Customer… Customer… Customer Join Us for BIBA 2014 We’Ve Come a Long Way

Issue 2 May 2014 The The British Insurance Brokers’ Association www.biba.org.uk Broker

BIBA’s Broking matters: industry- wide claims Stuart Reid and initiative Focused on fairer Peter Blanc outcomes A scorecard Leading our new Larger for the FCA Brokers’ Advisory Board Rating the new regulator Customer… Customer… Customer Join us for BIBA 2014 We’ve come a long way.

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Gresham A4 Ad The Broker May 2014 V2.indd 1 14/04/2014 10:28 Contents

Welcome

Conference is fast approaching and I’m looking forward to catching up with members in Do not miss Manchester. If you’re looking to be informed, the most entertained and of course to network like nowhere else, then Customer… important Customer… Customer has it all. From event of the big name insurance sector debates to presentations from top names the broking like Karren Brady and former Prime calendar Minister John Major, this has to be one of our strongest programmes ever. We have plenty to talk to members Regulars about in terms of future strategy DON’T MISS 05 CEO update including the significant progress 14 Stuart Reid and Peter Blanc Steve White on the issues that matter made in our new advisory boards – you speak out 06 News can read an interview with Bluefin’s Why they are heading up the new Larger Brokers’ The latest from BIBA and from around Stuart Reid and Arthur J Gallagher’s Advisory Board the regions Peter Blanc about their new roles on page 14. 10 Regulation news We will also reveal the full details of Claims Working Group Why our sector needs a more proportionate approach our new governance structure at the 41 How BIBA is working with members and outside conference. Let me remind you that experts to improve the claims experience and 12 Technical news members can attend free of charge awareness of how the process works Understanding the Mesothelioma and can bring any number of brokers Act 2014 Financial Conduct Authority – from their firm. It is a great opportunity 44 37 Representation for all members including younger one year on Our lobbying and media work has brokers to experience the networking We review the regulator’s performance. Do you agree focused on flooding as we campaign opportunities and learn about the big with our scorecard? for a more resilient approach and issues impacting the sector. I look to ensure cover remains readily accessible forward to meeting you and your COnference special colleagues at BIBA2014! 19 47 Schemes focus 21 The Programme Events, engineering inspection Leighann Forsyth All the detail on Customer…Customer… and claims advocacy are under the Editor Customer spotlight

Compliance Helpline: 23 Broker vox pops 50 Apprenticeships 0844 8011 888 Why do members return time and again to Why ‘growing your own’ can be a this event? rewarding opportunity for brokers Member Helpline: 0844 77 00 266 24 Consumer trends How brokers can maximise what they offer when buying patterns in the digital age @BIBAbroker are changing 26 Exhibition floor plan BIBAbroker Navigate your way around Manchester Central

29 Industry Q&A Group BIBA Insurer chief execs on the industry hot topics

While every care has been taken in the compilation of this magazine, errors or omissions are not the responsibility of the publishers or editorial staff. © All rights reserved. Products and services advertised within The Broker do not carry endorsement or recommendation by BIBA. The BIBA logo is added free by request to members’ advertisements. It warrants or signifies nothing more than the advertiser is a member. The views expressed in the articles within The Broker are those of the authors alone. They do not represent the views or opinions of BIBA.

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03 ISSUE 2 / 2013 www.BIBA.org.uk CEO UPDATE Onwards and upwards The publication of this edition of The Broker coincides not only with our 2014 conference but the first anniversary of my appointment as CEO.

The year has flown by but much has been achieved as we have taken forward our Strategic Review. We have added resource in our compliance, technical, public affairs and membership teams.

A new commercial activities function has been created to give more coordination to our income-generating areas and help keep membership subscription rates down.

The conclusion of the segmentation and governance work streams has led to a new modernised governance structure, the evolution to a new board and advisory board structure and the closer involvement of BIBA with more key decision-makers within our member firms.

Following on from the commitments I made on stage at BIBA 2013 regarding our lobbying work, subtle improvements in our focus have led, as our chair Lord Hunt has said publicly, to BIBA now being seen politically as a ‘go to organisation’ at Westminster. And come to us they do!

In just one week alone in March, HM Treasury, the Cabinet Office, Number 10 and Defra separately approached us for background on issues in our 2014 Manifesto. This is why the BIBA Manifesto is such an important document and, once again, a big thank you to all those members who gave us their invaluable input.

Steve White, BIBA Chief Executive The BIG issues BIBA Manifesto Regulation 1 Since its launch in January, the BIBA team has been meeting 3 During the early weeks of 2014 we have seen papers from the a number of politicians and their advisers, including for both FCA on the new consumer credit regime, add-on products plus 10 Downing Street and the Labour Party leader. We have also their plans for supervising the four different categories of firms. recently changed our public affairs agency and that has given Our ever-popular regional compliance forums have seen us our efforts an extra zip. take the FCA Client Money policy writers out to meet members as a part their work on assessing the costs of their proposals. FLOOD 2 While winter may have turned to spring, the after effects of BIBA Conference 2014 the weather events of late 2013 and early 2014 linger on. The 4 While the conference is covered extensively elsewhere in this insurance industry gets little credit for the great work it does but edition, let me remind you that entry to the conference and in handling these weather claims the industry collectively has exhibition is free for all members of staff of all BIBA member been doing a very good job. firms so I would encourage everyone to come along. There will be something on the conference programme or in the exhibition As attention turns from the claims themselves to the future of hall to capture and maintain the interest of brokers young and flood cover, we are treading a careful line between supporting old. I look forward to seeing you in Manchester! the new Flood Re model while seeking solutions for some of the risks that will fall outside the model, eg council tax band H properties and SMEs. The balance between representing our members’ interests (and those of their customers) and protecting the collective insurance industry’s reputation is always at the forefront of our minds.

the broker ISSUE 2 / 2014 05 news New advisory boards’ leaders announced

BIBA has announced leadership roles within a number of International and our advisory boards, which are being launched following recommendations in our Strategic Review to improve Wholesale brokers representation and governance Julie Page, Chief Executive Officer, UK Commercial and Consumer Practice Smaller brokers advisory boards. He said: “Following and Managing Director the review, I am keen to continue to be at Marsh (pictured), is to The board will be chaired by Kevin involved with our trade association at a chair the International and Hancock, Managing Director of Yutree time when we are playing an increasingly Wholesale Brokers’ Advisory Board. Jim Insurance (pictured), which important role in advising members Herbert, Chief Executive Officer at Aon has offices in Newmarket, and working on their behalf with the Risk Solutions, will be deputy. Suffolk and London. Kevin regulators, consumer bodies and other will retain a seat on the stakeholders on key insurance issues.” main BIBA board and will Andrew added: “This is an important Regional chairs focus on ensuring the views time for the industry, BIBA and brokers in Grant Scott, Distribution of smaller brokers are heard general. I hope that smaller brokers feel & Marketing Director at and represented. they can engage with this advisory board RA Cowen and Partners Andrew Gibbons, to achieve real results for their firms.” (pictured), is to be Managing Director of BIBA’s Chief Executive, Steve White, Chairman of the Regional Mason Owen Financial commented: “Smaller brokers can rest Chair’s Advisory Board. Services, has been named assured that they will have a strong He is also Chairman of the BIBA East as Deputy Chairman. He voice speaking up for them on the issues Midlands region. Ian Langley, Compliance will join Kevin on the main affecting their business, which will be and Special Projects Director at Hamilton board. heard where it counts.” Fraser Insurance, is to be Deputy The new advisory boards will connect Chairman. Ian is also Chairman of our BIBA at the highest levels with market Central region. trends and developments and the most Networks and MGAs senior stakeholders externally. Tim Ryan, Managing The advisory board will meet quarterly Director of Ryan Insurance Larger brokers to provide advice and ensure smaller firms Group (pictured), has been Meanwhile, Stuart Reid, are properly represented to and by the appointed Chairman of Bluefin’s Executive main BIBA board and executive. the new Networks and Chairman (pictured), is to Kevin Hancock was Chairman of Managing General Agents’ chair BIBA’s Larger Brokers’ the former General Insurance Brokers’ Advisory Board. The deputy Advisory Board. He will Committee, a predecessor to the five new will be announced shortly. also join the main board. The Larger Brokers’ Board represents members with a turnover of greater George Nicol to head Motor Panel than £1 million a year. Peter Blanc, CEO, UK Retail, George Nicol (right), Branch Manager with Arthur J Gallagher, has Gallagher Bassett, has been appointed as been named as Deputy Chairman. Chairman of BIBA’s Motor Panel. The chair of each advisory board also has a seat on the main BIBA board, with BIBA has also thanked the former Chair, Allan the exception of the Smaller Brokers’ Briscoe (left), for his sterling work over the Advisory Board where the chair and the years. Allan joined the panel in July 2002 and deputy chair join the main Board. This has recently stepped down. He works for Aon reflects the fact that 85 per cent of BIBA’s as a technical consultant and will be leaving members are small brokers with 10 there in May 2014. employees and under. *For an interview with Stuart Reid and The new deputy will be announced soon. Peter Blanc see page 14

06 ISSUE 2 / 2014 www.biba.org.uk Brokers receive 2014/15 FSCS levy reduction

IBA is pleased that the 2014/15 Financial BServices Compensation Scheme’s (FSCS) levy for brokers has been reduced to BIBA provides evidence £38 million from the indicative estimate of £62 million, published in January 2014. for motor probe BIBA highlighted its concerns BIBA has provided evidence to the driver may have a delay in accessing to the FSCS about the Competition Commission’s investigation into replacement transport. calculation of the proposed levy motor insurance. for the insurance intermediary Executive Director Graeme Trudgill and Should at-fault insurers be given the first sub-class. members of BIBA’s Motor Panel were asked option to handle non-fault claims? to provide expert opinion to the Commission. BIBA is concerned there are insufficient Chief Executive Steve White The investigation is focused on whether there incentives for the at-fault insurer regarding said: “We are pleased that the are market features that restrict or distort standard of service. No contract is in place levy for members has reduced competition. between the at-fault insurer and the non-fault by nearly 40 per cent compared He said: “As the agent of both the customer driver and the Financial Ombudsman Service to the budgeted figure and by and insurer, BIBA feels there are issues that complaints process has long lead times. There nearly 30 per cent compared can be addressed. We want to ensure could be delay while liability is agreed. to last year’s charge. We were customers have access to suitable insurance concerned that the figure was at a fair and affordable price and that they Controlling costs of providing a too high and that with PPI claim are looked after during a claim, retain their replacement car to non-fault claimants activity slowing down that the mobility and enjoy a swift and smooth BIBA believes a general terms-style-agreement levy should reflect this too.” repair experience.” covering the costs is a sensible way forward. The Competition Commission has put We agree that mitigation questions with Overall the final FSCS levy forward a number of proposed remedies answers set out in a statement could go a long across all types of financial to improve matters and BIBA provided the way towards fairer frictional costs and less services firms for 2014 has been following views: exaggeration. revised from an estimated £313 million to £276 million, with Improving claimants’ understanding of Provision of all add-on pricing from the reduction to the general their legal entitlements insurers to price comparison websites insurance intermediary sub- BIBA supports a basic level of information BIBA says price comparison websites should be class being one of the major provided to customers. This would cover required to enable consumers to compare the changes. areas like what happens when a claimant is policies offered by different insurers, including at fault or not at fault in relation to repairs all add-ons and their pricing information on Steve added: “This is great and replacement cars, excesses and no their websites in a clear and consistent way. news for brokers for this claims bonus, choice of repairers. But, we are summer’s bills, however the concerned about ‘information overload’ and Transparent information concerning FSCS issue is ongoing. We will want to see the right balance. no-claims bonus continue to fight on for further We pointed out that an explanation of NCB FSCS fairness for members. We First party insurance for scales are often provided to customers have our alternative funding replacement cars? anyway. It should be possible to provide a clear model drawn up and ready for Individuals should have the right to recover the statement in every policy. the next opportunity to push for reasonable cost of a like-for-like replacement a review of the current unfair car from the guilty party and not have to pay an Prohibition on ‘wide’ MFN clauses system.” additional premium themselves upfront. We want to see Most Favoured Nation clauses We are also concerned that if there is a and other anti-competitive price fixing clauses disagreement about negligence the innocent banned immediately.

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08 ISSUE 2 / 2014 www.biba.org.uk news

Welcome to new FCA speaks at compliance forum: regional chairs Two of the FCA’s broking regulatory team, Jane Moore and Celia Ho, attended We are delighted a compliance forum held by BIBA in to welcome three Birmingham, where they spoke on changes to client money rules. new regional chairmen David Armstrong, Managing Meeting at No 10: Director of Capital & County BIBA’s Steve White and Graeme Trudgill met Insurance Brokers, based in recently with Jo Johnson MP, Head of the Faversham, is to chair the Number 10 Policy Unit and Parliamentary South East region. Secretary to the Cabinet Office, to discuss our Manifesto and flood-related issues. John Hughes, Commercial Welcoming our Nigerian counterpart: Broking Unit Director with Ayodap Shoderu, President & Chairman of Towergate Risk Solutions in the Governing Board for Nigeria’s Council of Hull, is to chair Yorkshire & Registered Insurance Brokers, paid a visit Northern. to BIBA when in London recently. Nigeria’s insurance market is growing and there are Alan Drury, Director, moves afoot to raise awareness about the Professional Risks with value of insurance along with improving Griffiths & Armour in brokers’ standing. Mr Shoderu is the 17th Manchester, is to chair president and is British trained. There are Merseyside & West Cheshire. hopes that some Nigerian brokers will be able to visit this year’s BIBA conference. Lord Hunt visits SEIB: BIBA Chairman Lord David Hunt travelled diary dates to South Essex Insurance Brokers in South Ockendon, Essex, where he met up with Barry Fehler, the broker’s Deputy Chairman and MANCHESTER main BIBA board member. On taking over the BIBA 2014 conference & exhibition chairmanship, Lord Hunt said he was looking 14 and 15 May forward to meeting regional specialists – and Barry’s highly successful business proved a model example. LONDON Lloyd’s of London Tour 9 May and 27 May Successful schemes renewed SOUTH EAST are undergoing treatment including Golf Day 9 May BIBA has renewed three chemotherapy. ‘Travelling companion’ scheme agreements on cover and increased cancellation limits CENTRAL behalf of members for the over 70s is also available. Five-a-side tournament 27 June Holiday travel with Credit management and bonds with Tokio Marine Europe Perkins Slade WEST MIDLANDS It offers brokers a web-based solution Affordable cover and access to expert Golf Day 6 May and can be sold through members’ own advice on credit and bond risks, improving branded websites. Benefits include single financial security and credit control for COMPLIANCE FORUMS and annual multi-trip cover with £10 clients. Anglia – 23 and 24 April million medical cover. Adults up to the age It provides affordable cover and access London Market – 8 May of 75 can be covered on a multi-trip policy to expert advice on credit and bond risks. and up to age 85 on a single trip. It is also designed to improve financial East Midlands – 29 May security and credit control for clients. Merseyside & West Cheshire – 4 June Travel – pre-existing conditions with Darren Felsenstein, Credit Development West of England – 26 June All Clear Insurance Services Executive at Perkins Slade said: “We Greater Manchester – 9 July Complementing the existing travel have engaged and worked with members South East – 15 July product, it covers those with pre-existing considerably during our tenure in order Yorkshire and Northern – 23 July conditions with no age exclusions. to enhance their customer proposition on Cover can be provided to those credit and bond risks. We will continue to on hospital waiting lists and who build on this work.”

the broker ISSUE 2 / 2014 09 Regulation News From fashion credit which runs to 646 pages? And on the same day as the regulated fees and levies proposals for the 2014/15 year were published, to finance so was the FCA’s Risk Outlook 2014 Time to paper and its Business Plan for 2014/15. As each is an important document, there is a lot to try and absorb in one go. One insurer lighten the load? I look forward to seeing as many of you as possible at the BIBA conference on the 14 and 15 May. The regulation session also has some heavy-weights taking to the stage – and I am not talking about my expanding waistline since joining BIBA.

Appearing live Under the investigative-journalistic glare of Saxon East, Editor of Insurance Times (who is a vastly experienced observer of our market), I will be joined on stage by Simon Green, Head of General Insurance and Protection supervision at the FCA, and Mark McIlquham, Partner at Deloitte. It is Simon’s team that carries From high-end fashion retailers and out the supervisory work on all clothes designers to accountants Brokers are required to insurance brokers, so we appreciate and asset managers, we have a shoulder an exceptionally the ‘top man’ for insurance broking supervision giving us his time to broad underwriting appetite targeting heavy burden to achieve share his view on the market and mid-market risks. compliance under the his own team’s performance. Mark heads Deloitte’s general insurance Our underwriting, risk and claims FCA. BIBA is doing all regulation team, carrying out work specialists are keen to work with we can to ensure there is to help insurance brokers, as well you to provide innovative insurance as having his firm commissioned solutions, designed with your greater proportionality to undertake section 166 reviews customer in mind. says David Sparkes as required by the FCA. Mark has therefore built up a view of the For more information on our market from working both sides of Readers will not be surprised that few ‘development opportunities’. It the fence, which he will be able to mid-corporate propositions please as this article is drafted, the BIBA is fair to say that the sheer weight share with us during the session. visit us on stand E10 at the BIBA office is abuzz with preparations of regulatory scrutiny raises In the space left in this article, Conference 14 - 15 May 2014. for this year’s BIBA conference and questions with brokers around the I want to acknowledge the good exhibition. And why not; you just proportionality of attention to the work the BIBA Regulatory Working have to look at the line-up to see risks our sector of the market poses Party does to support the wider so many ‘heavy-weights’ from the as part of the bigger picture of the membership on developing political and business worlds set to financial services market. an understanding about key be on stage to see what a big event compliance issues, which can

this is going to be again. Quality over quantity then be disseminated to the wider Commercial Property Team of the Year Talking of ‘heavy-weight’, links ‘Heavy-weight’ may also be used membership as well as acting as a Commercial Combined Team of the Year nicely in my mind to a review of to describe the size of policy papers trusted adviser to BIBA’s advisory the Financial Conduct Authority’s coming out of the FCA as well. For an boards. Membership of the group (FCA) first year in existence. organisation that has the wherewithal has been revised as part of BIBA’s Elsewhere in this publication, you to recognise the influence of Strategic Review to ensure equal Insurance from A-Z will be able to read what BIBA behavioural economics on the representation for each of the members, canvassed via the likelihood of someone doing, or not segments of membership. Regulatory Working Party, thought doing something, such as reading of the regulator’s ‘first term in office’. a lengthy technical document; There are some positives for the why then come out with a paper David Sparkes is BIBA’s Compliance and regulator to take away as well as a containing the rules for consumer Training Manager www.allianz.co.uk. Allianz Insurance plc. Registered in England number 84638. Registered office: 57 Ladymead, Guildford, Surrey GU1 1DB, United Kingdom. Allianz Insurance plc is a member of the Association of British Insurers. Allianz Insurance plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register number 121849. 10 ISSUE 2 / 2014 www.biba.org.uk ACOM6115 04.14

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5013.20 'Fashion' Ad A4 (Broker Mag).indd 1 04/04/2014 15:45 TECHNICAL NEWS

A scheme payment will be a single lump sum calculated in accordance with a tariff related to the sufferer’s age at diagnosis date or date of death, if earlier.

Capped compensation Broadly, payments are 20 per cent lower than average mesothelioma civil damages. By capping compensation, it was suggested applicants should not be encouraged to use the scheme before exhausting other compensation routes. It is estimated eligible claimants will receive scheme payments within three to five months and, at 80 per cent of civil compensation, over the 10-year The Mesothelioma period to 2024, payments will average £95,000 each. While scheme payments will be Act 2014 higher than lump sum payments made under existing statutory provision, as is the practice with civil claims, such lump sum payments and any social security benefits will be recouped from – what it means scheme payments. Similarly, if, subsequent to a A new compensation scheme will This is a basic tenet of the payment being made under the compensation scheme provided for in scheme, there is a successful claim help those unable to trace a liable the Mesothelioma Act 2014. against an EL insurer, any scheme employer or insurer. Wendy Taylor The Act applies to Great Britain payment will be recovered from the and Northern Ireland and introduces compensation awarded. of Marsh provides guidance the Diffuse Mesothelioma Payment The scheme is to be funded by a levy Mesothelioma is a terminal cancer Scheme. This makes payments on current EL insurers, estimated at with symptoms typically developing to eligible persons (and eligible £35 million annually. Membership of some 30-40 years after exposure. dependants) who were exposed to the scheme will be compulsory, with Due to the exposure manifestation asbestos by their employer in the UK the first levy collected in April 2014. time lag, many sufferers are unable to and who are unable to bring a claim The cost of paying compensation to trace a liable employer or insurer. The for compensation against a relevant occupational mesothelioma sufferers Health and Safety Executive estimates employer/insurer. who cannot trace an employer/policy there are up to 2,000 victims annually Although the scheme will not be will therefore be met by the current EL and that the number of deaths from operational before mid-2014, persons insurance market. the disease in Great Britain will peak will be eligible for a scheme payment This is a scheme of last resort, which in 2016. if first diagnosed with mesothelioma will require proof the mesothelioma While most mesothelioma sufferers on or after 25 July 2012 as a result of sufferer was negligently exposed succeed in civil actions brought exposure to asbestos at work in the UK. to asbestos in the course of UK against an employer/insurer, claims Anyone diagnosed before this date employment. can take up to two years and sufferers cannot claim under the scheme. There remains criticism the scheme often die before payment. Where civil The scheme will only be open to does not go far enough. Such criticism damages are awarded, state benefits/ persons who have not brought an focuses on three main areas, being the compensation are recoverable. action against a relevant employer or application to mesothelioma only, the EL insurer because they are unable 25 July eligibility cut-off date and the Insurers to compensate to do so, or, who have not received 20 per cent reduction vis-a-vis average The Government estimates more than any payment from another specified damages recovered in a comparable 300 victims a year lose out because scheme. civil claim. of tracing problems. As this inability A person with mesothelioma who to trace an employers’ liability (EL) was exposed to asbestos during Find out more insurer is often due to the insurer the course of employment with an BIBA has a longer version of this failing to maintain historic records, employer outside the UK will not article. It can be found in the technical the Government considers it equitable qualify. section of the BIBA website . that compensation should be met from Nor will a person employed by the EL insurance market rather than an employer in the UK if ordinarily Wendy Taylor is Technical Adviser, taxpayers. employed abroad. Marsh Corporate Placement

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BIBA is changing in response to the Strategic Review consultation, with the creation of five new advisory boards representing the prime broker segments among its membership to support the work of its main board. Vannessa Young reports dreamMeet the team he advisory boards connect Peter Blanc, the heads of two of for BIBA, while for Stuart and Peter BIBA at the highest levels the largest brokers in the country, joining the group was a natural both with market trends working together for the benefit of progression. and developments, but also BIBA’s membership. Observing the Stuart said: “I was delighted to be withT the most senior stakeholders pair having their photos taken for the asked to attend the Larger Brokers’ externally. Each of the five advisory cover of this issue, it is plain to see Advisory Board and indeed be voted boards will be given the opportunity they will work well together – their chairman of it. We are approaching a in The Broker to talk about some of the intelligence mixed with a healthy very changeable environment. What issues facing their particular segment amount of banter and rivalry is is happening in the insurance industry of the membership that they want compelling. is very dynamic and it is particularly to tackle. important that we ensure that our The Larger Brokers’ Advisory Natural progression voices are heard. Board starts that process. Stuart Reid, Both Stuart and Peter have been “We do have a profession that the advisory board’s Chairman and active supporters of BIBA for many ultimately we should be very proud Bluefin Executive Chairman, and years. Not only giving their own of. Perhaps in the past we haven’t Peter Blanc, CEO, UK Retail, Arthur time and experience, but also used our voice as loudly as we could, J Gallagher, the group’s Deputy providing experts within their but that is definitely changing Chairman, spoke recently about their organisations to help BIBA in its and a lot of the credit should go to plans for the group. activities when called upon. Their Steve White and the team at BIBA. A broking dream team some might presence on the Larger Brokers’ They have done a fantastic job at say – the talents of Stuart Reid and Advisory Board was a must-have modernising, making the association

14 ISSUE 2 / 2014 www.biba.org.uk Corporate governance structure

be fair to say that the smaller brokers MEMBERS OF THE LARGER have not seen that level of attention from the regulator. Larger brokers BROKERS’ ADVISORY BOARD are extremely compliant businesses in the main and we need this to be Stephen Bamforth Ian Gosden recognised and taken into account Griffiths & Armour Higos by the FCA in how they supervise us. Peter Blanc Mike Lawton Therefore our voice is necessarily Arthur J Gallagher Towergate different in that regard, if not any other, to that of the smaller broker.” Mark Cliff Paul Moors Peter added: “Larger brokers Ageas UK Bollington have a significant part to play in this debate. The FCA has demonstrated Chris Collings David Newman that they are absolutely willing to Swinton Carole Nash listen to the industry and it is up to Paul Dickson Matthew Pyke us to ensure that the FCA is focused Giles Lloyd & Whyte on the really important topics - ensuring the availability of cover for Simon Douglas Stuart Reid all consumers, ensuring clear and AA Bluefin not misleading documentation from insurers, ensuring that claims are paid Barry Fehler Rhys Thomas and no participants in this market South Essex Insurance Brokers Thomas Carroll behave in a way that damages the rest Peter Foster Tobias van der Meer of the market.” Hugh J Boswell Hastings Significant issue Glen Gillam Derek Walker Raising the professionalism of Green Insurance Clark Thomson the broking sector is also another significant issue that the advisory board wants to support. Stuart more relevant, giving it a very loud welcomed the efforts BIBA is making voice in those key areas where in this area and he urged members brokers need it, particularly with Larger brokers are extremely to participate in the consultation Government and in Europe. on raising standards that will be “I see the Larger Brokers’ Advisory compliant businesses in the main launched at conference in May. Board playing a very important part Many members of the broking in ensuring that progress continues and we need this to be recognised profession are trying to drive the as will the Smaller Brokers’ and other and taken into account by the professionalism agenda and BIBA advisory boards too.” should absolutely be at the heart of Augmenting the knowledge, FCA in how they supervise us this, he believes. His role as head of understanding and strategic the Broker Faculty at the Chartered thinking of the main BIBA board and Insurance Institute (CII) will ensure executive about the specific issues to ensure that the industry deals with that BIBA and the CII are working affecting larger brokers is key for the matters in a way that is appropriate closely in this area. advisory board, according to Peter. for larger brokers.” Stuart argued: “We have He explained: “The advisory board So just what are the issues that the recently seen the opening of a new should help to steer the main BIBA advisory board will be focusing on? representative body to pursue this board so that it is focusing on the It will not come as any surprise to objective. It is my own personal most important and pertinent issues. members if regulation is identified view that with BIBA and the There is an enormous list of possible as the biggest challenge facing firms. CII the industry has more than areas of activity for BIBA and I see the The advisory board’s members have enough representation and that advisory board role as being one of identified the appropriateness of any professionalism developments prioritisation of those jobs. general insurance regulation and should be within the context of these specifically how it is applied to their two bodies. Gateway to main board segment, but also, crucially, the costs “We just need to make sure that the “As well as the prioritisation role, it of regulation, as areas for action. representation we do have does what will give the opportunity for larger Stuart argued: “Where larger it is supposed to do. I am delighted brokers to feed market information brokers sometimes have issue with to represent larger brokers in having and problems into BIBA and the regulation is that in the past they that discussion along with my Deputy advisory board will be able to debate have been very much seen by the Chairman Peter.” these before progressing them, if FSA as the first port of call. Larger He has also identified an increased necessary, to the main BIBA board. brokers have had intense supervisory appetite to deal with the thorny Hopefully the debate itself will help scrutiny from the FSA, while it would market issues that have in the past

the broker ISSUE 2 / 2014 15 Corporate governance structure

been difficult for both BIBA and/ or the CII to tackle. He pointed towards problems arising from some of the less well capitalised insurers passporting into the UK, brokers’ use of unrated insurers, restrictive covenants and desk topping. “These are issues that we will do our level best to deal with as the Larger Brokers’ Advisory Board,” he added. Stuart said: “We’ll find our way, but it won’t happen overnight. Certainly what I was pleasantly surprised about when I attended the first meeting of the advisory board was the diversity of businesses represented on it and the variety of issues that they have. “It is easy to be cynical in our business and there are many cynics around, but ultimately there is a significant amount of people role that brokers play in ensuring that and businesses who want a better businesses and consumers buy the industry. This is evidenced by the ...we do provide an extremely right cover at the right price and don’t desire of people to attend these just buy the products that the insurers boards. Our job now is to ensure that important service for the want to sell. The Larger Brokers’ we represent our sector in a timely country and we must ensure that Advisory Board can help drive that manner about the issues that count.” discussion forward.” regulation is fair and equitable and However, it is early days yet and What a difference an advisory the support is there when needed there is much to do. Stuart said: board makes “My job will be to constantly keep Peter’s clarion call for the advisory connecting with larger brokers in the board is that if members have UK. I want to engage more to ensure got views they get in touch. “The greater engagement from those that our messages are received advisory board will give members a members of BIBA on the key issues of correctly and the work that we do is simple route into BIBA so that where the day. relevant to the industry as a whole. several members of the advisory “Ultimately I want the industry to I also see greater collaboration board all highlight a common issue, be perceived as more professional, between institutes, trade bodies etc the chairman of the advisory board better value for money and more in the future, and Peter and I are well will be able to passionately promote valuable to UK plc than perhaps it is at connected to do this.” that issue at the main BIBA board. the moment.” Stuart concluded: “Industry “If you have issues that you don’t Peter agreed: “Over the coming consolidation means that in five think are being addressed by BIBA months and years, brokers will years’ time there won’t be the 3,500 then for goodness sake don’t suffer in face an ever-increasing tide of brokers we currently have now. So it silence. Pick up the phone and give competition from insurers looking to is important that with this reducing us a call, send us an email. We need write business directly, new entrants number the voices of those that to know. We will raise any queries looking to write new business online, remain are heard and heard in a or concerns with the other members customers looking to compare and timely fashion because we do provide of the advisory board and table the buy cover online, etc. an extremely important service for pertinent issues for discussion at each “My view is that all customers, be the country and we must ensure that advisory board meeting. We’re here they personal or commercial, can regulation is fair and equitable and to represent you.” only be certain of achieving suitable the support is there when needed. and cost-effective protection for “It is important that we focus on Looking to the future their assets and businesses by using what the main issues are and ensure Stuart will hold the office of chairman a broker. By definition, insurers that we get what we want. BIBA will of the advisory board for two years, will only sell products that they can become increasingly important in a period which he acknowledges sell. I find it incredible that some highlighting those issues to the FCA will pass swiftly. Casting his mind insurers are able to advertise claiming and in helping to find solutions, but forward he talked of what he would to offer solutions to all businesses’ it’s important that we have focus, and like to have achieved during his needs when some of those insurers that’s ultimately what I believe the tenure. do not even offer covers that brokers Larger Brokers’ Advisory Board will “I want the advisory board to have consider vital for businesses to have. help deliver.” been established as an influence for “BIBA has to lead this agenda good in the industry. I’d also like to be and ensure that consumers and the able to say that we have encouraged wider public completely value the Vannessa Young is BIBA’s Compliance Secretariat

16 ISSUE 2 / 2014 www.biba.org.uk How do you

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18 ISSUE 2 / 2014 www.BIBA.org.uk Conference 2014: PROGRAMME

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the broker ISSUE 2 / 2014 19 BIBA Advert 2014_Layout 1 10/04/2014 14:00 Page 2

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Message from Steve White, We need to work together to inform customers about what we can do for BIBA Chief Executive them and to rebuild trust in the value of insurance. An economic recovery looks to be underway and it is with a sense of I am fully aware that attending the BIBA optimism that we welcome members to conference is, for some firms, far from our 2014 conference in Manchester. easy since it requires time off from the day job and being out of the office. But However the business environment is there are compelling reasons to join us still challenging. The market remains and I am confident you will find it more intensely competitive with too much than worthwhile. emphasis on price. There is a new regulator keeping a watchful eye on As many members would agree, this insurance and overall the reputation of is the event to find inspiration, new financial services has been tarnished by contacts and more effective ways of banking scandals and PPI mis-selling. doing business. Event PROGRAMME & timetable Wednesday 14 May THURSday 15 May

08.30 Exhibition opens 09.00 Exhibition opens

09.45 Conference opens 09.30–10.30 l The Bigger Picture debate. l Welcome to BIBA 2014 Panelists: The Rt Hon Lord Prescott; l Opening Addresses The Rt Hon David Davis and l Customer…Customer…Customer The Rt Hon Sir Walter Menzies (Ming) Campbell. Just how good are we at customer service? Chaired by Jon Snow.

11.30 Networking break 10.30–11.20 Seminar sessions l Defining and consistently delivering a great 12.00–12.45 Seminar sessions customer experience. l Treating customers individually – l Adapting to meet changing consumer behaviours. what can we learn from Marks & Spencer? l Regulation – the big debate. l Forward to the future – how to appeal to tomorrow’s financial consumer. 11.20–12.00 Networking break l Motor insurance – the technology race. 12.10 l Sir John Major KG CH 12.45–14.15 Lunch in exhibition hall 13.00–14.30 Lunch in exhibition hall 13.15–14.00 Fringe sessions l Legal protection insurance – 13.45–14.30 Fringe sessions the industry’s best kept secret. l FOS – the Ombudsman elephant trap. l Succession – planning to maximise value on exit. l The business benefits of recruiting apprentices – l Understanding the life assurance needs an employer’s experience. of an ageing population. 14.30 Networking in exhibition hall 14.20–15.10 l Karren Brady CBE 16.00 BIBA 2014 closes 15.10 Networking in exhibition hall

15.50–16.15 Fringe sessions l Legally speaking, just who is putting the customer first?

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22 ISSUE 2 / 2014 www.biba.org.uk Conference 2014: VOX POPS

Seal of What you told us... Towergate “BIBA conference is simply the best networking event in approval the insurance world. If you need something to be done, you’ll find the right person to ask and it will be. It worked for me when I ran my own business and it still works for Brokers from across the UK will me now.” be joining us in Manchester. We David Perry, Programme Migration Director spoke to a number of members to see what they most value about the experience

Brokers attend the BIBA conference for many reasons, but the fact so RA Cowen & Partners many return year on year is evidence “The most important part of attending BIBA’s annual that they find it extremely worthwhile. conference is the valuable information you take home with Despite this, we are mindful that you. The ideas and strategies you learn through sessions, taking time out of the office is a big workshops, speakers, exhibitors and equally as important decision. For smaller firms it can be a networking opportunities with everything under one roof. It is resourcing issue and finding cover is a must in your business calendar.” not always easy. Grant Scott, Distribution & Marketing Director While there are always going to be the big names for the keynote Higos Insurance Services presentations, and plenty of “With regard to the conference I believe it is the top broker entertainment, we are highly aware that networking event of the year. It provides an ideal opportunity this is first and foremost a business for brokers to meet with other brokers, insurers and service event. This is why we ensure our providers under one roof and enables you to meet up with seminars in particular are packed with existing contacts as well as build new relationships. guidance to help members introduce As well as the networking, there are the keynote speakers new ideas and boost their profits. and the seminar and fringe sessions which offer interesting There is also the unmissable BIBA and relevant subjects. There is something there for everyone exhibition. There is nowhere like it and the quality of the speakers is always excellent.” to make new contacts, explore new Trudy Brown, Head of Personal Lines business opportunities and check out the latest in new technology. Jelf Group It is expected there will be around “BIBA conferences are always excellent... and I’m very 5,000 attendees and the place will pleased about being back in Manchester for 2014. It is a be buzzing. Many say a broker can great opportunity to accelerate discussions with insurers achieve several weeks’ worth of – where else could you get every decision-maker in the GI networking and business deals in one market under one roof? or two days. “BIBA conferences are also fantastic networking events. BIBA members enjoy free entry to They are an excellent platform to share ideas and benefit the conference sessions and exhibition from thought-provoking keynote speakers. For us, BIBA is a and a complimentary lunch is included ‘key date’ in the insurance calendar and as such we would for those members who register online never miss it.” before 30 April. Phil Barton, Chief Executive (Insurance)

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the broker CONFERENCE SPECIAL / 2014 23 Conference 2014: consumer trends All about the customer The way people choose to shop has an impact on Director, comments: “Most brokers as with any other retailers. So what trends are of the radical change that happening now? Rachel Gordon reports consumers would like to see is not innovative, it’s blindingly obvious. Yes, there were a No matter how successful using it wrongly can still be a few suggestions that related to a broking business, there timewaster. apps and other technological is always scope to learn “We see Twitter, for example, advances that will help to something new. Those joining as being about educating rather drive a creative mind, but us in Manchester will find plenty than selling. For example, non- the principal call to insurers of opportunity to reinvigorate standard cover, flooding issues from consumers is to do the their client offering. or in winter, a broker might one thing that seems almost It is clear that at recent want to tweet about icy roads impossible to achieve. conferences attendees have and keeping safe, and the aim “They want clear, simple found their smart-phones should be to direct customers insurance written in plain invaluable and we have also to the website. In terms of English with no weasel words, seen many more using Twitter. finding hot topics to talk about sold in a simple and fair way, But, are brokers maximising on Twitter, including it on the with the best cover and best social media for business agenda at staff meetings can prices going to the most loyal purposes? be helpful. This can also be customers.” used on a blog and distributed. He explained that one survey According to Mr Hughes: Does social media mean “Making sure they have a respondent summed this up “The fact so many consumers business for brokers? good website which is up to by saying: “It’s not rocket either want to ask questions Craig Freeman, Director of date and has strong content science all we want is a good about their insurance or simply Digital Services at digital should always be the priority for product at a fair price and good want to be treated as an engagement agency brokers, then they can look at customer service based in this individual shows why there is Brandformula, has been social media.” country and our claim dealt so much potential for brokers speaking on this topic at a with swiftly.” both in the purchase and in series of social media seminars Technology – only part of ongoing service.” across the UK run by the the solution Survey specifics Chartered Insurance Institute. At the same time, it is also The Consumer Intelligence Are apps the answer? He commented: “There worth remembering that many home insurance survey showed Research from Deloitte in mid- has been a big increase in customers’ needs are not met a third wanted tweaks to 2013 showed some 72 per brokers wanting to talk about by self-service technology- policies linked to improving cent of the UK now owns a their digital strategies over based solutions and that the cover and removing jargon and smartphone, with apps now the past 18 months, which need for a broker’s guidance is there were further requests for available for a wide range is encouraging, but also we as strong as ever. more meaningful discounts or of purposes. recommend that brokers do Home insurance is a case cash back for no claims and Those who answered not see this in isolation. Having in point. Market research loyalty programmes. Consumer Intelligence a good website should be the company Consumer Intelligence Customer service was the technology questions wanted first priority.” surveyed more than 4,000 second highest area needing to see their provider developing He continued: “Times people to ask what innovative change in the consumer’s mobile apps that would provide are changing and whereas idea they would suggest to mind, while pricing was a a convenient way of getting Facebook may once have home insurance providers to bugbear for 12 per cent of quotes, managing their policies been restricted at work, there improve their service. respondents – the third highest and more. Some 60 per cent is less of this now. That said, Ian Hughes, Managing category. of this group suggested smart

24 ISSUE 2 / 2014 www.biba.org.uk Conference 2014: consumer trends

communicate and shop while on the move. According to Microsoft, mobile internet is expected to take over desktop internet usage this year. PwC recently looked at consumer purchasing trends in its recent report, Achieving Total Retail, which involved surveying 15,000 online shoppers across five continents. More than half or 55 per cent of internet shoppers globally say they now buy Conference 2014 – online because they get better deals than in-store. speakers with a fresh perspective The report says retailers Keeping up to date with what customers want, and need to develop a new, knowing what changes to implement, when trying customer-focused business to cope with a demanding day job can be practically model to deliver on impossible. expectations for the store of This is one of the main reasons to come to the future. Customer... Customer... Customer where you can meet The report also showed and hear experts at first hand and leave with a raft of the important role social practical ideas. media now plays in educating Seminar presenters to watch out for include Jo consumers about both retailers Moran who is Head of Customer Service at Marks and manufacturers. & Spencer – she will speak on treating customers Some 59 per cent of phone apps that would allow individually. William Highan is Managing Director respondents followed their them to obtain home insurance for Next Big Thing, a company that specialises in favourite brands or retailers quotes, estimate the value of customer trends. His presentation will focus on how to via social media. The same household items or accurately appeal to tomorrow’s financial consumer. Meanwhile number also said they had assess insurance risk. Customer Service Consultant Andrew McMillan spent discovered a brand on social One respondent commented: over 20 years with John Lewis Partnership and will media that they subsequently “Using an app where you can speak on defining and consistently delivering a great developed an interest in, walk around your house and customer experience. showing the ever-increasing

take pictures and fill out an importance of two-way social inventory and it will work out media engagement between exactly how much cover retailers and consumers. you need.” In terms of interacting with Some 31 per cent also said they would a company after a particularly they would like apps to assist benefit from an app that good or bad experience, with policy management, from would allow them to monitor students – can access car 55 per cent of the surveyed making and tracking a claim the security of their home. insurance documents, home shoppers said they commented to being able to update cover To date, relatively few insurance details, travel about their experiences with levels mid-term as and when brokers have launched apps insurance cover or student a product or brand on social they buy new items that need but those who are sizeable insurance policies on the go. media. to be individually named on personal lines players or who These are changing times their policy. perhaps provide specialist Mobile computing and brokers clearly need all A further 8 per cent wanted schemes may want to think takes off the ammunition they can get an app that will allow users to about the use of technology. Smartphones and tablets are in deciding their technology compare an insurer against its For example, Endsleigh’s app taking off as sales of personal strategies including their use of competitors in terms of both gives their customers secure, computers fall. Affordability and social media, how they adapt coverage and price, while the real-time access to their policy convenience are the drivers for their businesses and how they remaining two per cent said details. Users – who are largely this – people want to be able to maximise what they offer.

the broker CONFERENCE SPECIAL / 2014 25 Conference 2014: FLOOR PLAN

exhibition floor plan ABACUS D78 ARAG D71 Blue Insurances A21 COBRA D19 Abbey Legal Protection B48 Arch Insurance Europe E60 Bluefin C58 Compass Broker Services E8 ACE E38 Arista Insurance B18 BriefYourMarket.com G75 Coutts F54 Action 365 B12 Aspect Business Intelligence A30 Broker Direct A78 Covea Insurance D80 Acturis F14 Aspray E74 Broker Network G50 Crawford & Company E81

Exhibitor list correct as at 22 April 2014 Advance Insurance B39 Auto Restore & AutoGlass B80 BrokerQuote A36 Cunningham Lindsey (UK) B10 Ageas D20 Aviva C20 Building Block PCC B57 DAS UK Group F50 AIG Europe D40 AXA Assistance G34 Burges Salmon F70 Davies Group B79 AllClear Travel Insurance G25 AXA E40 Business Insurance 247 (PIA) C65 Direct Group E68 Allianz E10 AXA PPP healthcare F60 Call Connection E61 DTW1991 E50 Alternative Risk Management B37 Barbican Insurance F24 Callcredit Information Group D65 Ecclesiastical E30 Amlin D58 Beazley Group D49 Camberford Law A23 Engage Mutual Assurance B49 AmTrust International D70 Bexhill UK B78 Catlin & Angel Underwriting D11 Epoq Legal A52 Ansvar Insurance B60 BIBA E90 CFC Underwriting B43 Equity Insurance Partnerships B88 APC Underwriting D60 BIBA Cleaning Contractors’ Scheme A27 CII F80 ERS C50 Applied Systems A70 BIBA Credit Management & Bonds E79 CILA A50 ES Risks B74 aQmen Underwriting A48 BIBA Schemes & Facilities F88 Close Premium Finance B58 Evolution Insurance Group D75 Aqua Underwriting F8 BLM F20 CNA Insurance Co D59 Evolution Underwriting D68

26 ISSUE 2 / 2014 www.biba.org.uk Conference 2014: FLOOR PLAN

Fenchurch Law E75 Kaplan G71 OAMPS Insurance Brokers C10 SSP F39 Financial Conduct Authority A40 Kingsbridge Professional Solutions B47 Oliver James Associates C68 Stephensons Solicitors B86 FirstAssist Legal Protection F79 Koolsite UK F74 Open GI & PowerPlace D18 Sterling Insurance D79 Flaxman Partners F64 Law Limited E85 Pool Reinsurance Co D74 Stride Insurance Group G19 GAB Robins UK B31 Legal & General C40 Premium Credit E69 Temple Legal Protection F78 Gibraltar Finance, HM Government LexisNexis Risk Solutions UK A32 Principal LEI A42 The Insurance Charities A38 of Gibraltar C79 Liberty Mutual Insurance D51 Prism Network F58 The Nexus Group G20 Gresham Underwriting E89 Lime Underwriting C74 Proximo E78 Tokio Marine Europe Insurance C71 Griffiths & Armour C15 Lloyd’s C70 Purple Partnership F10 Towergate Underwriting F30 Guernsey International Finance Centre A29 Lockton Companies C78 QBE D48 TRACKER Network (UK) C48 Hagerty International G15 Lorega B38 Qdos Broker & Underwriting Services D84 Tradex Insurance Company A58 Harris Balcombe F18 LV= D30 Questgates B59 Transactor Global Solutions D61 HCC International Insurance Company C30 Managing General Agents Association G55 Quotezone.co.uk B51 Travelers Insurance Company D10 Health Shield Friendly Society B28 Manchester Underwriting R&Q G11 TT Club A25 Helphire C18 Management C41 Readings Louden E70 UK General Insurance Group D50 Heritage Insurance Management B40 Markel B20 REG (UK) B64 UKS Medical Diagnostics F75 Hiscox C38 Markerstudy Group C2 Rentguard Insurance B42 ULR Additions B50 Home & Legacy D69 Marmalade C89 RPost UK B75 vrs Vericlaim UK C61 HSB Engineering Insurance F31 McLarens F69 RSA E20 Wildnet Group F68 Insurance Age & Post Magazine C60 MetroMail F61 RWA Group G59 Zurich A18/A20 Insurance Times D88 Momentum Broker Solutions G79 Salesforce.com F71 Zurich/BIBA Delegate Notebook Isle of Man Captives Association A46 NIG D2 SchemeServe B41 Collection Point A10 Jackson Lee Underwriting B70 NMU B30 South Essex Insurance Brokers B68 Zywave - Broker Briefcase UK Edition C85

the broker CONFERENCE SPECIAL / 2014 27 Hello to more products doesn’t mean goodbye to great service. And that’s a promise.

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28 ISSUE 2 / 2014 www.biba.org.uk

BIBA Magazine May 2014 297x210 1 24/03/2014 10:28 Conference 2014: Insurer roundtable

Taking it from the top BIBA spoke to the UK’s leading insurer chief executives to uncover their thoughts on the industry’s biggest talking points Who took part?

Amanda Blanc Andy Watson Dave Smith Jon Dye Chief Executive Officer, Chief Executive, Managing Director at Chief Executive, Allianz AXA Commercial Ageas UK UK Commercial Broker, UK Lines and Personal Zurich Insurance Intermediary

Jon Hancock Nicolas Aubert Phil Sharpe Maurice Tulloch Managing Director of Chief Operating Chief Operating Officer Chief Executive Officer UK Commercial Lines, Officer, EMEA – UK & Ireland, ACE UKGI & Ireland, Aviva RSA AIG European Group

the broker CONFERENCE SPECIAL / 2014 29 Conference 2014: Insurer roundtable

their insurance broker as key in assessing, JD Q: managing, and mitigating their risk on their behalf. Customers’ What do you think is the expectations are biggest issue impacting JD The financial services customers? sector suffers from low levels of increasing all the customer trust and confidence. time and through our AB Who to trust. The public For insurers one of the key has been badly let down by issues is the expectation that there is cover Net Promoter Score financial services during the last when there is only partial protection or research we can see that decade and they naturally treat none at all. The way to overcome this is businesses with a great deal of cynicism. for insurers to seek to make products and the bar is being raised Customers feel they have to protect services as clear as possible. continuously themselves from being ripped off at every turn so is it any wonder we see so many JH The economy has probably fraudulent claims? been the biggest issue for our customers in recent years, with Q: AW We operate in a big individuals and companies fighting market with a huge amount of for business and focusing on containing Do you think customers competition, which means there is costs. At the same time we have seen pretty or their needs have a real risk of information overload poor returns for insurers meaning upwards changed over time? for customers when looking for the right pressure on rates which, combined with insurance cover for their needs. Although increased regulation, does mean it has AB Not really. They want an price is often the key driver in choosing a been pretty tough for everyone! However insurance policy that will pay out provider, communicating really effectively there is now a real sense that economic when they have to make a claim to customers about the level of cover and recovery might take hold after several years and they want it for a reasonable quality of service that is right for them is vital. and businesses are more optimistic about price. That will never change. What has opportunities to grow. changed is how they want that delivered or DS The never-ending challenge communicated to them. of differentiation from their NA Speaking as a commercial competitors is where customers insurer the biggest challenge AW Things were very different should be expending their for our business customers, 20 years ago, and customer energies. They can then rely on the role of as the economy continues its needs have definitely changed recovery, is targeting the right areas for over time. Customers have, quite JH growth opportunities. This is particularly true rightly, become more demanding in terms of for international businesses looking to invest products and levels of service. Insurers and The economy has abroad. They will be more specific about their brokers must stay aware of changing trends probably been the target markets than in the past. and adapt their policies to fit the dynamic market in which we live – and on the whole I biggest issue for our PS We know from dialogue with think the industry does that well. customers in recent customers that service levels remain a top issue. In a 24/7 DS Expectations of society in years, with individuals connected world, 21st century general have changed. We all and companies fighting customers want fast and reliable responses, expect more, more quickly and for business and focusing regular communication, early renewals, clarity of better quality. This raises on risk appetite, and of course product the stakes for both brokers and insurers, on containing costs. At development that is genuinely in tune with and demands greater investment in their changing needs. understanding our customers’ needs. We the same time we have work hard at this, often with partners such seen pretty poor returns MT The result of the wettest as Centre for Cities and the Economist winter on record is that flooding Intelligence Unit, to help our brokers feel for insurers meaning has become a major talking confident and able to add value to their upwards pressure on rates point. Like many insurers we have customers. been busy making sure we look after our which, combined with customers in impacted areas but the wider JD Customers’ expectations increased regulation, concern has been around understanding are increasing all the time and what impact Flood Re will have on making through our Net Promoter Score does mean it has been sure customers most at risk of flooding have research we can see that the bar pretty tough for everyone access to affordable insurance. is being raised continuously. The research

30 ISSUE 2 / 2014 www.biba.org.uk Conference 2014: Insurer roundtable

also shows that the key drivers of customer about underwriter remuneration and a satisfaction are quality of response and Q: deeper investment in tri-partite relationships repair in the event of a claim, as well as between client, broker and underwriter. speed of resolution and communication. Do you think there are any customer-focused JH I certainly think brokers need JH The fundamental need of trends developing that to be able to respond to different customers has not changed in brokers need to be buying trends – especially around that they want the right cover at aware of? convenience and technology. a reasonable price from a reliable The launch of our telematics product and insurer, they also want great service and their AB Obviously there is the digital integration with iMarket demonstrate the claims paid. Customers are increasingly price aspect of how they want us to importance of technology to address savvy as they hunt around for the best deal communicate with them and customer needs and one that brokers should and have access to more ways to purchase how they want to access our be aware of. The rapid evolution of social cover. We are seeing customers change the products and services but I think the most media means our customers often expect ways that they buy their insurance with an interesting trend is the expectations that answers in minutes rather than hours or increased comfort with buying online, more the public have now. They just will not days. That, combined hopefully with a far propositions to shop around and increasing accept second best and are quick to move more vibrant economy meaning customers demand to “talk to my insurance advisor when they feel they are getting that. are growing their personal wealth as well as when it is convenient for me”. Responding their businesses, requires everyone to move to the technological advances we recently AW The use of technology is faster. launched telematics, for our motor a big trend that brokers need customers, and integrated our SME offering to stay on top of to give their NA Personalisation or bespoke with the iMarket platform. customers no reasons to shop solutions rather than a one-size- around. Recognising how many insurance fits all approach is becoming more NA Our business customers propositions are sold online, finding a way important as is easy and instant have improved their governance to differentiate their offering against their data sharing such as the progress of a claim. processes and are more focused competition is vital for brokers. on long-term sustainable PS In addition to important relationships with their business partners. DS Availability and use of new standard property and casualty They are looking for a more collaborative technology, both for trading and lines, our research identifies four approach with their insurer, which means communication, is the biggest risk areas UK companies believe data sharing and guidance on legal and trend. Our industry is lagging here could have the greatest financial impact on regulatory issues. and we need to get on the train. their business: environmental, cyber, D&O and supply chain risk. All are areas where PS Customers still want JD Personal lines customers brokers and insurers need to work together good service, cover and price. demand multiple channels and to continue developing customer-centric Today they also need solutions want to be treated as individuals. solutions. that perform, compliantly, on They also want their business to a multinational basis. In the next 10-15 be prized and value for money. Commercial MT The fight against fraud is an years, 90 per cent of global growth will be insurance trends include a movement by ongoing issue facing the industry generated outside Europe. UK companies brokers from commission to ‘fee’ based and we need to all work together large and small are expanding and demand remuneration, more detailed disclosure to focus on fraud prevention and for multinational programmes will continue raise awareness that this is not a victimless to grow. PS crime. Brokers have a close understanding MT Customers want to pay a Customers still want of their clients and their expertise can be fair price for insurance cover good service, cover instrumental in helping us identify fraudulent that does what it says it will if and price. Today they activity, at policy inception or during the they need to make a claim and claims process. fundamentally that need has not changed. also need solutions that However, advancements in technology perform, compliantly, on have brought about significant changes to Q: the way customers can interact with their a multinational basis. In insurer and the speed with which they can do Do you believe claims this. It is why we have, and continue to put the next 10-15 years, 90 are central to your innovation firmly at the top of our agenda. For per cent of global growth customer proposition? example, our latest innovation, the Aviva Drive What are the key app, which rewards safer drivers, generated will be generated outside components to getting it huge interest. Europe right?

the broker CONFERENCE SPECIAL / 2014 31 BEFORE THE GIG... The crowd was psyched. The singer was sick.

When illness forced a chart-topping band to cancel their biggest gig of the season, we repaid fans and advertisers. BIBA has selected Beazley to provide its event insurance scheme for members. The scheme provides access to Beazley’s market leading event cancellation cover for a wide range of events both in the UK and internationally and includes free enhancements exclusive to BIBA members and their clients. For more information contact Michael Price on 020 7674 7336 or [email protected]

beazley.com For the events you can’t plan

32BeazleyISSUE Solutions 2 / 2014 www.biba.org.uk Limited is an appointed representative of Beazley Furlonge Limited. Beazley Furlonge Limited, a managing agent for Syndicates at Lloyd’s, is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Conference 2014: Insurer roundtable

AB Absolutely. AXA has often be the result of a traumatic event such NA a market-leading claims as a fire, flood or accident so it is essential to proposition and we guard that It is the moment of truth be able to handle the situation sensitively and BEFORE THE GIG... reputation jealously. We are quickly, with the minimum of fuss to help the The crowd was psyched. constantly looking at ways to improve, with for our policyholders. customer get back to normal as quickly as our claims transparency initiative the latest That may be a little possible. The singer was sick. example. Getting it right means focusing on the customer and not just on what we think clichéd but I am a firm they want but what we know they do not believer that good claims Q: want or dislike. handling strengthens What do you believe is AW Claims are completely relationships and that your biggest customer central to our overall proposition service success? – it remains probably the most customers recognise influential ‘touchpoint’ for the and value a supportive AB Our response to the recent customer experience. We pride ourselves floods is a great example among When illness forced a chart-topping band to cancel their biggest on providing high service propositions yet claims service. This mean many. When the Government gig of the season, we repaid fans and advertisers. with a low cost base, all backed up by helping the customer was losing its head, we and the BIBA has selected Beazley to provide its event insurance scheme strong technical expertise and operational and not simply meeting industry at large kept cool and made sure for members. The scheme provides access to Beazley’s market excellence. that customers were taken care of and leading event cancellation cover for a wide range of events both contractual obligations particularly in getting businesses back up in the UK and internationally and includes free enhancements DS Zurich’s recent broker and running, sometimes within a couple of excellence survey asked our points in what they want from their insurer. weeks. It is those examples that make me exclusive to BIBA members and their clients. brokers to rank service areas in From the moment a claim is made, we are in really proud. For more information contact Michael Price on 020 7674 7336 order of importance and claims regular communication with our customers or [email protected] was ranked THE most important out of so they are aware of the action we are taking AW We achieve customer service six service areas. It is bang central to our which avoids anything unexpected. We successes every day of the year proposition, with ease of access, trust, work hard to provide a superior experience – thanks to the focus we place fairness, and speed the key components to by highly skilled teams who understand the on our customers. One recent customer and broker satisfaction. needs of our customers, collect the right example was when Storm St Jude swept information within hours rather than days, across the country last year, our claims JD Absolutely central! The keep everyone informed and settle claims teams took care of damaged vehicles in the key components are easy fairly. We also look at ways of preventing Dover Port car park while the customers contact, simple processes, a claims through our risk consulting teams, were off on a cruise enabling them to carry strong supply chain that mirrors that’s far more beneficial to our customers on enjoying their time away. our own customer commitment, and than even the best claims experience. We want to support customers wherever clear communication. The final and most we can when our customers have genuine important component is having a team NA It is the moment of truth for losses, for example we are currently allowing of claim handlers dedicated to providing our policyholders. That may be all Ageas Household customers to progress strong customer service who deliver on our a little clichéd but I am a firm storm damage claims to a limit of £750 proposition time after time. believer that good claims handling without authorisation to speed up the repair strengthens relationships and that customers process. In addition, we are making interim JH Absolutely, it is the recognise and value a supportive claims ‘emergency’ payments for flood victims up fundamental moment of truth in service. This mean helping the customer and to £1,000. insurance, and it is central to what not simply meeting contractual obligations. we offer at RSA. Speed, fairness DS The implementation and and clear communication are repeatedly PS Claims are the acid test of impact of the ‘Rule of three’ in highlighted by our customers as stand out service, it is our product. Having claims – take ownership, move empowered experienced staff the claim forward and satisfy the DS who can help companies avoid customer. losses, take decisions on the ground and pay The implementation valid claims rapidly is vital. We have recently JD Using Net Promoter Score and impact of the ‘Rule reorganised and grown our UK claims team methodology we are loyalty with this claims service in mind. leaders in Broker Retail, General of three’ in claims – take Commercial, Engineering and ownership, move the MT Undeniably the claims Petplan. Achieving this position is no mean beazley.com For the events you can’t plan process is the proof point behind feat and takes a lot of listening – taking claim forward and the purpose of insurance. The the lessons learned and applying them to satisfy the customer circumstances behind a claim can achieve results for the customer.

Beazley Solutions Limited is an appointed representative of Beazley Furlonge Limited. Beazley Furlonge Limited, a managing agent for Syndicates at Lloyd’s, the broker CONFERENCE SPECIAL / 2014 33 is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Conference 2014: Insurer roundtable

AB emergency payments, and suitable alternative have a responsibility to make sure that their accommodation if needed and we are busy customers understand their policy and the I do not think they with the next steps of drying out properties support it encompasses should they need to and getting repairs completed to get people make a claim. expect too much back in their homes and businesses as but they are more quickly as possible. DS If they do, there is no point I am really proud of the way we responded whinging about it. We can’t demanding; they are at a time when our customers needed us impact societal trends but we can more switched on most. educate. That is not solely an ABI or BIBA issue, it is insurers and brokers – we about their rights and elect our respective bodies to represent us standards of service and cannot duck the individual responsibility. Q: JH Our biggest success is not JD Increasing customer any one initiative or any one Do customers expect expectations is the ‘new service. It is the combination of too much? Who bears norm’ and we all have to our people, their expertise and responsibility for react accordingly. Ultimately, the relationships we have with our customers consumer education? the insurance industry has to take some and brokers. Having a relentless focus on responsibility for consumer education not our customers is part of our DNA – we aim AB I do not think they expect least because it is in our best interests to get the culture right and put the tools too much but they are more to have well informed customers making in place to allow our people to deliver for demanding; they are more intelligent decisions about their purchases our customers. Our customers quite rightly switched on about their rights of products and services. demand to have a relationship with a person, and standards of service. In terms of the not an email address. intricacies of insurance, it is absolutely the JH Customers should and do responsibility of the insurers and perhaps to have high expectations, the NA At AIG we are extremely a greater extent, brokers, to educate expectation is certainly higher proud of the rapid and critical the client. than it used to be, and it is right response of our dedicated staff. that this will continue. High expectations can This includes how we responded AW Providing customers with only be good for the industry, insurers who to the major events of recent years like the the clearest possible information take the time to understand and meet the Indian Ocean tsunami, the Japan earthquake that is easily accessible has needs of their customers provide a better and tsunami and the recent Philippine to be at the heart of meeting level of service and enjoy greater loyalty in hurricane as well as the top class service we or managing their expectations. Insurers return. Certainly, insurers have a role to play deliver daily to our high-net-worth customers. in educating customers, as do brokers and our regulators. At RSA we have developed JH PS Managing risk efficiently and a broker career programme through our compliantly on a multinational Customers should and do Learning Lab sessions where brokers receive basis is an enormous challenge technical training and soft-skill development for our brokers and clients. have high expectations, from our expert teams. We also provide Our unique ACE Worldview portal enables the expectation is advice and guidance through our Risk users to manage the status of their entire Managed Surveys, which are designed to global programmes in real time, monitoring certainly higher than it help identify areas of risk that may affect everything from changing regulatory used to be, and it is right businesses, employees, customers and requirements and policy issuance through to members of the public. loss reporting. that this will continue. High expectations NA Meeting customers’ MT The torrential downpours expectations is a great throughout the winter have can only be good for challenge for any business brought misery to many people the industry, insurers and as consumers we are all and it has been an important who take the time to getting more demanding. As for consumer time for insurers to be visible, helping their education, I believe insurers, brokers and customers and getting them the help they understand and meet the regulators all have a responsibility to help the need quickly. customer understand their real needs. At Since before Christmas Aviva’s claims needs of their customers AIG we have developed a Risk Academy for teams have dealt with tens of thousands provide a better level of risk managers so that they push further their of calls from across the UK, with many technical expertise and share their experience claims settled with a single phone call. service and enjoy greater between colleagues. We see this as part of Those needing urgent support were offered loyalty in return our responsibilities.

34 ISSUE 2 / 2014 www.biba.org.uk Conference 2014: Insurer roundtable

AB Why is there so much disadvantaged. Ultimately, any cost of AB regulation? Because the regulation is also a cost to our customers, Why is there so much regulator does not trust us and that has to be justifiable against the risk and we only have ourselves to of doing nothing. regulation? Because the blame for that. If there is too much and it regulator does not trust impacts negatively on the customer, then NA Consumer protection is very collectively we need to look at how we are important. So too is product us and we only have behaving. We need to win back the trust innovation and appropriate pricing. ourselves to blame for of the customer and by extension, the Getting the balance right without regulator. compromising the customer is the constant that. If there is too much challenge. Customers that are a better risk and it impacts negatively AW Regulation is about ensuring with good risk management should benefit good customer outcomes, from lower premiums. Regulators need to on the customer, then and we should get the level of allow appropriate use of relevant data so collectively we need regulation that is consistent with that we can rightly segment customers and this desire. If insurers, brokers and other recognise their merits. to look at how we are industry participants have the customer behaving central to their business models, there should PS Regulation helps protect be less, rather than more, regulation. standards, encourages professionalism and gives PS In a strong tri-partite DS Yes, if it is not informed, customers transparency and relationship between customers, proportionate, and material to confidence. However, when it is overly brokers and insurers, we share good customer outcomes. The prescriptive or inconsistent it can drive up responsibility for managing good intent is always there, it is costs and stifle innovation. Clearly there is expectations. Education is an important part sometimes misguided leading to unintended a balance to be struck if we are to meet of that shared responsibility – the better we consequences for the audience it is trying customers’ needs effectively. manage to share information and educate to serve. But regulation should always each other, the better the risk transfer be hygiene to core values of fairness and MT There is a risk of over- solutions the industry will be able to provide. integrity anyway. regulation that needs to be addressed in order to avoid MT I think the responsibility lies JD Anything that drives better excessive caution and extra costs with all parties. It is the role of the customer outcomes in terms to consumers. We support the need for broker and the insurer to ensure of transparency and service different regulatory approaches to banking that customers’ expectations delivery can only be beneficial. and insurance and believe this can be best are met and that includes making sure they The challenge for regulators and insurers achieved through a system of regulation understand the level of cover they have alike is to find the right balance. It is that is built around customer outcomes, purchased. However, it is equally important equally important that regulation does not acknowledges the significant differences that customers play their part too. They need become a barrier to entry into markets or between the banking sector and insurers, to ensure they have met their part of the cause insurers to withdraw from certain and reflects the different risks, business agreement by providing full disclosure and markets or distribution channels altogether; models and activities of the two industries. making sure they have taken out the right reducing competition and consequently cover for their needs. customer choice. PS

JH It is tricky to get the balance Regulation helps protect right between buyer beware standards, encourages Q: and customer protection. Too much regulation can create professionalism and Can too much the impression that nothing could go gives customers regulation be harmful wrong and can actually get in the way of to customers? a great customer experience, while too transparency and little can obviously lead to customers being confidence Biomedical and life sciences insurance. New commercial package policy

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01242 806 423 [email protected] See us on stand B47 kpsol.co.uk/biba 36 ISSUE 2 / 2014 www.biba.org.uk

BIBA ADVERT.indd 1 09/04/2014 13:07 REPRESENTATION

Fighting for flood

resilienceBIBA has sought to support It is a positive solution for those Flooding issues have members’ customers affected by households at highest risk of dominated much flooding by explaining the claims flood, and will guarantee access, process, the benefits of using a affordability and excess caps for of our lobbying and broker and pressing for longer-term those included in the scheme. media activity recently. action to ensure fewer homeowners Members’ focus has been on those Graeme Trudgill and businesses are flooded in not covered by Flood Re and what the future. needs to be done to help them. reports on our multi- Our lobbying and media work has Exclusions include: faceted campaign to been largely intertwined as we seek to secure long-term solutions that l many types of let properties help all customers and will prevent homeowners and SMEs l most small businesses reduce risk from dealing with floods in the first l homes in council tax band H instance, but also by getting the right l homes built after 2009. insurance solution in place if they are flooded. Influencing the Lords We have met recently with MPs, Flood Re and beyond Defra officials and 10 Downing In terms of ensuring coverage Street to discuss the Water Bill remains once the Statement of – this is the legislation that will Principles ends, we support enable Flood Re. We have made our Flood Re. submissions to the House of Lords,

the broker ISSUE 2 / 2014 37 REPRESENTATION

Our research will also be presented to Government, since Downing Street announced it wanted evidence about any need to cover SMEs. Apart from providing feedback from members, we are also working jointly with the Federation of Small Businesses and the British Property Federation to look at any impact of excluding SMEs.

Cuts are a concern By October 2014, the Environment Agency is required to cut 15 per cent of its staff due to a fall in Defra spending. This includes specific flooding staff reducing by 557 from 3,732 to 3,175. BIBA sees these cuts as extremely serious. We do not see the flooding problems going away since many of our major towns and cities are near rivers or the coast. There is evidence in the House of Commons library which says annual spending on including Lord Sheikh and Lord de they have told us they would like the flood defence needs to increase to Mauley. Government to consider: over £1 billion a year by 2035. The ensuing discussions in the l We believe making the repair and We will continue to raise House of Lords referred to our renew grant more permanent awareness and emphasise that arguments around Flood Re’s should complement Flood Re protection against flooding is a exclusions and we also received and help build resilience into the shared responsibility between Hungry for knowledge? specific mentions from Baroness homes of those affected by the the insurance industry and Northover and Lord Crickhowell. floods. Government. Meanwhile, Lord Lytton has tabled l Improved communications with an amendment to include leasehold flood victims. In the media At Travelers, we understand that knowledge is the single most important source of advantage in business. That’s why we provide and privately rented properties. l More regular maintenance to The floods crisis attracted huge industry-specific expertise and insurance solutions calledIndustry Edge®. We were encouraged that a drainage channels. media attention and there was few days later the Government l Work to improve the lack of strong demand from journalists Providing customised commercial insurance by industry, our fully integrated insurance solutions help you stay ahead of the announced the new £10 million joined up thinking between local to bring clarity to what Flood Re competition and win and retain more business by giving you a distinct advantage over your competitors. fund for small firms. government/Environment Agency will mean and increase consumer and other local authorities. understanding. IndustryEdge® is a sign of our true expertise in specialist areas, incorporating unique industry understanding and offering Giving evidence to EFRA l Our broadcast and press The cuts from the Environment a genuine knowledge of your clients needs before delivering the right insurance solution for them. It incorporates a fully In March, BIBA gave evidence to Agency are a huge concern – and appearances have included: the Environment, Food and Rural the fact no one visited some l BBC Breakfast – promoting the integrated system of underwriting, risk control and claims services tailored to industries where Travelers has a knowledge edge. Affairs Committee. affected homeowners should be benefits of BI Our focus was to get across that addressed urgently. l ITV news at 10 – how specialist Learn how our regional proposition is providing brokers with access to local expertise and decision makers across seven brokers have a crucial role to play in l We want to see proper equipment flood brokers can help offices in the UK & Ireland. You’ll soon discover that we are passionate about insurance and proud of it. Then again, as part l helping consumers and businesses retained – in Wraysbury, Daybreak – how the industry has of The Travelers Companies, Inc., one of the world’s leading commercial property casualty insurers with more than 150 years recover from the floods and the Berkshire, the river has not been responded positively to the floods entire industry has been pulling dredged for more than 10 years l Sky News – the process of the of experience, you’d expect nothing less. together to help those who have and the dredger had been sold on. claim ® been affected. l BBC Newsnight For a taste of Travelers’ range of IndustryEdge insurance solutions and risk management guidance, visit our Tree of Knowledge We want to ensure that there is as Surveying for evidence l CNBC on stand D10 at the BIBA Conference. much preventative action taken as BIBA is consulting with members l BBC Radio 4 and 5 possible and as such, have stressed and business groups on these l The Times and Sunday Times we are very concerned with the £15 exclusions and will be producing the l The Independent million real-term annual cuts to the results shortly. We believe solutions l Financial Times Government’s flood maintenance outside of Flood Re may be l Mail on Sunday budget. necessary and we are doing all we l Sunday Express We have spoken to members and can to identify members with flood l The Guardian heard directly from homeowners schemes to ensure that signposting about how flooding has impacted is put in place with our Find a Broker Graeme Trudgill is BIBA’s them. Here are the key approaches service to commercial solutions. Executive Director travelers.co.uk Travelers Insurance Company Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered office: Exchequer Court, 33 St. Mary Axe, London EC3A 8AG. Registered in England 1034343 38 ISSUE 2 / 2014 www.biba.org.uk Hungry for knowledge?

At Travelers, we understand that knowledge is the single most important source of advantage in business. That’s why we provide industry-specific expertise and insurance solutions calledIndustry Edge®.

Providing customised commercial insurance by industry, our fully integrated insurance solutions help you stay ahead of the competition and win and retain more business by giving you a distinct advantage over your competitors.

IndustryEdge® is a sign of our true expertise in specialist areas, incorporating unique industry understanding and offering a genuine knowledge of your clients needs before delivering the right insurance solution for them. It incorporates a fully integrated system of underwriting, risk control and claims services tailored to industries where Travelers has a knowledge edge.

Learn how our regional proposition is providing brokers with access to local expertise and decision makers across seven offices in the UK & Ireland. You’ll soon discover that we are passionate about insurance and proud of it. Then again, as part of The Travelers Companies, Inc., one of the world’s leading commercial property casualty insurers with more than 150 years of experience, you’d expect nothing less.

For a taste of Travelers’ range of IndustryEdge® insurance solutions and risk management guidance, visit our Tree of Knowledge on stand D10 at the BIBA Conference.

travelers.co.uk Travelers Insurance Company Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered office: Exchequer Court, 33 St. Mary Axe, London EC3A 8AG. Registered in England 1034343 the broker ISSUE 2 / 2014 39 Continuity is... being there when you need us

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40 ISSUE 2 / 2014 www.biba.org.uk CLAIMS All together now

BIBA’s claims initiative has brought together experts from across the BIBA’s Claims Working Group insurance sector to ensure claimants Andrew Gibbons Angus Tucker John O’Neill Tony Way have increased understanding of what Mason Owen Lorega Cunningham Ageas (Chair) Chris Voller Lindsey Jon Newall to expect and are treated fairly. Alan Drury Axa Steve White Lockyers Rachel Gordon reports Griffiths and Roger Flaxman BIBA Simon Curtis Armour Flaxman Partners Graeme Trudgill Giles IBA does not believe there Malcolm Hyde Neil Bresler BIBA Stuart Clarke are endemic problems when CILA Cherish Insurance Steve Foulsham Hiscox it comes to claims, but it Simon Gifford Brokers BIBA David Bonehill does want to see action Towergate Mark Shepherd Andy Thornley Ecclesiastical Btaken were necessary, which is why David Lamping ABI BIBA Alex Hamilton it has launched a claims initiative to Brokerbility John Hurrell Nicola Martin Hamilton encourage best practice. Graham Wynes Airmic BIBA Robertson The Financial Conduct Authority Lockton Nick Balcombe Mark Baker is currently undertaking a thematic Harris Balcombe Zurich review into the claims process and so this is clearly an issue on the l to discuss ways to enhance the regulator’s agenda. customer’s experience and Talking and working out solutions understanding of the claims process The work we is often the best way to resolve l to foster wider public understanding problems and in May 2013, BIBA of the role of the insurance industry are doing is decided to bring together a working in meeting claims. party of individuals with specialist overwhelmingly understanding of claims. The Andrew Gibbons, Managing Director about engaging with group contains BIBA members, of broker Mason Owen Financial the ABI, CILA, insurers and other Services, is the working party’s the industry professionals. Chairman and newly appointed BIBA ANDREW GIBBONS board member. He commented: “The Terms of reference work we are doing is overwhelmingly Transport secretary BIBA’s work coincides with the FCA’s about engaging with the industry. Patrick McLoughlin review, but is not driven by this, BIBA will always speak out if there although we have made it clear we are are serious problems, such as when willing to work with the regulator in members in surveys have told us they this area. The group is set to continue believe insurers are taking a harder meeting for the foreseeable future. The line on claims, but we don’t support working party’s terms of reference are: mud-slinging. There needs to be two-way dialogue and this is a great l to engage positively with the FCA’s opportunity for everyone.” thematic review Mr Gibbons also wants

the broker ISSUE 2 / 2014 41 CLAIMS

understanding increased. “It’s often in a speech at the launch of the BIBA working party can do to ensure this is a overlooked by the press that insurers Manifesto in January 2014. welcome initiative.” pay something in the region of £40 Mr Gibbons emphasises that He continued: “We must never million a day in claims. Positive stories, working with external parties is also forget that the insurance policy is where the industry helped customers a positive move – and he is cheered by something the customer relies upon as in the recent floods are numerous, but the fact that there is much common a necessity when a claim arises.” unfortunately are not news.” ground. The FCA review could potentially He added that BIBA’s claims However, claims disputes can occur be difficult for the industry – should it initiative has government support, and these can be slow to resolve and be revealed that some claimants are including gaining a mention from extremely complex. being treated unfairly – and this has Sajid Javid MP, the former Financial reputation repercussions. Secretary to the Treasury. This was in Claims mediation As Mr Flaxman said: “Claims are an BIBA’s The Broker magazine and also Flaxman Partners are specialists in insurer’s shop window, ensuring the claims mediation and resolution, and prompt and fair payment of claims, providers of BIBA’s mediation facility means an insurer can expect its for members. Managing Director customers to trust it.” We must never forget that the Roger Flaxman and Senior Consultant Brokers certainly have an important Michael Wilson are both contributing role to play in claims, but with sales insurance policy is something to the working party. becoming increasingly remote, this is the customer relies upon as a Mr Flaxman commented: not always an option. “Insurance is fundamentally about According to Mr Flaxman, online necessity when a claim arises having claims paid fairly and without sales have “created a commodity- unreasonable delay. Anything a driven, non-advised sales sector in the ROGER FLAXMAN

Providing guidance for all

The working party has also agreed to produce three contract certainty, pre-placement and the protocols important new guides to help raise understanding of making a claim. There is a clear need to ensure that of insurance buyers have more education.”

Under insurance Understanding repudiations BIBA is producing a guide to help consumers avoid being AXA is working on a guide looking at why claims are under insured. According to Executive Director Graeme repudiated, with the likely title of Making Claims Clear. Ken Trudgill: “In the financial crisis, BIBA research showed that Wright, Head of Broker Development, is overseeing the many customers may have cut back on their cover to try project. and save on cost, even though in some cases, this has proved a false economy. The project was devised in conjunction with BIBA and is expected to be available by this year’s conference. This is “Brokers can help take the guesswork out of buying cover the first time AXA – or indeed it is understood any insurer – they can advise a customer what the need to haves are – has produced information of this type which is aimed and the nice to have that can be left out. Our guide will largely at brokers. He commented: “We are looking to both promote brokers’ expertise and provide practical tips create a series of guides for brokers which will help them on making sure the correct sums are insured.” communicate.”

Risk managers and larger commercial buyers The repudiations guide will be available in paper and This guide will be produced by risk managers’ association online and above all, will be straightforward to understand. AIRMIC. Mr Wright continued: “Let’s face it, policy wordings are John Hurrell, AIRMIC’s Chief Executive, explains: “Claims dull and until there is a claim, most people won’t look at is the number one issue when it comes to keeping them. Our guide will be in layman’s terms and relevant for risk managers awake at night and what BIBA is doing both personal lines and commercial customers. resonates with our members. “For example, we will be looking at where the customer “Loss adjusters we spoke to said that in 80 per cent of must have some responsibility such as in alarm protection cases where something has gone wrong, it could have or the dangers of leaving keys in a car or van. been fixed, whereas in about 20 per cent the problem was unavoidable, perhaps for example, because cover “We’re obtaining feedback from brokers who are part of was not available in the first place.” our national advisory group to get their first-hand reaction and this guide will be a useful tool to help brokers connect He continued: “We will cover areas such as the roles with their customers.” and responsibilities when buying insurance, disclosure,

42 ISSUE 2 / 2014 www.biba.org.uk CLAIMS

Tackling fraud: Side by side: IFB extends membership to brokers adjusters and assessors

BIBA has worked with the Insurance Fraud Bureau (IFB) to develop a The working party has brought together those who would traditionally be working on opposite sides of the fence – and new, two-tiered membership model to reach the wider broker market. both are supportive of the group’s aims. By providing access to their tools and products, the IFB can help brokers identify fraud atB pointIBA and of application. IFB are to launch a From a loss adjuster’s perspective, Malcolm Hyde, Executive consultation on the proposed Director of the Chartered Institute of Loss Adjusters, said he is convinced that overall, there is a willingness to provide Nick Benham, Business membershipDevelopment model Manager shortly. at the IFB, said: “Fraud good service. costs the insurance industry £2.1 billion per annum – affecting the bottom line of businesses and inflating premiums for households by "Of course there are times when things go wrong, but in many £50. Brokers are not immune to the effects of fraud, with rates offered cases, I find the people working in claims are there to help and by insurers increasingly determined by a broker’s ability to screen as we can see from the recent flooding, they work incredibly hard. fraud at the point of application and arrange ‘clean’ business. "I don’t think it’s helpful when we hear politicians make “The IFB are already working alongside Swinton, the AA, Hastings criticisms about the insurance industry when they have a lack Direct, esure Broker and Ageas Retail – sharing information in the fight of understanding." against fraud. Extending our membership model is a natural step as He continued: “As far as the working party is concerned, we continue to evolve our focus; tackling application fraud alongside there is considerable consensus. I was pleased to find our established work in detecting and alerting the industry to there was so much agreement between the working party claims fraud.” members – it certainly was not a case of ‘us and them’ namely those working for insurers and brokers. There is also a real determination to work on areas where there are problems and to try and iron these out.” industry. In itself, this is a justifiable disappointed after the claims process. business model for the intermediaries That clearly means we need to do Meanwhile, Nick Balcombe, Senior Partner at loss assessors who opt for this way of doing business; more to deliver speedier, fairer, more Harris Balcombe, said: “My view from working in our industry but it does not take into account the sensitive claims handling to both for almost 50 years is that claims and the way the public expectations of those policyholders commercial clients and consumers.” perceive these are dealt with is probably the single most who will still expect the intermediary Mr Drury concluded: “The bottom important issue which causes problems. at the point of sale to still be around to line is that great claims service provide help at the time of claim. doesn’t make for good publicity or sell “It is extremely good the industry and specifically BIBA have “We can address the manner in newspapers. I passionately believe a taken on board these issues and are actively trying to find which customers are advised about the broker can make a huge difference, solutions. Making claims more user-friendly is paramount to intermediary’s claims service, it will providing advice and guidance from these solutions.” create an opportunity for customers to notification through to settlement. compare the non-advised sale model BIBA has an important role in helping He continued: “Before we get to that point we have to make with the advised sale service and their members get that message the insurance policy more understandable and ensure that to negotiate the level of advice and over. If we do that I’m convinced the when there is a claims scenario, that insurers and their support they can expect in the event of whole industry will see more satisfied adjusters are not hiding behind the wording. a claim.” customers pleased with the outcome of their insurance claim.” “The working party are doing just that and I believe they Industry experts should be given all possible assistance. We don’t want the UK Alan Drury, Director with broker insurance market to follow the USA market into the mire Griffiths & Armour, said that if the of litigation.” claims process is to improve then “all the various stakeholders have to work closer and more effectively together. This BIBA-led initiative brings together a variety of industry experts I passionately believe a broker can and senior practitioners to review what else we can do collectively to enable make a huge difference, providing increased customer satisfaction in the advice and guidance from claims arena.” He pointed out that all successful notification through to settlement businesses need to constantly review ALAN DRURY how they serve their customers. “We still have too many customers feeling Transport secretary Patrick McLoughlin

the broker ISSUE 2 / 2014 43 REGULATION ‘Improving, but could do better’

A year after the FCA replaced the FSA, our Regulatory Working Party has completed a scorecard. DAVID SPARKES reports Our scorecard result BIBA’s Regulatory Working Party honest feedback and for any criticism was reached through and the firms they represent have to be taken constructively. assessed the FCA’s performance All the members of our Regulatory asking members of the during the past year and our report Working Party – which was formed working party a series of reads a fairly average B-/C+. in 2005 – have some responsibility How will the FCA respond to this? for regulation in their firms and questions Well, we will know at conference their opinions reflect the market. when we reveal the results and our They range from small regional experts’ views. My view is that the brokers to consolidators to London be subject to a regulatory burden as FCA would no doubt have been far Market specialists and networks. The if they were. Professional brokers happier with an improvement on the current Chair of the working party, have always been low risk. Members score Steve White gave them this Ian Dickinson, is also on the FCA’s agreed that if regulation were to stop, time last year, but we want to provide Smaller Business Practitioner Panel. they would still operate to the same They were not looking to score ‘cheap’ high standards to which they currently points but to genuinely reflect what adhere. BIBA’s Regulatory brokers feel. Our scorecard result was reached Q2 Working Party through asking members of the Has there been any noticeable working party a series of questions. To change in regulation following encourage openness, we agreed not the transition from the FSA to The Regulatory Working Party represents BIBA members on to reveal which member said what, the FCA? all matters relating to FCA regulation and compliance. It acts but we have produced answers which as a ‘sounding board’ between BIBA and members, identifies show the general consensus. A Negligible – despite the rhetoric, areas of difficulty in compliance in order to offer solutions, We would welcome other BIBA there has not been any big change in and assists in formulating BIBA’s policy position on regulatory members’ views on the FCA so please the way brokers are regulated. issues. The group is undergoing a restructure to reflect the feel you can contact me about any changes to BIBA’s governance structure to ensure that it is issues you think need raising – we will Q3 fully representative of membership and aligned to, and in feed them back to the regulator. How do you view the quality of dialogue with, BIBA’s new advisory board structure. communications from the FCA?

Ian Dickinson, Brunsdon Insurance Brokers A Face-to-face communication John Gorham, JLT Specialty FCA scorecard has improved. Members were Allan Gambles/Carl Ashton, Coversure – our members’ complimentary about the FCA’s Mark Tyrrell, Bluefin Business Risk Awareness Workshops, Elizabeth Mills, Marsh Networks views for their ability to convey what Jacquie Ward, Endsleigh Business Insurance Services the regulator is looking for. These Jenny Hemmings, Broker Network Q1 are viewed as practical and useful Insiyah Alibhai /John Teager, Towergate Is the FCA’s regulation sessions that are well worth attending. Briony Horvath, Guy Carpenter proportionate to the risk the But, the FCA’s relatively Paul Tuley, Equity Insurance Group professional broking sector new website has not been well Stephen Tearle, AA Insurance Services represents? received. Words used to describe Peter Clancy, Aon it are “clunky”, “poor” and even Robin Belsom, Ryan Insurance A No, it is not proportionate. The “atrocious”. Members also say it is David Sparkes, BIBA FCA needs to target the right sectors – “over engineered”. This is a shame Vannessa Young, BIBA brokers were not part of the problems as it seems the FCA has failed to experienced with PPI and should not realise that having good consumer

44 ISSUE 2 / 2014 www.biba.org.uk Seat of power – inside the FCA

The FCA has promised to be more visible than the FSA and has greater powers – it regulates conduct relating to the marketing of financial products, can ban products for up to a year while considering an indefinite ban and withdraw financial promotions. It is also able to specify minimum standards, can place requirements on products and has the power to investigate organisations and individuals. From the outset, the FCA has made it clear it wanted to put clear water between the way it regulated and the actions of its predecessor. Our scorecard result Many will remember back in 2012 Chief Executive was reached through designate Martin Wheatley saying the new regulator would “shoot first and ask questions later”. asking members of the BIBA’s Steve White also noted that while the FSA was “a working party a series of rear view window regulator which reacted to issues once they occurred and often too late,” he believed the FCA would questions be forward-looking, trying to spot bumps in the road ahead. Continuing with that analogy, with so many thematics underway, the FCA is in danger of being seen as pressing too information (which it does) may Q6 hard on the accelerator and while it can see the road ahead, it not be relevant for brokers and IFAs Can you describe one positive could be missing the context of the land around it. – the very people that use the site aspect about the FCA? We have been careful to look at the positives as well as the the most. We understand the FCA negatives. The FCA took over at an extremely difficult time is now conducting a review on its A The FCA has shown it is more since the FSA’s reputation had been badly damaged. website and we look forward to seeing prepared to be engaged with brokers. Martin Wheatley has made fewer inflammatory comments improvements. The FCA is also in regular contact in recent times – arguably, he has made the FCA a more with BIBA as it is seeking a better approachable organisation. On a personal note, I think he is Q4 understanding of the market and we also a better listener than his predecessors and the fact he What do you see as a frustration are encouraged by this. They have was prepared to present at our conference last year – was an when dealing with the FCA? attended a number of our compliance encouraging sign if ever there was one. forums and contributed articles to our We are also pleased to welcome Simon Green, the FCA’s A Delays. Whether it is waiting to Compliance Rules publication. Head of General Insurance as one of the panellists at our gain authorisation or simply trying In general terms, the FCA is forthcoming conference regulation debate. This promises to to get through to someone to speak also more prepared to think about be an excellent session – so if you are attending conference, to them, the working party members future problems. For example, in the do not miss it. said the FCA was damaging its mortgage market they have pre- reputation, as well as its relationship empted a problem with interest-only with those it regulates, through loans, since there can be problems regarded as a lower risk by the delays. For example there has been paying these off. However, members regulator. consultation by the FCA to revise felt that general insurance is less likely client money rules since August 2012, to result in these types of issues. Q8 and as yet, no findings have been Is the FCA conducting too much released. Q7 thematic activity? What are your thoughts on Q5 the FCA regulating consumer A Members felt the FCA has too Is the FCA subjecting customers credit? many reviews on the go and this to excessive paperwork? was leading to a dilution of what it A Members did not have problems could achieve. It is also a worry that A The overwhelming view is the with the FCA taking on consumer in focusing so much on compliance only ones benefiting from this are credit from the OFT, but they want issues, it is costing firms in both Royal Mail and paper merchants. separation from high-risk groups such monetary and time terms, taking This is despite the FCA’s behavioural as payday lenders. It is frustrating for attention away from actually serving economics paper admitting its members knowing they are familiar customer’s needs. predecessor was wrong to feel with and committed to tenets such throwing more information at as TCF for many years when others the consumer is going to improve new to regulation and arranging David Sparkes is BIBA’s Compliance and customer outcomes. potentially much larger loans are Training Manager

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46 ISSUE 2 / 2014 www.biba.org.uk SCHEMES A perfect fit Catch up on our latest offerings from BIBA and to practical support to help them reschedule the event, or prevent our expert providers, which cover events, a cancellation. engineering inspections and claims advocacy. The ‘Get into Reading National Conference and Readers Day’ is MIKE HALLAM reports perhaps typical of many conferences held in the UK. Some 200 attendees to festivals and tournaments to trade paid between £65 and £100 Event insurance shows. Cover is available both in the for tickets, yet adverse weather = a new UK and internationally, and with over conditions led to the event being 5,000 events taking place each year cancelled the day before it was due opportunity in the average UK town, demand for to start. The events sector is a diverse one and event insurance is rising. The event organisers offered ticket provides brokers with plenty of scope for When staging an event, the holders a full refund or the option new business throughout the year. event organiser takes on significant of transferring their tickets to a financial commitments. They will rescheduled event to be held later in Many issues can impact the success have thought through every last the year. Beazley’s event cancellation of an event, from adverse weather detail within their control; however insurance covers both the cost of the through to illness of a key performer, they also need to prepare for the refund and also the costs associated strikes, transport delays or power unexpected. With specialist event with rescheduling the event, even failure at the venue. cancellation insurance, they can rest if these costs are in excess of the Events of all sizes can be covered assured that not only will they receive original policy limit. It protects the by event cancellation insurance, financial assistance if problems event organiser’s financial liability, as from conferences to concerts, fêtes arise, but they will also get access well as their reputation.

The BIBA scheme from Beazley includes: l financial loss arising from When staging an event, the cancellation, disruption, or organiser takes on significant rescheduling of an event l additional costs or charges paid by financial commitments the client to avoid or reduce a loss l property damage, including materials and equipment loaned, owned or rented, while in transit directly to or from the event, or while in use at the event l cash held at the event l enhancements available include terrorism cover, communicable disease, and national mourning.

For more information on Beazley’s event insurance for BIBA members contact Michael Price on 020 7674 7020 or email [email protected]

the broker ISSUE 2 / 2014 47 SCHEMES

cases that Flaxmans have dealt Engineering with. A broker referred a contractor inspections make client’s third party liability claim that had been rejected by the insurer for workplaces alleged breach of a heat warranty leaving the policyholder uninsured safer for a loss of almost £200,000. Our scheme can help brokers and their The third party’s property insurer, clients ensure they know what plant then subrogated to recover its loss and machinery is subject to statutory from the uninsured policyholder inspection. a firm that had been in business without a blemish for nearly one We work in an ever-increasing hundred years. Liability without regulatory environment with much insurance would have bankrupted of this regulation governed by the the contractor. Health & Safety Executive (HSE), Flaxmans negotiated a which has statutory powers. scheme provider. As well as providing compromise settlement with insurers Managing health and safety risks in engineering insurance products and kept the firm in business. The the workplace is essential and failure members will have access to an broker was hailed a hero in their local to do so could lead to prosecution, engineering inspection service. community. sanctions under the Corporate This carries a service guarantee Manslaughter Act, unlimited fines, ensuring that your clients will be fully Market knowledge and possible imprisonment, reputational compliant at all times. This scheme precedent in insurance practice damage to brand and corporate is backed up by a national training A hotel in a northern town suffered identity, harm to staff and loss of programme designed to help brokers a third party liability claim for injury production. understand the requirements of to a visitor allegedly caused while Simply catering for your clients’ current legislation, the plant and using the hotel’s leisure equipment. property and liability insurance cover machinery affected and of course, Insurers refused cover on the grounds requirements in their workplace and the frequency at which it needs to be of the application of an ‘advice’ beyond does not provide enough inspected. exclusion clause. The brokers and protection for their business when it lawyers tried unsuccessfully for comes to HSE regulations. For more information contact Steve more than three years to overturn Most, if not all, businesses will Dutton or Ewan MacDougall on the insurer’s decision but were have engineering inspection needs. 020 7977 5222 or email unsuccessful. Plant, machinery and electrical [email protected] Flaxmans were able to recognise installations all require independent a precedent in market practice that inspections to ensure that they are would satisfy a reasonable insurer safe and fit for purpose. This is a legal Claims advocacy that the exclusion relied upon had requirement and not a ‘nice to have’. – getting to the been misapplied to the circumstances of the claim and successfully The main regulations that govern heart of the persuaded the insurers to review their plant and machinery are: decision and pay the claim in full l Lifting Operation and Lifting matter some five years after the event. Equipment Regulations 1998 Working with specialists like Flaxmans’ team of senior (LOLER) Flaxmans can provide the breakthrough consultants are experienced market l Pressure Systems Safety claimants need. practitioners who understand how Regulations 2000 (PSSR) the industry works in practice as well l the Electricity at Work BIBA’s newly appointed Claims as how the interpretation of insurance Regulations 1989 Advocacy Service from Flaxmans claims turns on several different l the Control of Substances gives members access to a free initial factors as well as the policy wording. Hazardous to Health Regulations consultation on any matter that A non-litigious, pragmatic and 2002 (COSHH) concerns them about their client, mediation-style approach to resolving l the Provision and Use of Work their client’s claim or their own PI differences between policyholders Equipment Regulations 1998 situation. and insurers has multi-faceted (PUWER) It is not just the big and complex advantages to all parties and has cases that they take on, sometimes consistently delighted our members. Knowing which items of plant and it is just about fighting the client’s machinery require a statutory and the broker’s corner; for what For more information on claims inspection and the frequency at which is right, what is fair and what is an advocacy, contact Roger Flaxman on these events are carried out can be entitlement. 0207 702 4150 or email something of a minefield, not just [email protected] for insurance brokers but also for the Intervention and negotiation – clients themselves. stops insurers pulling the plug Mike Hallam is BIBA’s Technical E S Risks is BIBA’s engineering The following is typical of the smaller Services Manager

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the browww.reg.uk.comker ISSUE 2 / 2014 49

C448-reg-advert-A4-AW.indd 1 04/04/2014 14:33 APPRENTICESHIPS

Bringin the Taking on an apprentice is something brokers should consider – it requires time and effort, but the rewards can be great, says LEIGHANN FORSYTH

Brokers who want to invest for the BIBA’s Steve future may well find now is the ideal newWhite and time to take on an apprentice. Graeme Trudgill meet Matthew The insurance industry has just Hancock MP, launched its first ever sector-wide Minister for Skills apprenticeship scheme. It was and Enterprise launched recently at an event which football legend Sir Bobby Charlton and MP Matthew Hancock attended, along with a number of BIBA representatives. The scheme is a response to Government’s Insurance Growth Action Plan, which BIBA is supporting study for CII qualifications. Some 130 which we lobbied for, is a real along with the CII and ABI. employees are currently on the alternative for those who do not want The plan is about driving growth in programme and the majority are to go to university after A levels. We our sector and the industry has offered permanent positions. offer roles in a variety of teams committed to double the number of Anne Entwistle , Learning and including broking, underwriting, apprentices in insurance. Development Manager at Bluefin, customer services, finance and We feel there is potential for many recommends brokers who may be new general admin.” broking firms to benefit. Chief to apprenticeships should find out She continued: “This is a mature Executive Steve White said: “BIBA more from the CII. industry with many people over 40. made a public commitment to support The firm also participates in the We are also a sector that tends to the Insurance Growth Action Plan CII’s ‘Trailblazer’ programme which cherry pick staff from other firms. We and apprenticeships in our Manifesto. means as an employer, it can wanted to change this and to grow our Our members are keen to support this contribute to directly influence the own. There’s been a lot of support initiative and we are delighted to play content of future apprenticeships. from managers and we’re already a lead role in delivering this.” Ms Entwistle commented: seeing the benefits.” Broker Bluefin has been taking on “Apprenticeships have traditionally apprentices since 2008. Its scheme been seen as an option for those who Leighann Forsyth is BIBA’s Head of combines technical training with are less academic, but the higher level, Communications Learning on the job: Bluefin’s apprentices

“I found the programme really helped “As I decided not to take the option “The apprenticeship programme has “Participating in the apprenticeship me to reach my goal of getting my of university the apprenticeship has been of great benefit and has enabled scheme has given me much more Cert CII. It gave me confidence in my benefited me greatly. It’s given me me to grasp a good understanding of confidence in my job role. I’m able daily job and this will help me reach confidence when speaking to clients insurance practices. It’s enabled me to apply the knowledge I’ve learnt to my full potential. The apprenticeship on general insurance knowledge to work with confidence in my role my everyday role. As a result, I feel is such an amazing programme and I and being qualified will allow me to and encouraged me to push myself I’m able to benefit our clients more would recommend everyone to progress into future roles that I am harder to move through the different as I have a better understanding of sign up.” aiming for.” modules and to learn about different not only insurance, but Bluefin as a Pijitra Ning Saelor, London Market Sophie Cooper, Assistant to MD roles and aspects of my job.” company.” Operations Chelmsford branch Matthew Weeks, Commercial Samantha Lord, Elite Underwriter Broker

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