|
| |
There has been much debate over whether a
customer should use an Insurance Broker or go direct. The following article was
written to help the consumer understand the value of the "middle-man" when
placing business with an Insurance company.
It is important to also understand that the biggest proponent of
cutting out the middleman, namely, Outsurance, is part of the First Rand Group
which also comprises Discovery Life, Discovery Health, Rand Merchant Bank and
Momentum (includes Southern Life and Sage). These latter mentioned companies all
rely exclusively on the support of the middleman to stay in business. Does it
not make you wonder at the logic of it all?
| The benefits of using a broker for
insurance |
Short-term insurance brokers have
numerous skills that can add value to a consumer, and by working through a
broker can benefit you in many ways. A
broker can add value through his expertise, knowledge and by independently assessing products
and facilitating service with the Insurer.
"The broker is not a middleman but rather a member of "your team".
There are so many insurance policies to choose from and the industry
is more competitive than ever and the choice of policies is huge. New
policies are being developed and old policies are being enhanced. Policies
can be highly flexible, enabling you to add cover, reduce cover or customise
your cover. You may need advice if you want the right cover at the right
price for the right circumstances.
Careful thought has to be given to limits, exclusions, special conditions
and the extent of the cover as a whole. Reducing premiums can simply be
achieved by reducing cover in one form or another and this can be concealed
from the client until claims arise.
Professional brokers are well placed to assist in market education on issues
like this.
Policies - especially the fine print - can be
complex and expensive. Policies are now more complicated than ever and you
may need help in understanding them. Recent legal claims and counter-claims
have exposed the need for a more precise understanding of liabilities and
exposure. Contract wordings and the interpretation given to certain terms
and conditions have been updated and changed. You may need help grasping how
subtly amended definitions affect your cover.
People have too little time to deal with insurance issues. With modern
lifestyles and the growth of two-breadwinner families, working couples face
major time pressures. this is when a good broker can be very valuable,
because they can delegate insurance issues - including the processing of
claims - to their broker. The broker deals with many claims and know what
the insurance companies expect in order to process claims without delay and
without the threat of repudiation (provided the claim is genuine - of
course).
Brokers do not have a conflict of interest
because they do not carry the risk of having to pay out your claim. He will
therefore not be influenced or motivated to dismiss a claim due to the
extent of the cost of the claims. Brokers have your interests at heart, and
their primary concern is the fair and prompt settlement of your claim.
The 'new breed' the direct insurers are centralised and offer
their services from a call centre. Brokers, however, are localised and have
a customer focus, giving quality advice and attention to customers.
Make the most of your broker by:
Arrange regular reviews. It's your responsibility to ensure cover is
adequate, but professional help is always useful. Renovation and building
costs tend to go up over time; replacement values of household goods do,
too; inflation affects all prices; an extra year "on the clock" affects
vehicle trade-in and retail values. Such factors should be reviewed to
ensure cost-efficient cover in line with your needs.
Keep your broker "in the loop". When a significant event occurs, tell
your broker. It may affect cover or pricing. Examples include retirement,
your 25th and 55th birthdays, moving home (especially if up-scaling,
downscaling or entering more secure premises) and the departure of offspring
from the family home.
"The smart consumers' response to greater insurance complexity and greater
pressure on their personal time is to harness the broker. Put him or her to
work. The broker provides value-for-money services. Smart consumers will
optimise that value." Further, the enactment of the Financial Advisory and
Intermediary Services Act and the debate around the broker's role will
foster even higher levels of service from insurance brokers.
|
| |
|
Gavin
Bramley