Brokers warn insurers: shape up

In a report by Insurance 360 - a research unit established by PB's publisher, Incisive Media - intermediaries graded insurers on seven aspects of service. Their feedback showed frustration - as ever - with poorly-staffed and badly-managed call-centres. The seven largest insurers in our study were all identified as serious offenders in this area.

Time wasted hanging on the telephone caused much resentment, especially when the staff member picking up the call has to refer it onwards. The trouble is that, for small package business in particular, direct telephone access to trained people is uneconomic; yet even small and medium-sized enterprise risks routinely defy insurers' efforts at pigeonholing.

Shining example

The insurers that fared best were those working hard to produce slick, broker-centric online systems for low-premium business, freeing more highly skilled people to take care of business for which human judgement is indispensable. MMA's Broker Online and Evergreen's Stage 2 systems were popular with brokers and highly successful.

There is nothing new here. What has improved is the execution and delivery. To do their jobs, such systems need to be broker-friendly and have top-notch technical and underwriter support on tap; it is no help to dismiss phone enquiries with responses like 'you should get that from our website'. Many large insurers have failed in this way. Technology is proving a powerful leveller and, in smaller-premium commercial business, more manoeuvrable players are seizing its opportunities.

The hardening market is also revealing a shortage of trained underwriters. Allianz and AIG were considered passable in this respect; the best performers were largely old-school specialists such as Northern Marine Underwriters, Beazley, Chubb, Catlin and Hiscox: the underwriters of these companies knew their products and sectors inside out.

Another revelation was the rise of online documentation systems. A year ago, many brokers moaned about them and the reams of expensive printing. Now, we've passed a watershed: insurers' online documentation has improved and brokers have shifted towards paperless processes.

Several newer insurers and managing general agents - such as Evergreen, Arista and LV - have practically built their companies around frictionless, instant documentation that is designed to be short, clear and e-mail- and client-friendly. It is no accident that brokers rated these three as the top performers for documents being timely and usable.

Other insurers are still in transition, leading to marked contrasts in satisfaction between the brokers using their online documents and those lumbered with the contents of heavyweight manila envelopes. Some insurers, however, such as Axa, Aviva, RSA and AIG, remain bogged down in legacy issues where documentation is concerned and so risk being left behind.

Big composites are struggling with renewals, too: the bottom quartile included all seven of the largest insurers. Bureaucratic inefficiency was one cause with another the tendency to demand universal rate rises. At smaller mono-line markets, management was closer to its underwriters and more willing to trust their commercial feel for what clients would bear.

Concerning products, newer, more focused, compact insurers are performing far better. They are supplying specialist products carefully designed and continually updated to match the real needs of today's clients.

Outsourcing woe

In claims, as ever, shambling admin, poor call centres, apathetic staff and rejection quotas were giving brokers headaches. Straitened insurers are outsourcing more work to external contractors but few are managing the process competently.

AIG and Arista were poor performers on claims with weak contractor management a prime cause. Outsourcing can work well but insurers have to pick their suppliers carefully and put tight systems in place to make sure that they deliver.

Half of the 40 most-used insurers in the commercial broker market are underperforming on some, most or all aspects of their services. Clients have a choice, though. High-performance start-ups, competent mid-sized insurers and skilled mono-line specialists are competing in every line of commercial business. The podgiest composites would be advised to start a fitness programme.

• To purchase a copy of the report, entitled The Business Insurers Insight Study, e-mail peter.joy@incisivemedia.com.