Thrifty consumers begrudge broker fees

Thrifty consumers begrudge broker fees | Insurance Business

Thrifty consumers begrudge broker fees

The public’s negative perception of insurance brokers may be influenced by the fact that consumers resent paying a fee for advice, according to a leading insurance head.

This view was offered up by Zurich CEO Daniel Fogarty at the ANZIIF Claims Convention in Sydney on Friday, who defended brokers when a delegate criticised them for failing to provide the right cover.

When the delegate asked Fogarty why brokers have a poor public image, he said: “Perhaps people don’t always trust brokers because they don’t want to pay a fee for advice.”

The delegate responded, stating that brokers did not always provide their clients with adequate cover.

Fogarty admitted there had been some “PI [professional indemnity] issues” during the Brisbane floods, but added that the industry got it right most of the time.”

He said the wider issue was the reputation of the entire insurance industry.

“It’s the reputation of the industry – not just insurance brokers but they are at the sales end. People don’t trust our industry until they have a claim.”

The insurance industry can use the claims process to enhance the reputation and address the skills shortage, Fogarty explained.

“It’s all about being prepared and knowing that our suppliers will turn up and manage the claims process. We have to make sure we have the right people at the right place at the right time.

“When people take out a policy, they think about the price but when they are but with reality [a claim], it can be a potentially life-impacting event.”