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Rated or slated? Watchdog’s opinion of brokers

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Insurance Business | 05 Jun 2012, 12:05 AM Agree 0
EXCLUSIVE: We speak with Australia’s leading consumer watchdog to discover how it rates insurance brokers and what it tells its trusted consumer base to expect from your service.
  • Damian Scantlebury | 05 Jun 2012, 11:18 AM Agree 0
    Choice magazine has a trusted reputation from an unbiased point of view.???? Not from my reading of their comments on several products they have surveyed. I treat Choice as I would a Current Affair program on the TV. A lot of basic info with very little of the underlying truth attached. They appear to be somewhat sensationalist, whilst appearing to be unbiased. Whether this is intentional or not, it still reeks of biased reporting. I therefore take no cedence in anything that Choice stand on their soapbox and sprout.

    The facts are that around 80% of claims that go to the Insurance Complaints Ombudsman are from clients who have gone to Direct Insurers and 20% of complaints are from brokers. Of the 20% from brokers, 60% of that 20% are settled before the Ombudsman passes a judgement. This tells me that people who deal with direct insurers do so at their own peril. We ourselves have had dealings with a claim that looked like going pear shaped until they found out that we were actually the brokers for that client. That claim was sorted immediately. This shows me that direct insurers have a different attitude to claims resolutions then they have if a broker is involved. I may be reading too much into that incident, but it sure woke me up to how they can treat the public for direct claims and think they can get away with it.
  • Kay Jackson | 05 Jun 2012, 11:43 AM Agree 0
    Shows how little Choice knows about our industry - Shame on Choice - perhaps they should do some research!
  • James Markwick | 05 Jun 2012, 02:33 PM Agree 0
    Wow, I cannot see why Choice's comments are so controversial! It is not as if Ingrid Just has slated the insurance industry or have I missed something? As she rightly says, consumers explore all avenues of finding their insurance whether that be going to a broker or direct to the insurer. I know from experience that some brokers only use a few insurance companies and therefore do not offer a full choice.
  • Damian Scantlebury | 06 Jun 2012, 10:53 AM Agree 0
    Response to James Markwick's comments. I agree with him in that brokers know the products and generally can fit one of these products to suit the clients needs. We don't need to quote the whole industry every time we transact business for clients. Price does come into the equation if there are more than one appropiate option for the client. People who go to direct insurers fell rightly or wrongly they are capable of making their own decisions after checking out their insurer options. Unfortunately, I get the feeling the direct clients shop on price rather than quality and this is the difference. You dont get a Rolls Royce for a Mini price. But as is evident with a lot of people we have questioned on the reasons why they changed to a direct insurer is they have been told by the direct insurer the policies are the same and in some respects this is correct. The sums insured are the same but the policy wordings can be significantly different and the client does not get told this by the direct insurer and why would they, but the client thinks they are getting the same product. Brokers more often than not offer products they know work for that client. They don't need to check every insurer every time they recommend a product. So, James you are right in your comments, but this does not prejudice the clients quality of cover. Brokers emphasis is to offer quality rather than price, but price does come into it as mentioned before. This is with the brokers I know anyway and I know there are always exceptions to the rule as it the case with "unbiased" reporting re Choice.
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