Many big insurance underwriters of late have been advertising themselves as being cheaper, when a prospective insurance buyer buys directly from them. When news reports state that the Bank of England has to use its own funds to bail the out the British economy in a bid to avoid a second recession, many thrifty insurance buyers may be tempted to embark on such a cash saving exercise.
Research conducted by RiskHeads back in 2010, paints a very different picture however.
Survey respondents considered the following, in order of importance, to be the prime factors in influencing their insurance buying decision: cost, ease, speed and finally, peace of mind that everything is covered.
Where cost is involved, what many people do not know, is that Business Insurance Brokers actually receive preferential rates from insurance underwriters. Better rates, than those you are likely to receive when going directly to the underwriter. Why? Because when you go to a Business Insurance Broker, they have the time to consult with you on your specific business needs, so that they can then advise you on which policy is best suited to your business. As professionally trained, experienced people, Business Insurance Brokers are more likely to consider all of the eventualities that may befall your business when helping you choose a policy; this results in lower risk policies that still allow for a premium income. What's more, the Business Insurance Broker then takes responsibility for nurturing and maintaining the business relationship with the client whilst performing the role of a salesman, all of which is effort that the underwriter does not need to expend.
This ties in with the second most critical factor, ease. When assessing your business insurance policies, an experienced Business Insurance Broker can quickly identify areas where cover may need to be changed or improved. Where a lasting relationship is in place, these changes can all be handled quickly by the broker as they have greater knowledge of you and your business. If you go direct, the onus is on the buyer to know exactly what they want. The results of the research suggest that dealing with a Business Insurance Broker was much easier overall, where brokers were more proactive in communicating and following up on correspondence, where many direct enquiries to an underwriter were either forgotten or poorly managed. Why does this happen? Underwriters receive thousands of enquiries a day as a result of their marketing activity, business insurance brokers however emphasise a more personal service and have more time do deal with policy modifications and amendments.
Speed, the third most critical factor, was balanced. Online, direct insurance calculators often provided a swift quote, whereas brokers often took a little longer to provide personalised, follow up correspondence. Later on however, where policy holders wished to make adjustments to their cover, business insurance brokers were able to quickly make adjustments as they already had a clear picture of what the business required; whereas people who bought direct were usually required to submit lengthy paperwork and often found themselves caught up in loops at call centres, talking to people who had very little knowledge of insurance.
Where Business Insurance Brokers really shone however, was in their market knowledge and their ability to give clients 'peace of mind that everything is covered'. As it is in their interest to know the coverage of policies inside and out, they were far more efficient at cross checking policies and creating custom wordings to suit businesses' specific needs. Whereas the customer buying direct from the underwriter, had little knowledge and thus 'peace of mind that everything's covered' did not come easily to them; underwriters still rely too heavily on customers doing the research themselves.
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