for their clients.
“Many of the big clubs – AA, RAC, Greenflag – they don’t really do commercial work, for example. They are happy to work in a pretty saturated market of personal lines and vehicles, and maybe vans. There is a very big gap in the market that brokers are not filling.”
In particular, Reames believes that brokers are failing to consider some of the implications associated with having a fleet of larger vehicles and are instead assuming that one size fits all when it comes to breakdown cover.
“Brokers don’t understand some of the implications of what happens if you do break down or have an accident – particularly with larger vehicles,” he continued. “So let’s say you have a large vehicle that breaks down and you can’t get it off the road – police can come along and enforce statutory removal of that HGV and that can cost up to £6,000. If you have a tie-in with a good provider, it can do the recovery for just a few hundred pounds.
“Many will think they have a large warranty on a vehicle so they don’t need breakdown. Actually your warranty won’t cover the recovery of a vehicle so you’re likely to still pay a large amount of money even if you’re under warranty with a vehicle to get it recovered. Therefore breakdown cover will fill that gap.
“So brokers should think about what else they could offer for fleets. Many providers will only offer a breakdown product – we will also offer pay-as-you-go for fleets so anyone who doesn’t want to take out breakdown cover for a fleet could use it on a pay-as-you-go basis. So there is more flexibility with that.”
Reames believes that many brokers have overlooked breakdown cover because it doesn’t seem like a lucrative product area for them. However, with the right approach he believes that this can change – that it can enhance their income stream and, above all, enhance their reputation with customers which will bring them more business in the future.
“It’s a segment that is not at the top of broker’s lists in that it hasn’t been a big earner for them,” he said. “However, I think there are three things that would be attractive for brokers – an enhanced service offering to customers; an increased income stream for them; and it’s easy to implement. At a time when lots of brokers have been reviewing their add-ons it deserves further scrutiny because there are wider implications beyond just giving somebody breakdown cover.
“A lot of the time brokers will go for the easy option and pull it off the shelf and serve it to the customer. But is it tailored? Does it meet their needs? A lot of the big players don’t offer the cover that the motorists really want. In many cases, the broker is not really getting the product and the service that the customer wants or deserves.
“Brokers have to be on the front foot and have to understand what other products are out there on the market because otherwise customers will soon find out and ask why they are being sold a product at an inflated price while they can get a better service for a better price elsewhere.
“It’s another way of cementing the relationship with the customer and showing them you can help.”
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