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Insurance Business | 18 Feb 2013, 12:03 AM Agree 0
Brokers to bid for clients and range of new commercial insurance via first to market online facility
  • Andrew | 18 Feb 2013, 12:10 PM Agree 0
    Great.... another non-insurance industry person thinking they're doing us a favour.

    Firstly, you want the consumer to not see insurance as a 'commodity' - but you are working on the platform of providing the three 'cheapest quotes'.

    Secondly, you want to educate the consumer about risk and insurance solutions - but you create a purely price-driven mechanism for business owners to make their decision from.

    When will ASIC stop these cowboys from ruining the good work that the likes of Steadfast and NIBA are doing in raising the profile of brokers as 'risk advisors' rather than pricing houses?

    I know of no other business sector where an unqualified person can create such a product/environment without significant experience and consultation with industry bodies.... but somehow ASIC seem to let it all slide bye........
  • Boon | 18 Feb 2013, 12:21 PM Agree 0
    Hi Andrew,

    Thanks for your great comments.

    We have been commercial insurance clients/buyers for the past 15 years (commercial property and business) for our own group.

    I am also an ex-ASIC employee and hold RG146 Tier 1 (insurance broking).

    What you see at premiumfox.com.au is version 1 of our website.

    With feedback from passionate insiders like you and our aims of a forum to enhance educating and communicating between clients and brokers - you will notice our future website to be a better version for these purposes.

    Thank you again for your feedback Andrew and it is these views we are looking to note.
  • Paul Murphy | 18 Feb 2013, 12:25 PM Agree 0
    Andrew is spot on. The issue has always been about the client receiving advice from a suitably qualified Adviser. The FSR regime commenced with ASIC demanding " know your client" before giving advice. Fair enough every broker must do this. However at the same time the FSR regime opened the door for insurers to provide products without giving advice, provided a GAW was given to the client. This is the elephant in the room that ASIC and the Federal Government ignores.Brokers play on an unequal field. We are required to hold PI undergo professional training etc and always have good reason for advice given. Insurers and commodity platforms don't have to do any of the above. Clearly given the Ombudsman report Insurers are failing given the numbers of complaints. Brokers continue to have minuscule numbers of complaints from clients. Insurers have been very successful in getting away with commercial murder for years flogging commercial policies with no needs analysis and placing all responsibility on the gullible public. It all quite appalling .
    Paul Murphy Australian Risk Advisers.
  • Kate Fairley | 18 Feb 2013, 01:21 PM Agree 0
    The services an insurance broker provides are supposed to be relationship based, not based on speed or price, so I can see brokers becoming frustrated with this business model quite quickly .

    Many established brokers won't waste their time on price focused consumers who shop between brokers every year, so I'd be interested to see which brokers use the service.

    Kate Fairley - Get Informed
  • Kate Fairley | 18 Feb 2013, 01:24 PM Agree 0
    The services an insurance broker provides are supposed to be relationship based, not based on speed or price, so I can see brokers becoming frustrated with this business model quite quickly .

    Many established brokers won't waste their time on price focused consumers who shop between brokers every year, so I'd be interested to see which brokers use the service.

    Kate Fairley - Get Informed
  • Gary Hayward | 18 Feb 2013, 01:35 PM Agree 0
    It seems to me that if you believe the comment “We found not enough attention was being paid to commercial insurance" then you have yet to deal with a professional General Insurance Broker.

    I have found with my 37 years experience that plenty of attention is being paid to this area, but if you have to want to get some attention and advice and you need to talk to a broker and not to a website or direct insurer.

    Unfortunately, good advice costs money and getting the lowest 3 quotes for any risk will only lead you to a cheap product.

    More commoditising of insurance will not lead to a better outcome for users but the eventual death of genuine advice and the usurping of the industry by the big 5 insurers.
  • Jacob | 18 Feb 2013, 01:42 PM Agree 0
    Interesting comments so far.

    Whilst I do agree with the sentiment that this is against the spirit of what FSRA was trying to acheive by focusing on Advice and not Price; the reality is that the SME or Micro business consumer is quite the opposite. They want lots of quotes and they want it fast, if it meets their expected budget they are happy regardless of price. This is why direct marketing insurers compete well in this space of consumer.

    I think there is a market for this and it is good to see a business focus their attention to the broker space rather than simply pitch it to the direct marketers. I can see it will be aimed at low premium value SME's that are trying to cut costs as clients and for the brokers, they will be pitching to brokers who may not know how to market effectively or how to open doors to grow their business.

    If you were a home based, one person show, a broker that needed to get volume without the cost of client visits but didnt have a support around them to feed leads to them. If they had the info presented to them and they simply run the quotes say via sunrise within the time frame and hope you win a few, well it may just fit that type of broker.

    Needless to say, the platform really should consider how it is going to address the advice issue and encourage consumers to when presented with the 3 lowest, dont take just the cheapest, but actually consider the 3 quotes in detail, to encourage the customer to take the right quote out of those three, not always the cheapest. This may shift the quality of the quotes given to that client.

    I must say though, it sounds like a lot of high pressure, high PI exposure work to get clients that will probably shop you the following year on the same platform.
  • Boon | 18 Feb 2013, 01:53 PM Agree 0
    Kate and Gary,

    Thank you for your comments.

    As commercial insurance clients ourselves, we take a balanced approach.

    We know whilst we want a good priced premium: speed and the quality of advice are just as important to the client.

    That's why we encourage brokers to contact potential clients to discuss before quoting.

    Our aim is to assist brokers acquire new clients for the long term. Some of those clients may have decided to go through to direct insurance or self-insured, if not for our website.

    If you have any further advice, please feel free to email us at team@premiumfox.com.au.

    Thanks again Kate / Gary.
  • Boon | 18 Feb 2013, 02:22 PM Agree 0
    Hi Jacob,

    Your views are well-thought out.

    Yes, you're right: to begin ,we will encourage the brokers we work with to make contact with the potential client.

    That is the beginning of a relationship. And also one of educating and communicating.

    We're looking for quality, rather than quantity, of brokers to work with.

    That will determine our success and that of our broker partners.

    Our aims are and have to be aligned for the long-term.

    A platform that is transparent will appeal to SMEs and to large organisations - eg. not-for-profit sector.

    We are also hoping our platform will assist female brokers as the internet is an equal medium to communicate and educate clients.

    Thank you Jacob.
  • Andrew | 18 Feb 2013, 02:44 PM Agree 0
    Boon,

    Thanks for your response. As you are an ex-ASIC employee - I am disappointed that you believe this to be a valuable and proposition for a broker/client relationship - meant in the best interests of the client. As mentioned by others, this is purely a means of price-shopping - no matter what your intent might be - the most consumers (commercial or retail) will still price-shop insurance as it is a grudge purchase.

    Further, I note your comments re Tier 1 in Insurance Broking. Have you spent time as a broker in a brokerage? Have you won and lost clients? Whilst I respect your position as a long-term commercial insurance purchaser, have you had to explain to an ill-informed client why there is a significant difference between your offering and the next cheap-as-chips smash-and-grab offering?

    Andrew Bourke.
  • Both Sides | 18 Feb 2013, 03:37 PM Agree 0
    Give me a break... if you are serious about the value proposition then remove the cost proposition. The 2 operate in opposing sides.

    Furthermore Commercial Insurance is a complex product. Having been in general insurance claims field for 20+ years, commercial insurance should never be commoditised by a web offering that purports anything otherwise (we're not buying burgers through a drive-thru, it's a commercial transaction involving an insurance contract on a promise).

    Your model appears to under-value the professional advice that a commercial consumer should receive even before contemplating review of an insurance programme.

    You wouldn't see a series of medical specialists spruiking for patients operations based on information provided by them on the web and issuing a price for the same.
  • Stuart | 18 Feb 2013, 05:27 PM Agree 0
    Boon, Given your further comments it appears ‘premiumfox’ acts as an introducer/referral source to brokers, if the broker secures the business a fee is paid to premiumfox for the introductory service – as Jacob stated the website seems more a marketing tool which participating brokers may use in order to attract new customers.

    The article states “Potential clients are offered the three lowest quotes from brokers to choose from…” From this I inferred (as have others as you can see from the responses) that it only allows only a ‘non advisory service’ and is price driven - your further comments suggest this is not the case. You suggest the broker is able to contact the client prior to quoting and provide advice as it normal would, the initial article may put many brokers off. This really should be clarified and confirmed in detail by you as to how the proposed model is to work.
    I do, however, agree with Andrew and others that it’s still a ‘means for price shopping’ despite your (to be) clarified intent that brokers can provide advice.


    Regards
  • Boon | 18 Feb 2013, 08:09 PM Agree 0
    Hi All, Thank you for the comments today.

    The platform does not give advice or deal in financial product. And we're happy with this arrangement.

    However, advice will be given by the broker(s) before quoting for a variety of good reasons. This will be done offline - by phone and/or email.

    Brokers are in charge of the process from contacting the client to quoting and accepting payment to their own account. We just provide a platform to help brokers increase their business.

    Thanks again!
  • Stuart | 18 Feb 2013, 08:35 PM Agree 0
    Sorry mistake on the RG146 Licence, it only refer to products not what you can deal in. disregard my last paragraph.
    cheers
  • Interesting | 19 Feb 2013, 12:53 PM Agree 0
    Amazing... an on-line aggregator putting the squeeze on brokers...

    I think we've been here before but the pain was experienced by insurers:
    - QBE rejecting the SVU; &
    - in 2008 when a certain multi-national broking firm demanded brokerage at well-above market rates.

    As much as I hate, I suppose it was a matter of time.
  • InsuranceSpectator | 19 Feb 2013, 12:53 PM Agree 0
    Boon

    I have been a buyer of Cars for 40 years.
    I have a driver license.

    I think I will change careers and become a Mechanical Engineer specialising in Automotive Engines
  • Liam Bache | 19 Feb 2013, 04:19 PM Agree 0
    There are already many comparison products available on the web that allow people to compare insurance products and most of these are price driven. What we don't need is website that de-values what a broker does and that is source the best suited insurance products for a client.

    I can also imagine how frustrating it will become for insurers when they see the same client being put to them by multiple brokers. It will probably result in the insurers reserving terms to the first broker that puts forward the opportunity and therefore pretty much defeating the purpose of this website!
  • Kate Fairley | 20 Feb 2013, 10:53 AM Agree 0
    From the FAQ section:

    What If I Don’t Receive a Cheaper Quote Than My Current Insurer?

    Easy. Stick with your current insurer. You’re just keeping them honest by using our website.

    It’s free and there’s no obligation whatsoever.

    We hope you will tell your friends and industry contacts about our website.

    More importantly, we hope to see you next year when your renewal is due again. WE'LL SAVE YOU NEXT YEAR.
  • Mark | 20 Feb 2013, 01:11 PM Agree 0
    As per the above comments, I think the only way to interpret this website is as a 'no advice' transactional service only. Sure if the client wants to get advice they can contact me and I will do a review away from the website (at a fee for service) but if they are just price shopping then I have more important clients that can benefit from my value-add.

    As an aside, I wonder how many clients that buy from this website will end up on it the following year?
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