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Time to get nasty!

Banks can’t be trusted to sell insurance impartially or professionally and the whole broking community knows it. So why are you all being so bloody polite?

There is a socking great void in the financial services world that used to be filled with boring dependable stuff like honesty, integrity, and trust. Thanks to unprofessional banks these qualities have been leeching out at an alarming rate and leaving behind a vacuum – one that brokers could fill if they could just be bothered.

Want a reason for consumer distrust? Take your pick from any of the headlines on this page.

“Banker bonuses at Lloyds clawed back because profits
produced on back of mis-sold PPI policies”

“Lloyds bank losses mainly attributed to money set aside
to pay compensation for mis-selling PPI”

“Estimated £9 billion set aside by banks to pay compensation
to customers mis-sold PPI policies”

“Barclays General Insurance complaints double in 6 months
to over 120,000”

“Direct Line & Churchill fined £2.7 million for withholding
on client complaints from the FSA”

Where did I get these horrible shoot-yourself-in-the-foot headlines: a quick dredge of the red tops, websites with vested interests? No, I got most from the FSA or authoritative news organisations such as the BBC. Sadly, in this case it is not the bringer of the stories who are sensationalist, it is the stories themselves.

None of the headline-grabbing examples I’ve uncovered relate to insurance brokers. It’s not me exercising a huge dollop if bias. I looked hard but I couldn’t find a broker story that involved systemic mis-selling on an industrial scale or a contemptuous approach to complaint handling, such as the Direct Line example.

If you think marketing is about fair play, think again. Do you remember the strapline when the irritating red phone chirped its way onto our television screens all those years ago? “We cut out the middleman so you get a better deal.”

Direct Line didn’t mention that they spent twice as much on advertising as brokers earned in commission did they? No, the damage was done, consumers believed brokers were an expensive option and the exodus began.

Direct Line didn’t get their market share by taking the deferential approach of a butler – they did it by savaging the broking market’s jugular.

Recently Direct Line received a fine of nearly £3 million for withholding information on customer complaints from the regulator. I haven’t been able to find one broker who used that information to their advantage.

Brokers need to make these organisations pay long after the FSA cheque has been cashed. If ever there was a better time to differentiate brokers from their competitors it is now. At every opportunity you should be stating the bleeding obvious: if you want professional advice speak to an insurance professional: a broker. Not some big corporate junketeer surfing on a tide of taxpayer’s largess: a broker!

Don’t assume consumers will come to this conclusion by themselves – they didn’t think of brokers as expensive middlemen until Direct Line led them that way. You have to tell them. And when I say you, I really do mean you, because I have seen no evidence whatsoever that your representative bodies are doing it on a collective basis.

I found more information on the FSA website about mis-selling than I did on the BIBA site. There’s nothing in the customers section at all. I crawled over some broker network sites too and some of the larger brokers – nothing.

If I were a broker I’d have a “Compensation Counter” on the Home page of my website and every time the FSA updated its figures on compensation payments I’d ratchet it upwards.

Here’s an idea. The FSA recently issued a statement informing the world that they had instructed banks to write to their customers to explain how to claim back compensation on the PPI policies that they had mis-sold to them. How embarrassing is that? It made all the mainstream news bulletins and the front pages of the quality newspapers. What a gift. All that free publicity explaining just how truly awful your competitors are.

In parallel there has been a lot of noise about PPI compensation recovery firms ripping customers off. These two stories are a match made in heaven. Customers get ripped off by banks and then ripped off again when claiming for the first rip off – you can’t make this stuff up. And it’s a whopping great opportunity for brokers to stick the knife in.

It’s easy to make a PPI compensation claim and there are plenty of independent websites that offer free advice. Many provide template letters and useful contact information. Why aren’t you telling your customers about this? Do a fact sheet and put it in with your renewal packs. What a great way to demonstrate your professionalism and at the same time subtly undermine the banks. You’ll also be saving customers money because these compensation companies charge a fortune. Customers don’t forget good service like that.

Here’s another idea if you have a high street site. Put a poster in your window – I’ve laid one out on this page – feel free to nick the words. In fact, I’ll tell you what, if you come up with some better ones I’ll get them made up and send you a couple for free.

Banks are at their lowest point in the consumer psyche and this is not time to stand back and be British about it all. Get nasty, because believe me there will be a time when the banks are strong again and they won’t think twice about attacking your reputation.

This article by We Do The Words Director, Mike Millard, originally appeared in the April 2012 Edition of Insurance People