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Insurance Business | 31 Oct 2016, 10:00 AM Agree 0
A major global ranking has listed almost twice as many insurtech companies as last year and brokers have been warned they cannot afford to bury their heads in the sand when it comes to tech
  • Gareth Jones gareth@b2bi.com.au | 31 Oct 2016, 08:02 PM Agree 0
    Insurtech is manifesting itself as an "emerging risk" for the Insurance industry and its (Insurtechs) failings are ensuring the longevity of the traditional Broker/Client relationship.
    As a Broker with 40 years experience in this industry I have never seen a more positive outlook for the traditional insurance broker role.
    The "push" by Insurers and some broking houses to encourage their clients to complete their business insurance on-line is resulting in large numbers of customers with policies that do not properly embrace all of their business activities.
    Almost on a weekly basis I am talking to new customers who have completed their business insurance directly on-line only to discover, either at the time of a request for a certificate of insurance or a claim, that the policy they arranged does not cover them for their occupation.
    The problem stems from the fact that no one business is identical and on-line questionnaires are incapable of scooping sufficient information to properly understand the risks that are being proposed.
    Here are two examples of the pitfalls of online business insurance purchases:
    Example 1)
    Client buys various components of a dolls house from local suppliers. Each component part is packaged by the client who then sells the package, on-line, as a kit for assembly by the purchaser.
    The client completes insurance on-line describing their business as "Toy Retailers". They are in fact manufacturers with a significant product liability exposure.
    Example 2)
    Client makes canvas awnings,umbrellas and covers for utility (motor vehicle) trays. He describes his business as a canvass goods manufacturer and the insurers on-line occupations list provides a perfect match.
    The problem is that the client also installs the awnings and fits the covers to the motor vehicles.
    The statement “They’ve [brokers] really got to explore the art of the possible and engage with some of these technology companies which can enhance their service offering and enable them to reinvent themselves and be relevant" is a recipe for Professional Indemnity claims because without personal verbal interaction, complete and thorough disclosure is just not possible.
    Insurers direct marketing business insurance lines are failing in their duty of care to their customers and ultimately the biggest loser will be their customers.
    Gareth Jones.
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