Phil Jeynes, sales and marketing director at Underwriteme, considers the value - or lack thereof - of being a single tie protection broker.
Phil Jeynes, sales and marketing director at UnderwriteMe, considers the value - or lack thereof - of being a single tie protection broker.
Whether or not Henry Ford ever said “you can have any colour you like, as long as it’s black” about the iconic Model T, is open to debate.
However it’s certainly true that since his was essentially the only viable product on the market Ford called the shots in terms of what his customers could expect.
Customers perhaps sacrificed choice and variety in favour of a reliable product, smooth process and affordable pricing.
The same thing happens in today’s protection market, in the guise of restricted panels and single tie arrangements.
Many large networks, banks and third party sellers opt to give their customers limited or (in the case of single ties) no choice of insurer and product, in return for a simpler buying process and fewer complicated choices.
Distributors weigh up the benefits of a small panel against the risks of putting all their clients’ nest eggs in one provider’s basket – and the risks are not insignificant: reputational risk should that insurer’s brand suffer a public scandal, service issues in their back office, IT complications outside the intermediary’s control, failure to handle claims effectively in the future, pricing and underwriting changes which affect their competitiveness.
Of course, all the major insurers in the UK have fantastic track records in respect of most of the above and have rigorous procedures in place to ensure consistently good service.
But it’s perhaps surprising to those outside our marketplace that major firms still opt for a single tie or small panel deal.
The buying and selling process in protection remains one key reason to single tie.
Aside from UnderwriteMe, it’s impossible for an adviser or customer to see genuine prices, underwritten by a range of insurers with buy-now capability.
To achieve this fundamental need, the expectation is that they conduct a separate application with each insurer they wish to see a price from, on that insurer’s own website, one by one.
Imagine Amazon asking you to buy books one at a time and through a different process for each publishing house and you’ll see how ludicrous that expectation has become in 2016.
It’s for this reason distributors are still willing to throw their lot in with a chosen insurer, as well as the advantages that a close partnership/collaboration can yield, in terms of dedicated support, specialist products and improved commercial terms.
The protection industry must make use of the technological advantages that are available if we’re serious about growth.
One quote, which definitely is attributed to Henry Ford, seems apt: “History is more or less bunk.
“It's tradition. We don't want tradition. We want to live in the present and the only history that is worth a tinker's damn is the history we make today.”
