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Insurance Business | 17 Apr 2013, 12:00 AM Agree 0
As the online broker debate heats up, a broking boss has cast doubt as to whether they can provide the same service as traditional intermediaries.
  • Andrew Bourke | 17 Apr 2013, 11:55 AM Agree 0
    Agreed. I still cannot understand why regulators are not able to shut these BS aggregator sites down.

    If the aim of our industry is consumer protection - and doing the 'right' thing re cover and advice.... These sites should not be allowed to exist.

    I have said before - and I'll say again - I don't see aggregator sites for Accountants, Lawyers and other Professional Services firms..... So what makes insurance advice different?
  • John Elliott | 17 Apr 2013, 12:44 PM Agree 0
    There is a place for Aggregation in the market for the right products. However we just need to make sure it highly regulated to ensure the customer is able to make a better informed decision.

    The UK aggregators currently account for 60-70% of all Home, Motor and Travel insurance renewals and new business and was one of the fastest growing distribution methods in the history of the UK market.

    Those who bury their head in the sand and stick to the guns of the "Traditional Broking Methods" as the only way forward for all our clients are just kidding themselves.

    There will always be clients who can only be serviced by an experienced broker and require the advice and support we offer. However there are a growing amount of consumers heading online for quick answers, you can either ignore this fact and miss out on these consumers, or embrace the facts and figures and develop technology and product offerings to capture a portion of this market for yourself.

  • Former Broker | 17 Apr 2013, 01:32 PM Agree 0
    It amazes me the level of insecurity among brokers.

    To Mr Pasquini, what do you know about iSelect's platform and business model? is there something you know about their matching algorithm that we don't? further, what do you know about about their investments in compliance and L&D for their service centre staff that we're not privy too?

    Before we judge iSelect, let's all consider the alternative. Without iSelect a customer would have to fill out multiple online forms from various health insurers to get different quotes - doesn't seem like an efficient way of doing things to me. Alternatively, you could contact a "paper pushing" broker and experience what service you'll get for a few hundred $$ in business.

    And yes yes...the above logic doesn't apply to commercial lines of insurance as business insurance requires more advice etc...do not disagree with that...but for highly commoditized products such as health insurance, surely online distribution is more effective.

    I would encourage brokers to at least use iSelect to experience the way the platform cleverly asks probing questions to identify your insurance requirements, and to also spend some time with their sales consultants, before casting any judgments regarding the level of "advice" they provide.

    Regarding Mr Savvides comment: "I’d argue they’re adding costs because of the commission"....hmmm absurd statement in my mind, since when does competition translate to price hikes, perhaps Mr Savvides should speak to the ACCC on this matter.







  • Former Broker | 17 Apr 2013, 01:33 PM Agree 0
    It amazes me the level of insecurity among brokers.

    To Mr Pasquini, what do you know about iSelect's platform and business model? is there something you know about their matching algorithm that we don't? further, what do you know about about their investments in compliance and L&D for their service centre staff that we're not privy too?

    Before we judge iSelect, let's all consider the alternative. Without iSelect a customer would have to fill out multiple online forms from various health insurers to get different quotes - doesn't seem like an efficient way of doing things to me. Alternatively, you could contact a "paper pushing" broker and experience what service you'll get for a few hundred $$ in business.

    And yes yes...the above logic doesn't apply to commercial lines of insurance as business insurance requires more advice etc...do not disagree with that...but for highly commoditized products such as health insurance, surely online distribution is more effective.

    I would encourage brokers to at least use iSelect to experience the way the platform cleverly asks probing questions to identify your insurance requirements, and to also spend some time with their sales consultants, before casting any judgments regarding the level of "advice" they provide.

    Regarding Mr Savvides comment: "I’d argue they’re adding costs because of the commission"....hmmm absurd statement in my mind, since when does competition translate to price hikes, perhaps Mr Savvides should speak to the ACCC on this matter.
  • Bob Wonnacott | 17 Apr 2013, 03:17 PM Agree 0
    Personally I think the general apathy of many brokers and AR's and the industry as a whole could spell the death knell for the industry if they don't wake up soon and demand something to be done about telling the general public why they should speak to a broker. There is no doubt that due to clever advertising the person in the street would not know that there is a difference between dealing direct with some company promoting themselves via free to air TV or Fox and an insurance broker, they probably perceive that it will cost them more via a broker and not that there could be less cover dealing direct or better policies to secure their needs. The fact that they can make an informed decision by reading information on line somehow does not equate to the knowledge that even the most junior staff member has absorbed and the vast amount of knowledge that an experienced broker has but of course the person seeking insurance is mostly unaware of that.

    Considering the stress and pressure that is put on all of us to make sure that we comply with ASIC's requirements and the fact that everyone dealing with an insurance product has to be qualified on that product to be able to speak to a client on the subject how on earth has ASIC allowed the direct market to work like they do - the situation is a slap in the face to every hard working and concientious broker (general and life) and will only get worse if we don't get our various organisations e.g. NIBA, Steadfast, AFA, FPA etc etc working to promote the benefits of what we do and fighting the direct market NOW!!!
  • Rolf Van Dulst | 18 Apr 2013, 02:10 PM Agree 0
    I see the services offered by Brokers and Price Comparison sites as two vastly different propositions. One is a professional service that tailors a solution to a clients requirements whilst the other offers a range of standardised solutions which may or may not fit the clients requirements. I think that for clients that are making a grudge purchase of a fairly standard product, comparison sites may very well suit their needs. For clients with more complex needs or those that value professional advice this wouldn't be the case.
    I trust that the market will decide if these sites are successful in the longer term in spite of the efforts of vested interests wanting to maintain the staus quo. Given that our personal insurance market is dominated by a very few, very large players and comparison sites are one means of smaller players growing, might it not be healthy to have a bit of competition to keep the industry on it's toes? The supermarket industry has shown us how disfunctional duopolies can be.
  • Deipnosoph | 18 Apr 2013, 05:42 PM Agree 0
    Hi Former Broker.

    Competing on price can lead to loss-making, which ultimately leads to higher prices. In this case, there are high upfront commissions paid to iSelect, and depending on the claiming profile of the customers that are attracted to aggregators, there is reason to question the profitability of such business. Hence the potential in the future for price hikes.
  • The Southportian | 22 Apr 2013, 01:59 PM Agree 0

    Andrew Bourke has got it absolutely right!!
  • Terry | 22 Apr 2013, 02:54 PM Agree 0
    Some hide. The broker network concerned is widely selling farm insurance via an underwriting agency who wholesales from another underwriting agency and the business is carried by an offshore insurer. Why ? Purley price!
  • Underwriter | 23 Apr 2013, 11:57 AM Agree 0
    Everyone is entitled to their own opinion however it is a little rich to hear a rep of a broker of the size and scale of Austbrokers being critical of an aggregator when a core part of their model is high commission mass volume deals alongside in-house underwriting agencies which by-pass the open market and thus bypass any healthy competition which would ensure their clients get best cover.
  • David Clarke | 24 Apr 2013, 02:11 PM Agree 0
    Mr. Bourke - There will eventually be such aggregation for other services and there is already online 'tender' services that achieve much the same.

    If the consumer were to quote each inusrer themselves they would likely compare price only in any case so I see nothing wrong with aggregation speeding up this process.

    I do however feel that the aggregators have a duty to clearly disclose that coverage may vary and that the suitability of policies compared cannot be guaranteed, hence, advice should be sought - from a broker!

    Having said that it is often a near possibility to get through to those that commoditise insurance and we must question the value of our own time.
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