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FCA Report Aims to Disrupt Insurance Inertia

9th October 2019
Paul Graham Managing Director H&H Insurance Brokers

Last week the Financial Conduct Authority (FCA), reported several remedies to tackle concerns about ’dual pricing’ in the insurance market.  The FCA describe ‘dual pricing’ as insurance companies offering new customers policies at a discount, but existing customers are paying more for a similar policy; which means that a loyal and existing customer ends up paying more.  However Paul Graham, Managing Director is keen to clarify that as an independent insurance broker, working for and on behalf of businesses across the agricultural sectors, rather than an insurance company, its single most important aim is to ensure that each customer gets the right insurance cover at the most competitive price.

Paul re-iterates that as brokers they work for the customer and would not let an increase in premiums apply without good cause: “We already acknowledge advice from the FCA and ensure our clients receive the very best insurance cover and price whether they are new to us or have been with us for several years.”

Paul explains that it is firstly important to understand the difference between an insurance company and an insurance broker. With an insurance company, the consumer is dealing directly with one firm who only offer their own insurance products.  An insurance brokerage works very differently in that the customer deals directly with their dedicated professional insurance adviser who is not limited to a single insurer  As such, we access the whole market to find the right insurance policies for you; and can offer much more bespoke and specialist services tailored to each individual business:

“That’s where a farming and rural specialist can assist in identifying the right products and services for an individual’s needs.   I would like to dispel the myth that this may cost you more when actually it could cost significantly less as they are experts in the field.

 “The agricultural sector often needs a tailored approach and usually specialist cover and working patterns can often prohibit farmers completing research themselves – this is our job. As a specialist broker for the rural and farming community we have access to a huge range of specialist insurance products and services designed specifically for this sector.”

Paul adds: “We talk to our clients and develop relationships with them so that they avoid insurance inertia. As with other financial service professionals such as accountants or financial advisors, we work for our clients to give them the right advice and protection.

“Many insurance companies don’t reward loyalty but the opposite.  Only new customers seem to get the better deals, and this is just not right on principle or customer service.  Many clients who switch or negotiate their premium may get a cheaper policy, but this relies on them having the time, and often more importantly, the knowledge to ensure their policy still offers the right protection.”

As brokers the onus is on us and our team to do that – it is part of our customer service promise.

Paul adds: “I believe the majority of the issues seen are due to clients dealing directly with insurers, who have over 60% of the rural and agricultural marketplace.  No matter how large or established they are, if you deal directly with the insurer, there is always a downside. We are not as big as these insurers, so we work harder to look after our clients, all of whom matter to us and are not just a number.

“We are proud to say we have customers who come back year on year because they know things change.  It’s about assessing the current need – and we as brokers have a series of questions that uncover the finer facts of the situation.

“So when you are discussing your insurance to make sure that you are not over or under insured the questions you need to be being asked are:-

  • Has the business changed due to growth or down-sizing?
  • Has anything been added or taken away from the business?
  • Has your claims history improved or declined?

The next and very important stage is looking at the cost. If nothing has changed but the cost, the first question to address is why?  We don’t like cost increases so will look into getting a better price.”

Paul concludes: “I personally believe that the response from the FCA is very welcome news for the rural and farming sectors, there is no reason in this day and age that they should accept a standard, over-priced policy when there are so many options out there.  We encourage any agricultural business owners who are going direct for their insurance needs, to plan ahead. They should take time in advance of their annual renewal point. They may be pleasantly surprised and make a significant difference to protecting their livelihoods.”

H&H Insurance Brokers is one of the UK’s leading rural insurance brokers operating across the North of England, Southern Scotland and Wales, which works to identify the right cover at the right price for its diverse range of customers.