D
Dogbert
Guest
A friend faxed me a letter to the editor from November's Irish Broker magazine. It's from a Sean Cleary of Cleary Callinan Public Loss Adjustors, and is prominently featured (full page) in the magazine. In addition, the editor apparently comments on it in his editorial (haven't seen that).
The issue Mr Cleary raises is in relation to quotes for his house insurance renewal. In short, he received the renewal notice from his broker showing an increase of 100% on last year. The broker discussed ways of cutting the costs with him, and also got some comparative quotes. He then went to his bank, where he got little or no assistance, but was quoted a premium 30% less than the broker. Finally, he went online, and via that and a call centre where the staff had "no idea what I was talking about" got a quote which was only 10% higher than his last year's premium. He took the latter. Apparently the quotes in each case were on behalf of the same insurer. Mr Cleary seems perplexed at all this, and says "If I were to be cynical about this, there appears to be a move by insurers to prevent the client from access to professional advice".
Huh ? Am I missing something here ? I have no experience of or interest in the motor insurance business. However, the business model Mr Cleary encountered seems entirely rational to me - you do it self-service, you get no help but a lower price; you get help from a non-independent source, you get no choice, and pay a somewhat higher price; you get independent advice and someone who'll shop around for you, you pay a higher price (especially as the adviser will presumably be remunerated by the supplier). Mr Cleary clearly had the ability to get independent professional advice - he just had to be prepared to pay for it ... which he wasn't.
It would seem, given the prominence accorded this missive, that the insurance business remains completely wedded to an outmoded business model. No wonder advisers are having problems with the new regime, given that lots of them don't seen to understand what "advice" actually means.
The issue Mr Cleary raises is in relation to quotes for his house insurance renewal. In short, he received the renewal notice from his broker showing an increase of 100% on last year. The broker discussed ways of cutting the costs with him, and also got some comparative quotes. He then went to his bank, where he got little or no assistance, but was quoted a premium 30% less than the broker. Finally, he went online, and via that and a call centre where the staff had "no idea what I was talking about" got a quote which was only 10% higher than his last year's premium. He took the latter. Apparently the quotes in each case were on behalf of the same insurer. Mr Cleary seems perplexed at all this, and says "If I were to be cynical about this, there appears to be a move by insurers to prevent the client from access to professional advice".
Huh ? Am I missing something here ? I have no experience of or interest in the motor insurance business. However, the business model Mr Cleary encountered seems entirely rational to me - you do it self-service, you get no help but a lower price; you get help from a non-independent source, you get no choice, and pay a somewhat higher price; you get independent advice and someone who'll shop around for you, you pay a higher price (especially as the adviser will presumably be remunerated by the supplier). Mr Cleary clearly had the ability to get independent professional advice - he just had to be prepared to pay for it ... which he wasn't.
It would seem, given the prominence accorded this missive, that the insurance business remains completely wedded to an outmoded business model. No wonder advisers are having problems with the new regime, given that lots of them don't seen to understand what "advice" actually means.