In order of importance, these are the things people said matter to them while shopping for insurance:
- Peace of mind that everything is covered.
- Security of personal data.
So let’s now analyze these items and let our panel judge how each performs when insurance is bought directly or with a broker.
Contrary to popular consumer belief we found that broker pricing was actually better than direct insurance pricing.
The reason for this seems to be principally due to insurers providing different rates to brokers, in order that premiums are lower. Why would insurers provide special broker pricing? Simple: because the risk is lower for the insurer. Brokers are professionally trained to choose the right policy for their customers, and not to under insure, therefore avoiding unnecessary claims while maintaining the correct premium income.
‘Cutting out the middle man’ it seems, does not save money this time. On the contrary!
Many of the consumers in our test case were surprised here. At least half began our test with the impression that buying policies directly would be the easiest option for them. After trying both, almost all had changed their mind.
Whilst the online experience usually proved more pleasant than the phone, most brokers offered an online service, and were far, far more pro-active after they received the initial quote request from the consumer, often answering queries by personal email or call and helping to reassure customers with a human service. Furthermore, most direct services completely fell down when queries or changes were required that were less common, particularly later in the policy life cycle. Brokers really shone through here.
The results here were quite evenly balanced. In the case of the time taken to generate initial quotation figures, direct services (online) were consistently very quick, while some brokers answered quote requests by personal follow up.
The difference however was somewhat reversed when it came to mid term changes, documentation requests and one off queries. The direct services often fell back to large call centers whose staff had little or no real insurance knowledge. In this areas brokers were more efficient, making suggestions our consumers found highly useful, saving them lots of time.
On balance, the speed at which quotes were produced by the direct services was not significant to our consumers when compared to the speed and efficiency with which brokers generally managed their policies throughout the policy life cycle.
“As long as my broker doesn’t take too long to come back to me, I don’t care. It’s his problem while the clock is ticking, not mine.”
We saw few surprises here. Brokers were largely far more efficient at cross checking policies than consumers, and also very good at educating their customers, explaining what types of cover were available and answering queries.
Direct processes were better than in the past but put too much focus on the consumer to do this work himself/herself to be able to compete with the level of service provided by brokers.
The really good Direct services centered around only covering the low risk policies, and leaving any consumer with non-standard requirements high and dry.
This was a difficult one to test, and fell largely to our technical team. We did however take into account how consumers felt about their data security after using the various services.
In the case of Internet based services, the direct services tended to follow security guidelines marginally better than broker services, mainly due to the size of the organisations involved and lack of good software on the part of some brokers.
On the phone however, we saw a different story. Brokers, being far better equipped to deal with specific insurance questions and used to a human discussion, gave people a stronger feeling that they were in safe hands. The process of securing personal data was much the same as with direct, but the trust conveyed by brokers was better.