His points offer advisers great reasons to include insurance in their conversation.
1. “From 1 Jan, car and home insurers must charge new and existing customers the same”
The ruling to ban price walking is the single biggest change in regulation the industry has seen in years. It’s also the single biggest opportunity for advisers to reclaim vital market share that was lost to price comparison websites.
Intermediaries can now offer home insurance without having to worry about being out manoeuvred by insurers on comparison sites selling policies at a first-year loss, only to significantly raise them in years two, three, four and beyond.
And thanks to the innovation of adviser technology the home insurance application can be seamlessly integrated into the mortgage advice process, giving advisers an easy opportunity to fully advise on policies based on an individual’s needs opposed to just comparing on price.
2. “Rates may change before January, so checking now, while they’re still cheap, is safest – you can switch even if not at renewal”
It’s vitally important that advisers are savvy and watch out for insurance companies who are attempting last-minute land grabs by reducing their new business prices to get additional clients onto their books ahead of the new rulings coming into force. This will, almost certainly, lead to sizeable price hikes next year when new business rates adjust and must be equal to the renewal prices. This is a reputational risk to you, your firm and a customer retention risk.
3. Check for deals comparison sites miss
The FCA’s new rulings will give advisers the opportunity to guarantee fair value and, by intertwining insurance into the home buying process, they can remove a lot of the customer’s hassle of comparing deals through multiple comparison sites. By using their own knowledge of the market, coupled with information on an individual’s needs, advisers can provide invaluable advice and ultimately the policy that has the features the customer really needs, not just the lowest price.
4. The danger of being enticed by cashback and vouchers
If companies are offering cashback, vouchers, or free tickets for signing up it could well be because the product they are offering is simply not up to scratch. The importance needs to be placed on looking at individual policies and whether they specifically meet the end client’s needs, as opposed to what policy comes at the lowest cost or with the highest value voucher.
Fortunately, the new rules also make it practically impossible to incentivise in this way as the value of the voucher has to be calculated in next year’s price. Incentives will only ever be a short-term sweetener which will quickly sour within 12 months.
5. Firms shouldn’t penalise renewals that aren’t three weeks early
In Money Saving Expert’s own research, it’s found that car and home insurance customers can both make savings if they buy early with some insurers.
This means time poor customers, who are typically juggling busy lives and don’t necessarily renew until days before their current policy is up, can be negatively impacted by algorithms that make premiums more expensive.
By using insurance providers with a clear fair pricing strategy, advisers can give their clients the comfort of knowing regardless of when they renew, they will always be offered the best available new business price and won’t be penalised for not renewing weeks in advance.
6. “Ensure the policy is right for you and know your rights if you’re unfairly treated/your claim is rejected”
Or, save your customer from the pain of rejected claims, difficult to cancel, hidden fees and present them with a Defaqto 5* policy that is fairly priced, so both you and your client have full confidence they’re properly protected.
The intermediary market can quote, configure and buy a policy in under 60 seconds or, even better, the customer can complete the purchase from you through self-fulfilment.