Author: John

No Pants please – we’re insurers

At the beginning of April, the 1st of April, I was asked to speak at Lloyds of London.

Now those of you that know me well will imeadiatley think ‘are they crazy? Going to let John speak on April Fools day?’

I understand the concerns but despite my instinct to present a world in which the FCA were behaving in a sensible, non contradicting way as a joke, I realised that people attending would be earning CPD points and so there had to be some real content.

I recalled some comments I had heard months before about insurance being a commodity and therefore the only was to sell on price. Rubbish. I did an entire presentation revolving around ladies pants.

It’s possible to buy ladies pants at 4 pairs for a tenner at Marks and Spencer, £25 each at Victoria Secrets and £250 a pair at Versace – and I illustrated with pictures of there websites.

All the ‘insurance people’ around me said I couldn’t do this, show ladies pants in the revered wooden panelled library at Lloyds. I didn’t listen.

The talk resulted in more feedback and follow up than had – according to my host – had ever happened from a talk there (and theres been 1 a month for more than 10 years). It was all extremely positive – we will make sales from it, people are still referring to the ‘pants’ talk when they call us.

I even had the professional standards director of the CII (the body that regulates conduct in our profession) ask if she could borrow the slides.

Moral of this story is, do what you believe in – ignore all people around who say you cant. Cant just means its not been done yet.

Don’t think I’m right, come on down…

Aviva blames software houses for too-high premiums.

Aviva has launched its own internal extranet for brokers to get cheaper prices by ‘removing software house costs’.

Well, good luck to them – nothing wrong with that. Apart from they now need their own developers to maintain it.

But, the underlying issue is software house costs should be miniscule. If they are not then YOUR’E USING THE WRONG SOFTWARE!

If brokers want the cheaper rates but still through a software house, then you just need to look at alternative software houses! There are other providers outside of the big three who monopolise the market currently that offer the same, if not better services, at a fraction of the cost – we’re talking pin numbers rather than telephone numbers. Insurers and brokers just need to look beyond their own back door for alternative ways of being competitive whilst still giving brokers, and customers, what they want.

Let’s look at personal lines – home, van and motor for example. Let’s assume a typical broker places 2000 polices a month. ‘Pin number’ software providers might add something like £1 to the cost of a policy. If £1 is going to make a difference to how much business you write, there’s something else wrong. Suppose you write 10% more business, then the cost falls to about 80p. You pay your card providers more than that.

 

Think I’m Wrong?

Come on down… Leave a comment below.

Computer says no….

 

Earlier this week, BIBA released the results of a survey whose headline was ‘Nearly 40% say the sector has not embraced innovation and 44% of brokers also don’t believe software houses have done enough to innovate.‘ (https://www.insuranceage.co.uk/broker/3287566/biba-insurtech-survey-reveals-market-split-over-embracing-innovation)

Really? well, that might be true of a lot of software houses, but its certainly not true of SchemeServe!

BIBA’s research is baffling on the one hand and not surprising in the least on the other hand. It is incredibly frustrating to hear that nearly half of BIBA brokers don’t think software houses embrace innovation when this is at the core of what we do. We innovate every day. Is the issue here that sadly 80% of the broker market is in the hands of just a few large software houses that have become staid and don’t innovate as they should do? Perhaps brokers shouldn’t follow the pack – take a look at what else is on offer – you’d be amazed. Online quote and buy systems for new products and schemes delivered in just 15 days and for under £2k? That’s innovation that’s happening right now.

BIBA’s research says the barriers to embracing more Insurtech are mainly cost of implementation (77%). At £2k a month – really? By embracing cloud based quote and buy solutions for its commercial and schemes business, one of our broker clients has grown its business from £3m to £20m, with 30% year on year growth for the last two years. They’ve stripped out 60-70% of the manual elements of transacting business with brokers and reduced headcount by over 50% in order to generate in excess of £250,000 savings in the last year and show an 85% retention rate in its broker and insurer base.

The research also says that 39% of brokers believe lack of awareness of the options were a barrier to greater take up of technology. Surely this is the main issue as I see it. As software providers we clearly need to do more to make brokers aware of the great things we’re doing and help them to cash in on the cost savings and efficiencies on offer from Insurtech solutions; but realising the benefits of innovation is a two way process and brokers need to be prepared to take a look at new ways of doing things.

 

Think I’m wrong? Don’t sit there, Come on Down…. and leave a comment.