Going back to the future

Insurers are once again paying attention to the merits of high-street broker outlets, in particular the ones with statistically better loss ratios and close relationships to clients.

In recent years, many insurers have decided that the path to prosperity has been in chasing business volume rather than quality, most obviously by focusing on aggregator trade: the old adage 'turnover is vanity, profit is sanity' springs to mind as a good explanation for the weakness of this model. It is proving an interesting time, with reports of less-than-satisfactory performance from alternative distribution channels.

Low investment returns seem to be forcing a reality check. Insurers can no longer rely on investing premiums to deliver returns, so are keen to write for underwriting profits. The result is that an increasing number of insurers are once again remembering the merits of the high-street personal lines broker.

Networks should theoretically be the beneficiaries of this move towards improving the quality of business written but this doesn't seem to be happening across the board, although it is true for personal lines specialists that have the ability to help our members with cross-selling, upselling and Treating Customers Fairly as high priorities.

The high street will struggle on price alone but, with the personal approach and more involvement with the customer, it is still possible to achieve high renewal retention and to maintain and build a loyal customer base with cross-selling and upselling high on the agenda.

It is encouraging that insurers are publicly courting high-street brokers and see this distribution channel as a way to achieve profitability. So, does this herald a renaissance for traditional face-to-face broking? Yes, so long as the brokers have the knowledge, experience, products and systems to offer a personal service combining old-fashioned values with the benefits of modern technology.

Paul Muir, managing director, 1 Answer Network.