Vetting your Insurer at the claims stage is akin to realizing you have no airbags in an accident.

Insurance like much in our society is a grudge purchase, your customers/clientele are looking to pay as little as possible while maintaining the best cover for the money.

Like all businesses, other factors contribute, such as benefits, service, ability to pay claims, convenience, and functionality. These factors are all on the rise, especially with the insuretech revolution and the implementation of AI technology, however, the core factors, for now, remain cover and pricing. These factors are taken into consideration when your insurer does their analysis in terms of cover, pricing, excesses, and benefits. The list of analytical data used is exhaustive and includes the most marginal information that could affect the business model.

As with the majority of insurance companies, a large part of the consideration is the number of clientele, premium income, and operational costs, and thus begins the balancing act of cross-subsidization, and the concepts like Equity vs Equality are applied unilaterally.

Equality means each individual or group of people is given the same resources/opportunities/treatment.

Equity recognizes that each person has different circumstances and allocates the exact resources/opportunities and treatment needed to reach an equal outcome.

The outcome, in this case, is an overall positive income vs claims paid ratio. Findings indicate that different risks and clients with differing loss ratios pay different premiums. As a rule, insurers are mindful of their customer’s loss ratios and are quick to address high frequency/high quantum claimants, thus attempting to correct a “negative” or “bad” customer loss ratio.

The concept of applying corrective measures to re-dress these high frequency/quantum losses in these situations is accepted as a normative rule, however, where the problem transpires is that the same compensatory measures are not applied to the “positive” or “good” loss ratio clients.

In many of these cases, even the “positive” or “good” loss ratio clients face yearly increases in the premiums (attributed to inflation, increase in the cost of service/parts, fuel price hikes), with no actual increase in benefits or cover aside from their buildings and contents sum insured being altered to cater for inflation.

Clients are gimmicked into thinking that because their motor premium reduces as the motor vehicle decreases in value that they are being rewarded, however, the current pricing model is retained, and you are not being rewarded for being a desirable client.

Take the right approach and find an insurer that is client-centric, that applies equity and not equality because each person’s situation is unique, and if the most marginal information is used to price products, indeed the most marginal information can be used to underwrite risks.

My 5 TIPS for finding your insurance provider

1.?????Make sure the insurer cares about you, and your clients, and makes sure you understand your covers, wording, and exclusions.

2.?????Make sure you know the industry comparative products available. Often clients are disappointed in their cover or their claims experience, and more often than people care to admit, it’s because there was a lack of understanding from either broker or client’s perspective.

3.?????Make sure your Insurer takes into consideration your client’s specific conditions and circumstances, remember this is a two-way street, just as much as you are trying to understand if their cover is best suited for your client, they should be trying to understand the risk that they will be insuring.

4.?????Don’t be afraid to approach the market for suitable replacement products from reputable insurers. Customer/broker loyalty is earned; just as much as you serve your clients, your insurer needs to serve you and your clients.

5.?????Don’t wait till the claims stage to do your homework/research on your insurance company