Despite the investment that many insurers continue to make in their own direct to consumer propositions and the continuing influence of the price comparison websites, the revenues and profits reported by personal lines brokers have increased over the past five years.
Now some of this is due to premium increases, particularly in the motor market, but a good chunk of their success is down to how they have adapted to low rate environments and threats to their business by selling additional products and offering fee-based services.
And it also appears that price comparison sites are not as big a threat in the personal lines space as they might be assumed.
If there is even a sniff of a risk falling into the non-standard net, it can be far more difficult for the customer to buy cover through an aggregator. And from analysis of the thousands of quotes that intermediaries place through The Source, we know that when it comes to household insurance around 40% of properties are now classified by insurers as non-standard.
The non-standard net encompasses the usual suspects of properties in flood risk areas but also captures properties within 5 metres of any trees taller than 10 metres, homes that have ever shown signs of or have been monitored for subsidence, landslip or heave. Any home built of non-standard materials is caught in the net as are thatched cottages or properties with anything other than slate or tile on their roof. People running a business from home could find themselves considered non-standard and if an insured calls to enquire whether they could make a claim, they too are increasingly cast into the non-standard basket.
In some ways, the aggregators have unwittingly advertised the benefits of the expertise that brokers and intermediaries provide. They’re not built to extend a personal service, rather they’re built to promote price. Well price doesn’t matter to householders who can’t get a quote when the computer says no.
Intermediaries should not ignore but market the value they deliver to their customer by sourcing the cover that meets their individual – and increasingly non-standard – needs. Your expertise can make a real difference particularly to those struggling to find cover – and that gives you the opportunity to create a lasting relationship.
Certainly it seems the lesson learned by our cousins in the insurance market is that profitable business is based on building relationships that helps to deliver increasing renewal rates.
