We as consumers are being bombarded with witty advertising, hilarious mock TV shows and not-allways-so-elegant call centre agents telling us that it is better to insure directly and cut out the "expensive" middle man. Nay, it is the only way. A large emphasis is placed on the fact that financial advisors are irrelevant and pesky little money grabbers with no value within the short term insurance realm. Even worse, they are a pure burden to the consumer. A recent advert comparing a broker to a fish and chip sales person is a clear indication that little to no regard is being placed on the value of the role of financial advisors and brokers play within the short term insurance industry.
The prudent question that needs asking is whether we believe this propaganda? Clearly we do, with direct insurers being the fastest growing companies in this sector. Why is it that we happily trust a call centre operator with insuring our valued assets and now even our lives. Let's take just two points into consideration when we unpack direct insurance for ourselves, ignoring propaganda just for now.
It does not take a rocket scientist, brain surgeon or experienced high level business manager to understand that the very friendly call centre operator, assisting you in obtaining your insurance, is in fact a low level employee within the company. They are mandated, remunerated and whipped into selling high volumes of policies to the voices on the other side of the line. Therefore making it impossible to remember a little terribly unimportant thing like your name. I still vaguely remember a time were your name was still an important or at least part of customer service. But let's not blame direct insurance operators blindly, clearly we are more than satisfied to be Mr/Mrs. Anonymous that is 12th in the key with account number 51234.
The other aspect prudent to at least review in our minds are disputes. If you have a dispute on your claim who would you speak to? The answer is quite simple, their legal department. Gone is the friendly low level employee. Welcome to the more robust attitude on Floor 2, the legal eagles. Fairly recently a young man, alleged on Hellopeter.com that he was effectively bullied by a large direct insurer's legal eagles into signing documents that eventually led to his claim being denied . Now no one, especially not me, is claiming that the young man is telling the truth about the matter or dares to even start discussing the merits of his claims against the insurer. The fact of the matter is; that when a dispute arose his communication point was moved from the friendly, young and understanding voice at the call centre to the gray and sarcastically polite legal department. Generally a department that is an intimidating place for any non legal professional.
Now bringing that into comparison with a broker environment. Who would be the voice on the other side? Your friendly broker who does know your name, probably struck by fear and panic. If your claim is not paid you may now be cancelling the balance of your portfolio. He has visions of lapses, friendly men from Wesbank fetching the flashy second hand BMW and the wife leaving with the pool boy. He has no legal department, so this battle he faces with you. If it is warranted that a legal department of an insurer has to get involved you would at least be "protected" if not just escorted by a shaken up praying broker, whom understands at least every third bit of jargon that is spewed across the table. So at the very least he or she is not just a voice on a crackling telephone line, but a qualified person that has, even if out of self interest, your interest at heart.
One must consider the massive regulatory changes. Financial Advisors are no longer head hunted from a pool of dilinquent car sales people. They are forced to make a life study of their work and the environment they trade in. They are constantly subjected to examinations and intimidated by a watchdog that sometimes acts like it has some aggression disorder. The job title of financial adviser is fast becoming a professional title, not just a "polis-smous"
This article is in no way aimed at being an attack on direct insurance, although I must convey my surprise and utter disappointment that the broker industry has not attacked back with similar vigour. It is merely aimed at providing some perspective within the propaganda.
The prudent question that needs asking is whether we believe this propaganda? Clearly we do, with direct insurers being the fastest growing companies in this sector. Why is it that we happily trust a call centre operator with insuring our valued assets and now even our lives. Let's take just two points into consideration when we unpack direct insurance for ourselves, ignoring propaganda just for now.
It does not take a rocket scientist, brain surgeon or experienced high level business manager to understand that the very friendly call centre operator, assisting you in obtaining your insurance, is in fact a low level employee within the company. They are mandated, remunerated and whipped into selling high volumes of policies to the voices on the other side of the line. Therefore making it impossible to remember a little terribly unimportant thing like your name. I still vaguely remember a time were your name was still an important or at least part of customer service. But let's not blame direct insurance operators blindly, clearly we are more than satisfied to be Mr/Mrs. Anonymous that is 12th in the key with account number 51234.
The other aspect prudent to at least review in our minds are disputes. If you have a dispute on your claim who would you speak to? The answer is quite simple, their legal department. Gone is the friendly low level employee. Welcome to the more robust attitude on Floor 2, the legal eagles. Fairly recently a young man, alleged on Hellopeter.com that he was effectively bullied by a large direct insurer's legal eagles into signing documents that eventually led to his claim being denied . Now no one, especially not me, is claiming that the young man is telling the truth about the matter or dares to even start discussing the merits of his claims against the insurer. The fact of the matter is; that when a dispute arose his communication point was moved from the friendly, young and understanding voice at the call centre to the gray and sarcastically polite legal department. Generally a department that is an intimidating place for any non legal professional.
Now bringing that into comparison with a broker environment. Who would be the voice on the other side? Your friendly broker who does know your name, probably struck by fear and panic. If your claim is not paid you may now be cancelling the balance of your portfolio. He has visions of lapses, friendly men from Wesbank fetching the flashy second hand BMW and the wife leaving with the pool boy. He has no legal department, so this battle he faces with you. If it is warranted that a legal department of an insurer has to get involved you would at least be "protected" if not just escorted by a shaken up praying broker, whom understands at least every third bit of jargon that is spewed across the table. So at the very least he or she is not just a voice on a crackling telephone line, but a qualified person that has, even if out of self interest, your interest at heart.
One must consider the massive regulatory changes. Financial Advisors are no longer head hunted from a pool of dilinquent car sales people. They are forced to make a life study of their work and the environment they trade in. They are constantly subjected to examinations and intimidated by a watchdog that sometimes acts like it has some aggression disorder. The job title of financial adviser is fast becoming a professional title, not just a "polis-smous"
This article is in no way aimed at being an attack on direct insurance, although I must convey my surprise and utter disappointment that the broker industry has not attacked back with similar vigour. It is merely aimed at providing some perspective within the propaganda.
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