At Heavy Commercial Vehicle Underwriting Managers (HCV) we are very fortunate, as our brokers continue to keep us honest. By this I mean that we have never been selected purely on the quality of our products, but also on the quality and integrity of our service. In other words, we live and die by how good or bad our service is to our supporting brokers.
It is important to note that as an underwriter we wouldn't want it any differently than to be measured by these qualities. It is for this reason that our clients are very lucky to have some of the quality brokers who represent HCV. They get impartial advice from brokers who support both their clients and HCV.
Too many brokers are reps
However, in my opinion there are still a lot of brokers who are more representatives for a specific underwriter or insurer rather than being true impartial brokers. They are exactly that, "representatives" not brokers. Unfortunately, this is dangerous territory for the industry, firstly, because it is not part of the compliant broker's mandate, and secondly, it could result in clients tending to go direct if they find that brokers have not been impartial and transparent.
There should be no problems if brokers disclose information correctly and I urge supporting brokers to concentrate on the following:
- The current market is rather spongy on rates, which makes it difficult for brokers and clients to understand what they're getting for the premium they pay. Another reason why HCV brokers are exceptional, they don't get admin fees or incentives. In essence, they can walk tall because they are truly independent. Too many brokers out there, in my opinion, cannot stand up and be counted on this.
- Also, there are too many policies that have "add ons" - those extras that add substantially to the premium cost. Brokers and clients who attempt to compare policies will find a lot of hidden costs in these "extras".
Clients I urge you to concentrate on the following:
- Ensure that your broker brings you the actual underwriter's schedules and ask the hard questions:
Is there an arrangement with the underwriter and are there fees for doing the administration?
Is there an arrangement with the underwriter to do the claims administration?
Check the rands and debit order? Understand the soft issues and actual deductions.
Prepare a dummy claim and do a walk through. Go through how a claim will work or not. There is nothing like a trial run to see how wrong or accurate your expectations are. It's like doing a "fire drill" on a claim, the broker should be in a position to explain the excesses and any other deductions, which means that there will be no shock should an event occur (and hopefully it doesn't).
- We always recommend a biannual review of the policy, the values and an overview of any changes. Vehicles that have been sold, written-off or acquired can often slip under the radar and remain on cover with old information.
To conclude, brokers vary in quality, independence and, therefore, allegiances to underwriters. In my opinion it is the client who needs to make a note of the basic issues that need to be addressed in the most important part of a new policy. That is the presentation by the broker of the comparative quotes and thereafter the comparison of these quotes and the advantages and disadvantages of each underwriter.
