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Insurance Business | 20 Feb 2013, 12:05 AM Agree 0
Focus on price alone misleading consumers to believe they are adequately insured
  • Shane | 20 Feb 2013, 12:24 PM Agree 0
    Brokers have to realise that online should be their friend rather than the enemy.

    Our website generates dozens of quality leads for our business every day. From the customer's point of view we are a very convenient way for them to access business insurance, but at our heart we are still driven by qualified broker staff that analyse each request and communicate with the clients.

    Being an online business we do have to compete on price, but we never let price be the driver of the recommended policy.

    So we may not technically be an 'online insurance' company in terms of offering instant quotes and cover, but that's more or less how our clients see us, initially at least.

    If you want to be a broker who continues to fight against online opportunities, you’re only hurting yourself because this trend isn’t going to turnaround any time soon.
  • Arnold Getz/City Acceptance Corp | 20 Feb 2013, 01:14 PM Agree 0
    Present and future problems will occur with online insurance particularly Life and Income protection insurance because without full completion of application forms and medical information, underwriting is ONLY done when consumer notifies that there is a claim.

    It is in the consumers best interest to have underwriting done at time of application.

    Bad underwriting practices leads to ANTI SELECTION against the underwriter and consumer is totally unaware that if he/she does have a medical condition, pre-existing conditions are excluded.

    Some advertisements say "free service" - there is NO free service, the TV advertiser gets up to 120% commission - consumer does not know this. It may imply false advertising!

    When a quote is required in writing, a lot of the TV advertisers advise that "they cannot do this". Whereas a Licensed Insurance Broker has to submit all paperwork and disclose commission as required by the Regulators.

    Furthermore, this only leads to increased premiums to pay for excessive claims.

  • Ken K | 20 Feb 2013, 02:36 PM Agree 0
    I recently had to go into bat for a Commercial client who had purchased on line cover for their Home & Contents.
    The Insurer had insisted the client must accept a reconditioned item as replacement for their damaged iphone when their policy clearly indicated that replacement value was the basis of settlement.
    As the client was a business Insurance client of mine I felt obliged to help out. The client was very grateful for my assistance and expertise in getting the correct claim settlement and was so impressed that they are now shopping around for on line motor cover and want my advice on which is the best!
    Can you believe this?!!

  • Matt | 20 Feb 2013, 04:22 PM Agree 0
    In my view some Insurance products should be and deserve to be commoditised and sold online and if it happens to be a savvy Broker that pulls it off, best of luck to them! Insurance products that can be easily commoditised generally exist in an area which requires little expertise and therefore Broker's add little value in anycase.
  • Robert Cooper | 20 Feb 2013, 06:33 PM Agree 0
    I do not have a problem with web sites generating leads, and then you can assist the client personally with their needs and accordingly act in their best interests with the right advice and recommendations. I also am not too bothered with Private vehicles and Householders being bought on line with comparison web sites. What concerns me is that some of these direct insurers such as NRMA and AAMI are now selling business or commercial insurance to SMEs on line or through call centres. They give no advice, no comparisons, do not discuss any limits or exclusions and certainly do not act in the client's best interests.
    If we really think about the intention of consumer laws, which is to protect the average consumer against being ripped off, then the direct on-line and call centres create a scenario where to save costs, they are going to hide behind the declared "no advice" or "general advice" statement. Then the consumer are more likely to find they feel ripped off in the event of an un-insured risk or a small sub-limit etc. It damages all our reputations.
    The 2011 Queensland floods are a classic example of this. No call centre is going to talk down their cover and say what it does not offer. You have to work it out in the PDS yourself. How many people did not? If they used a Broker, we would have had a duty of care to discuss all their risks. Online comparison sites and call centres have no such duty. This is where it is wrong.
  • Andrew Bourke | 21 Feb 2013, 12:47 PM Agree 0
    RE: Robert Cooper

    Robert, you're absolutely on the money there..... If you look at the FOS figures and the percentage of complaints/disputes arising from broker-placed business, it's almost laughable that the regulators make brokers adhere to compliance regimes and not direct offerings. Again, I thought we were all here for the good of the client!
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