special report / brokers on insurers

Transcription

1 special report / brokers on insurers 14 july 2013

2 INSURANCEBUSINESSONLINE.com.au Australia s best insurer revealed Insurance Business is delighted to present the inaugural Brokers on Insurers report the first of its kind in the insurance industry. Read on to find out which company is Australia s Insurer of the Year The inaugural Brokers on Insurers special report is an industry-first survey that canvassed the people who know insurance best Australia s insurance brokers and asked them to rate the country s major insurers on 11 critical aspects of insurers service. We then collated the results and the insurer that ranked the best across all categories was presented with the inaugural Insurer of the Year award. We had a tremendous response to the survey, with 342 respondents taking part, representing brokers from all over Australia and from all areas of the industry. Thanks to all the brokers who took time out of their busy schedules to cast their votes in this year s survey. Turn over to see how the insurers fared and find out who is Australia s Insurer of the Year. Kevin Eddy Editor, Insurance Business july

3 special report / brokers on insurers methodology Participants were asked to rate the performance of nine of Australia s largest insurers: AIG, Allianz, Calliden, CGU, Chubb, Lumley, QBE, Vero and Zurich. The insurers were rated between one (poor) and five (excellent) over 11 categories: backoffice support, BDM support, brand recognition, commission structure, information provision, interest rates, online platform, overall service, product innovation, product range, premium stability, training and development, and turnaround time. Brokers were also asked to rank the importance of the categories. The scores for each of the insurers were averaged to give the insurer a final score in each category. An overall average was then calculated for each insurer going by its performance in the 11 categories. We also asked Australia s brokers to select their top three insurers in terms of overall perception. As well as scoring the insurers across the aforementioned sections, brokers were also asked a number of questions about how insurers had performed with regard to BDM support, premium stability, service levels and turnaround times. 56 % improved 44 % worsened Brokers speak: turnaround times Turnaround times Claims turnaround times were highlighted by survey respondents as the most important aspect of an insurer s offering. The clear market leader was Chubb. Zurich and Allianz filled out the medal spots. Brokers were quite forgiving of insurers performance on claims, accepting that major natural disasters had put significant pressure on turnaround times. However, several highlighted that the centralisation of claims departments was a concern. Chubb: Allianz: 3.35 Total industry average: 3.19 A lot of insurers are now stating that your claim will not be looked at for at least 10 days. Unless you chase a claim up, nothing will happen to it Centralisation has caused problems: people don t know the products any more Turnaround times have slowed due to natural disasters, but I do get annoyed when you have an old claim put back because of the newer claims. The insured should not be pushed back. Maybe there should be an attempt to sort the older ones first and then work on the newer claims by a designated team At times you can get a claim paid within 48 hours and then the next one can take 14 days. There seems to be more and more claims being assessed and these take a long time to finalise In my experience they have improved. Fewer follow-ups and less chasing for details and updates, which is great. We can keep our clients in the loop of claim payment progress, because ultimately that s what our clients want! We regularly follow up our claims, and the insurers are more than happy to keep us in the loop and up to date with the progress of the claims. I believe this is constantly improving 16 july 2013

4 INSURANCEBUSINESSONLINE.com.au bdm support brand recognition This was a controversial category, with brokers weighing in heavily on insurers BDM provision. The overall consensus was that the insurers that get BDMs right reap the benefits, especially those whose BDMs have the power and the passion to go the extra mile for brokers. Zurich was the company that drew the most plaudits, followed by Vero and CGU. However, brokers were critical of a perceived loss of authority where BDMs were concerned, especially in relation to influencing underwriting decisions and premium pricing. In the most highly scored category of all, brokers clearly believe that the big beasts of the insurance industry aren t backwards in coming forward where their public profiles are concerned. Allianz was fingered as the most recognisable name, followed by QBE. It s telling that both have highprofile TV ad campaigns on screens at the time of writing. However, while brokers think that insurers are good at getting their brands out, it s also the least important factor of an insurer s offering in their view. Insurers could be better served by investing in improving service levels rather than billboards. 44 % Improved 56 % Worsened CGU: 3.18 Allianz: 4.16 QBE: 4.11 CGU: 3.99 Total industry average: 2.95 Total industry average: 3.37 Brokers speak: BDM support Some insurers have really improved (CGU), some have deteriorated (Allianz), some have remained unchanged, and some are providing consistent excellent support (Chubb, Zurich) A BDM has no authority and is basically free coffee Due to the floods/cyclones backlog that occurred in the back office support, the BD s became a lot more involved in the negotiation of premiums and a lot more hands-on with regards to underwriting and processing Some insurers BDMs continue to build great relationships with brokers while others allow the relationship to disintegrate. This does affect where business is placed and BDMs should be aware of this. BDMs also need to have underwriting authority and not just be a mailbox It s apparent that much of BDMs autonomy has been reduced or removed. We currently appear to be in the worst of times when it comes to getting effective management from BDMs While brokers think that insurers are good at getting their brands out, it s also the least important factor of an insurer s offering in their view There are some great BDMs, there are also some average BDMs. This is no different to five or 10 years ago, but the BDMs nowadays have zero authority to make a decision. Some of them still manage to add value, which is amazing given how much their hands are tied july

5 special report / brokers on insurers back-office support It s not all about the client-facing employees. Zurich took out its second award for the ability of its back-office staff to support brokers. Chubb and Vero were also rated highly. Online platforms A pattern is clearly starting to emerge as Zurich again comes out on top for its online provision. Fellow insurance giants Allianz and Vero filled out the medal positions perhaps a testament to the ability of larger entities to invest more into developing new technology. Even so, brokers didn t seem too impressed with insurers ventures into the digital world overall, with the industry average score only 2.98 out of 5 the third-lowest average score. This suggests that insurers still have plenty of work to do Chubb: Total industry average: Allianz: Training and development Zurich scored a fourth gold medal due to the quality of its broker training and development, with Vero second and CGU and QBE tying for bronze. However, training and development was the most harshly scored of all categories, with an industry average rating of just 2.6 out of 5. It seems brokers don t think very highly of the overall level of development provided by insurers, although this may be mitigated slightly by the fact that they also thought it the least important aspect of an insurer s offering. Total industry average: 2.98 product innovation Another category, another gold for Zurich. New CEO Daniel Fogarty s plans to develop Zurich s product offerings in a number of non-traditional spaces including accident and health, financial, liability and property lines seems to have impressed the broker community, with a significant gap between Zurich and second-placed ties Vero and Chubb. CGU rounds out the medal positions CGU and QBE: 2.76 Total industry average: Vero and Chubb: 3.24 CGU: 3.11 Total industry average: july 2013

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7 special report / brokers on insurers What s most important to brokers? Categories by importance Average rating vs importance rating 6 Importance Average industry rating Turnaround time on claims Overall service level to brokers Premium stability (renewal & new business) BDM support Back-office support Product range Online platforms Product innovation Commission structure Training and development Insurer s brand recognition 1 Back-office support BDM support Commissions/commission structure Insurer s brand recognition Online platforms Overall service level to brokers Premium stability (renewal and new business) Product innovation Product range Training and development Turnaround time on claims It seems that the areas insurers do very well in especially promoting their brands aren t the areas brokers think are important. Brokers were particularly critical of insurers BDM support, which came in at number four on the importance list. There s clearly a disparity here, which suggests there s a strategic gap that needs to be bridged by insurers in general. What s important to brokers? Service, service and price, it seems. Claims turnaround times were the most critical factor to brokers, followed by overall service and then premium stability. Less important were issues like training and development, brand recognition and commissions. It gets really interesting when you compare the overall industry averages for each category with the ratings for each category by importance. Claims turnaround times were the most critical factor to brokers, followed by overall service and then premium stability 20 july 2013

8 INSURANCEBUSINESSONLINE.com.au overall service Zurich takes gold in this category too. Vero and Chubb took out the silver and bronze positions respectively. It s possible that Zurich s broker-only model works to its advantage here, as its resources are dedicated to supporting brokers. Indeed, the conflict between broker and direct channels was a bugbear that came up in brokers comments in relation to several insurers. This category also saw the widest range between best and worst, with the last-placed insurer scoring only 2.5 out of 5. This suggests that, while brokers are prepared to reward good service, they re merciless when it comes to bad service. Commission structure Zurich comes out on top yet again where commissions are concerned, thanks to its Zenith program. CGU was also rated highly for its commission structure, while Allianz and Vero tied for third place CGU: 3.39 Allianz and 3.38 Total industry average: Brokers speak: overall service Chubb: 3.18 Total industry average: % Improved 57 % Worsened Zurich comes out on top yet again where commissions are concerned, thanks to its Zenith program It s a mixed bag, and not nearly as efficient as insurers should be. Most underwriters are rarified beings who never talk to brokers but rather let junior staff run around as go-betweens I feel that insurers have finally started to see how important brokers are to them, due to the poor public image of insurance companies. They see how brokers are their customers first contact and some situations can be defused before getting through to us Insurance companies are spending millions of dollars to go direct and bypass brokers. They just haven t got the guts to tell us that they re going to do that Insurers employees are tired! They have been hammered as much as we have and a lot of good staff have left or are going. Look after your staff and they will look after you From a broker s perspective, more online control means that we are getting quicker turnaround times for our enquiries july

9 special report / brokers on insurers product range QBE becomes one of only three insurers to break Zurich s stranglehold on the top spot, thanks to its extensive product range. In fact, Zurich doesn t even feature in the top three, with CGU and Vero claiming the lower medal positions. Premium stability Last, but definitely not least, of the subsidiary categories, premium stability was highlighted as one of the most important areas for insurers to get right. It also sparked the most debate among brokers, with seemingly unjustified premium hikes causing consternation for many respondents. It s clear that Zurich is again getting it right, as it takes out the top position for the eighth time. The equally familiar names of Chubb, CGU and Allianz round out the silver and bronze spots. QBE: 3.66 CGU: Total industry average: 3.26 QBE becomes one of only three insurers to break Zurich s stranglehold on the top spot, thanks to its extensive product range 58 % Worsened 42 % Improved Brokers speak: premium stability 3.4 Chubb: 3.18 CGU and Allianz: 3.09 Total industry average: 3 The implementation of flood cover to household policies created a lot more work to give the client a product with a reasonable premium. We are now starting to see some stability as the bugs have been ironed out in most insurers systems All brokers want is a consistent approach. Unfortunately, at the moment it is like a seismograph with the premium fluctuations As usual, some insurers are adjusting their prices whilst others are aggressively seeking new business. They will all have their turns during their cycle to do either of these things Premiums are pretty stable. If it does increase, you can go back to the insurer to ask for a reduction and generally you will receive one Some insurers have been great. However, there is one insurer which has increased premiums 10 20% across the board. I have moved every one of these renewals as this is not acceptable Weather events have produced some unholy increases to make up for years of underpricing. Affordability is going to be a national issue in the next 12 months 22 july 2013

10 INSURANCEBUSINESSONLINE.com.au Broker picks: the market perception test INSURER OF THE YEAR As well as obtaining detailed ranking information, Insurance Business also wanted to get a sense of overall market sentiment essentially, brokers gut feel about insurers. Therefore, we included a question at the end of the survey asking brokers to list their top three insurers in terms of market perception as of April May So, which insurer came out as brokers favoured choice? It may come as no surprise that the three insurers who scored highly in our formal rankings also benefit from brokers goodwill, with Zurich leading the way. It looks like the big beasts are clearly dominating the market across the board at least for now. Rank Gold Silver Bronze Bank Zurich Vero Allianz 3.28 It s the moment you ve all been waiting for. Insurance Business is delighted to announce that Zurich is the inaugural Insurer of the Year. From the moment the ratings started to flow in, it was clear that one insurer was head and shoulders above the rest. Coming first in eight categories out of the possible 11, and second in a further category, it s clear that Zurich s broker-only distribution model pays dividends with Australia s insurance brokers. Congratulations also go to silver medallist Vero, which appeared in the top three in no less than eight categories and to joint bronze medallists Allianz and CGU From the moment the ratings started to flow in, it was clear that one insurer was head and shoulders above the rest Allianz and CGU: 3.24 july

11 special report / brokers on insurers A word from the winner Zurich general insurance CEO Daniel Fogarty is delighted with the company s win, saying that Zurich will continue to work hard for brokers. I m very excited about these results. They show that brokers appreciate what we re doing. They are rewarding us with more business, but we know we have more to do. Gaining an insight into what matters to brokers is highly valued by Zurich. As an intermediated insurer, we spend all our energy focused on how to better serve brokers and their clients, he says. To receive gold over eight of 11 categories and silver in the ninth is a reflection of the value we place on broker relationships. Fogarty adds that Zurich will continue to work hard in product and service innovation. The strong support we receive through z.streamxpress, XpressQuote and other platforms tells us we re on the right track. We ve streamlined our underwriting process across all lines so underwriters can spend more time developing the right customer solutions with brokers. We are investing in our marine business on z.streamxpress, and in bringing the full benefit of Zurich s capabilities as the world s largest underwriter of marine cargo. Zurich will also continue to be a champion for brokers. The critical nature of insurance means it warrants the best professional advice, so we ll keep enhancing our broker development forums like Generation Z, and bringing Zurich s global knowledge to supplement our local experience. And we ll always champion the value of insurance, not just to business and the community but also as a rewarding career. I d like to thank all brokers who voted for Zurich. We value you and will continue to work hard with you for the benefit of your customers and to stay the best insurer for brokers. I d like to thank all brokers who voted for Zurich. We value you and will continue to work hard with you Daniel Fogarty, CEO of Zurich 24 july 2013

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