Why MP Jonathan Evans backs brokers 2013

Transcription

Issue 2
May 2013
www.biba.org.uk
Broker
The
Why MP
Jonathan Evans
backs brokers
Raising awareness in
Westminster
The British Insurance Brokers’ Association
Signposting –
one year on
What we’ve
achieved and
where we’re
going
Fighting for
a fairer FSCS
deal
How we’re
increasing the
pressure
2013 CONFERENCE SPECIAL
Meeting the Growth Challenge
Preview of the must-attend event for brokers
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ADVERT
WE SEE WHAT OTHERS MISS
Contents
Conference Special – pages 19-30
Welcome
This year’s conference, Meeting the
Growth Challenge, is almost upon
us and I look forward to meeting
members at London’s ExCeL.
It seems there is a real sense of
purpose about attending this year –
the word from many of our regional
chairpeople is that members want to
feel re-energised and this is something
that the conference is able to provide
in abundance. I am going to be
experiencing the conference ‘buzz’
for the first time and can’t wait.
Check out our conference preview
in this issue and you can also
read commentary from Jonathan
Evans MP, who chairs the All Party
Parliamentary Group on Insurance
and Financial Services, and is a key
contact for us. We are continuing to
work with him on the FSCS campaign
in our ongoing battle to ensure a fairer
deal. We are also expecting Jonathan
to put in an appearance at the
conference too.
In case you are wondering,
I am working as acting head of
communications while Leighann
Forsyth is on maternity leave and is
currently enjoying time at home with
new daughter, Evie Rose.
Meanwhile, please do see me
as your primary contact for any
communications or media-related
issues.
16
COVER STORY
Reporting from Westminster
Insight on key issues affecting brokers from Jonathan
Evans MP, chair of the All Party Parliamentary Group
on Insurance and Financial Services
32
Group BIBA
19
Our groundbreaking initiative could be expanded
to help young drivers in addition to helping older
customers, as Graeme Trudgill explains
FSCS – the fight goes on
We will continue campaigning hard to ensure
members pay a proportionate levy towards the
compensation fund – here is the work we have done
on your behalf so far
COnference special
Member Helpline:
0844 77 00 266
BIBAbroker
Signposting –
reaching a wider audience
34
Andy Thornley
Communications Manager
@BIBAbroker
SPECIAL FEATURE
21 Introduction
The inside story on the biggest event in the
broking calendar from conference organiser
Lindsay Campbell plus full programme details
23 Regional viewpoints
Why members from across the UK will be
coming to London
24 Exhibition plan
Check out who’s going to be on show
26 Industry Q&A
Insurers who will be meeting the growth
challenge
Regulars
05 CEO update
New Chief Executive Steve White sets
out his vision to lead BIBA
06 Member news
The latest from BIBA HQ and regional
dates for your diary
09 Media news
BIBA’s latest press coverage from
nationals and trades
10 Technical news
An update on the Consumer
Insurance Act from Steve Foulsham
and why brokers should ensure they
understand the implications of this
new law
13 Regulation news
Vannessa Young looks at new FCA
guidance on financial incentives and
a full listing of compliance forums
taking place in your region
36Comment
Former Chief Executive Eric Galbraith
says farewell to members and looks
back over 10 years in the role
39 Schemes focus
Steve Foulsham has the latest on SME
and commercial combined, before the
event and credit insurance sectors
43Representation
All the action from BIBA’s recent
parliamentary reception at the House
of Commons
46 Professional indemnity
Meet our new panel member
While every care has been taken in the compilation of this magazine, errors or omissions are not the responsibility of the publishers or editorial staff. © All
rights reserved. Products and services advertised within The Broker do not carry endorsement or recommendation by BIBA. The BIBA logo is added free
by request to members’ advertisements. It warrants or signifies nothing more than the advertiser is a member. The views expressed in the articles within
The Broker are those of the authors alone. They do not represent the views or opinions of BIBA.
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03 ISSUE 2 / 2013 www.BIBA.org.uk
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CEO UPDATE
Ready to
Steve White, BIBA’s new Chief Executive,
outlines his thoughts on the opportunities and
challenges ahead now he’s taken the helm
It’s difficult to put into words just how much it means to me to become
BIBA’s Chief Executive, I feel both privileged and positive about steering
this outstanding association.
My appointment was decided at the same time as the Papal conclave took
place and I have to say, at times it felt the process was just as rigorous – the
net was cast wide and it was several months before the white smoke came.
Many of you of course will know me personally, perhaps either through
meetings at BIBA, or from the many compliance forums I’ve attended
across the UK.
I have spent over 35 years in the insurance industry, including time
working at the Financial Services Authority dealing with regulation of
insurers, prior to joining BIBA.
Now, my remit has widened considerably from my previous role as
Head of Compliance and Training. There’s no doubt that my regulatory
background will be a help, as this remains the issue of biggest concern
for members. But, my focus now is on leading BIBA to achieve even more
across the board in the years ahead. Our influence has already grown
as, I believe, has understanding of how much brokers can help their
customers.
On my agenda:
1
2
3
Working with government
Whether it’s young drivers, car sharing, flooding, business
continuity, ELTO, or even what an independent Scotland would
mean in insurance terms, government now see BIBA as a primary
source for guidance. This helps us to be influential in promoting
brokers and the value they can bring to their customers.
Europe
What happens in Europe affects us all – something we’re all
now even more aware of. As a European Federation of Insurance
Intermediaries (BIPAR) Director, I’ve been fortunate enough to
gain the contacts and understanding to ensure the rights of UK
brokers receive a fair hearing.
BIBA regions
I want to stress to members now that the regions are our lifeblood.
We’ll continue to increase the amount of face-to-face activity and if
I can give one final message, it’s that I want to see all members gain
the full benefits of membership – and that means getting involved.
BIBA is doing better than ever, but your input truly matters. So, join
in, work with us and play an active role.
TOUGH ACT TO FOLLOW
Certainly Eric Galbraith will be a tough act to follow and has raised the
bar considerably. He has been here a decade and I joined nine years ago,
so tapping into his expertise over time has been enormously useful – and
indeed, although he is leaving, we’ll no doubt welcome his counsel on a
consultative basis.
Eric has also built a terrific team and I’m delighted Head of Corporate
Affairs, Graeme Trudgill, will now be joining the main BIBA board as
Executive Director – few have his outstanding knowledge and tenacity.
His ability to think on his feet and to turn a difficult question into a way to
promote brokers in the media is second to none.
Although Eric leaves BIBA in a strong position, there is no doubt we are
all going to be working incredibly hard. Members have never faced such
harsh trading conditions and increasing regulatory costs.
We need to accept things are going to remain extremely difficult for some
time to come and so BIBA must focus on areas we can change.
To ensure we are as effective as possible, work on our Strategic Review is
well advanced and you can read more about this on page 6.
We’ll also be providing an update on this at the BIBA Conference in May
– and it goes without saying that I’m looking forward to seeing as many of
you as possible at the London ExCeL.
Steve White, BIBA Chief Executive
the broker ISSUE 2 / 2013 05
news
Be part of the change
Members are being called on to play a key role in
shaping BIBA’s Strategic Review
Members’ feedback will be crucial in
ensuring BIBA is a trade association for
the 21st century, which is the aim of our
ongoing Strategic Review.
An update on the Strategic Review will
be provided at conference and we have
also sought to keep members fully up to
speed on progress – we have held some 13
presentations around the regions to date.
The review is based around six
workstreams all relating to how BIBA can
provide optimum value and achieve most
for its members. The workstreams are:
l Board governance
l Executive team and resources
l Segmentation of members
l ‘One voice’ (namely how BIBA can best
speak for all brokers)
l Commercial activities (such as schemes)
l Code of conduct
The workstreams are being overseen by
a steering group chaired by Andy Homer
and comprising other board members
Brendan McManus, Bob Pybus and Steve
White, with BIBA’s Vannessa Young acting
as project manager.
Chairman Andy Homer said: “This
review is fundamentally important to
BIBA and even more so, its members. We
have been speaking to you about the work
over the past months and there is strong
interest from around the regions. The
recommendations are now in and we want
to gauge your reactions. Make sure you
play your part – we are listening and will
take appropriate action.”
The six workstreams submitted their
recommendations to the board for
31 March and the board is now assessing
these workstreams and looking to make
The workstreams in detail
Board governance
Key issues under consideration:
1 Board structure – its size and constitution
2 Whether advisory boards should be used
3 Regional committees – their size, constitution
and structure
4 Technical committees – their role and
composition.
BIBA’s executive team
Examination of where resources need
strengthening, focusing on areas such as
lobbying, public affairs and regulation.
Segmentation
A review of member segmentation where we
will look to improve:
Member engagement and focus
Holding better quality data
The fee structure
Membership eligibility and the overall
proposition.
Commercial activities
We will review BIBA’s Commercial activities to
improve on an open, transparent and fair basis,
whilst ensuring that we continue to deliver
value for money to BIBA members.
‘One voice’
Assessing the best ways to unify the voice of
the broker. Our aim is to achieve this among
a wide range of stakeholders and to present
membership with consistent messaging across
the industry and to improve BIBA’s standing
with governments in Europe and internationally.
Code of conduct
We will explore the feasibility of having a
mandatory code of conduct for brokers, given
that there is a strong case for BIBA to play
a more active role in raising industry
standards.
Meet our Board members at Conference on Stand B55 at the following times:
WEDNESDAY 15 MAY
Times
Work Stream
Chair Person
11:35 – 12:30
Board governance
David Perry
11:35 – 12:30
Strengthening executive team Neil Thornton
13:00 – 14:00
Segmentation of members
Brendan McManus
15:00 – 16:00
One voice
Kevin Hancock
THURSDAY 16 MAY
14:00 – 15:00
Commercial activities
Alec Finch
15:00 – 16:00
Code of conduct
Robert Pybus
06 ISSUE 2 / 2013 www.biba.org.uk
final recommendations in the coming
weeks.
The review covers almost every aspect of
BIBA’s functions and once implemented,
it will result in a formal new structure.
Lawyers DAC Beachcroft are already
working with us to change, amend and
write new articles of association and we
will also hold an extraordinary general
meeting.
We will be setting up a consultation
period after the conference in which
the recommendations are considered
by members. We will also be looking to
survey members over the coming months
about the recommendations.
A questionnaire will be available at the
BIBA stand at conference where we can
obtain more opinions from members.
Telematics
good practice
guide
B
IBA and the Association of British
Insurers have drafted a good practice
guide for the use of telematics in motor
insurance. The voluntary guidance sets out the
high-level actions that insurers and brokers
should take to ensure that customers both trust
and understand the role of telematics, and to
ensure that they comply with relevant laws and
regulations affecting it.
Telematics uses technology which monitors
driving behaviour, time of day that the vehicle
is driven and the type roads used – which is
combined with traditional risk measures such
as age and location to help build a better risk
profile of each driver. Telematics therefore
has the potential to dramatically change the
landscape of motor insurance.
The guidance will be accompanied by a
consumer guide to telematics which helps to
explain to the policyholder what information
may be recorded, how this will be used and
factors of telematics that may affect the price of
their premium.
BIBA’s Executive Director, Graeme Trudgill,
who has been involved in drafting the guidance,
said: “This guidance is important to help
insurers and brokers understand compliance
issues of using telematics, as well as how they
may help to explain it to their policyholders.
“The accompanying consumer guide can
also be used as a tool to further help the
policyholder to understand how this affects
them and how they can reap the benefits of this
exciting new development in motor insurance.”
The guide is now available on the
BIBA website.
BIBA want to help
facilitate a solution
graeme trudgill,
biba’s executive director
BIBA gives evidence
to Select Committee
BIBA’s Executive Director, Graeme
Trudgill, recently gave evidence on
the future of flood insurance to the
Environment, Food and Rural Affairs
(EFRA) Select Committee as the end of an
agreement on flood insurance provision
draws closer.
The Statement of Principles was an
agreement between Government and
the insurance industry that sought to
ensure that affordable flood cover is made
available, especially to areas of higher
risk. If insurers continued to cover the
highest risk properties, the Government
would ensure that flood defence projects
– where for every £1 spent at least £7 is
saved in claims – would continue to receive
adequate funding.
The statement is due to expire at the
end of June and BIBA have been taking
part in negotiations as to how this may be
succeeded with a better agreement. The
industry has four options currently on the
table – all of which involve BIBA members.
The first option is the Noah UK
Household Flood Reinsurance facility,
involving Marsh, Guy Carpenter and
Munich Re – which is the reinsurance
market supporting the Noah facility. Noah
transfers the residential flood risk to the
reinsurance market and provides cover
that was not previously available under a
catastrophe treaty. Noah would involve a
pricing model that identifies and calculates
the risk of every residential property in the
UK and would ensure that cover would be
always available from insurers protected by
the solution. The government would also
not have to provide any contingent liability
for the cover should an exceptional flood
year like 2007 occur, as the risk would be
flood facts
Over 5 million homes in England and
Wales, or one in every six homes, are at
risk of flooding
Payout for the average flood claim
is £30,000
Approximately £5 billion has been paid
in claims to households and businesses
affected by flooding since 2000
The exceptional flood year of 2007 cost
insurers around £3 billion
covered through re-insurance.
Marsh has also suggested a further
model, Flood Mutual (Mu), which aims to
mutualise the claims over all insurers who
will hold 50% of the risk. This would not
only ensure that flood cover was available,
but also that both the Government and
the policyholder retains some of the risk –
which encourages them to take precautions
against flooding. This solution would
need primary legislation and all insurers
would need to take on some of the highest
risk properties. The insurer could also use
Noah as a means to buy reinsurance for
their risk – combining the two solutions.
The Association of British Insurers have
also suggested a model, Flood-Re, which
aims to build up a flood fund through
levies – similar to the fund the Motor
Insurers’ Bureau handles. The fund could
be used to purchase re-insurance through
Aon Benfield, however the Government
would be required to ‘backstop’ the fund
should there be an exceptional flood
year – requiring primary legislation.
Nevertheless, the model does have
widespread support from insurers and
enables them to remove all UK flood risk
exposure from their balance sheets.
The final industry option is that flood
insurance goes to the open market. If
this happens, BIBA are calling on the
Government to put in place a ‘signposting’
agreement – similar to that already in place
for older motorists and holidaymakers,
where if an insurer or broker is not able
to offer cover, they are signposted to
somebody who is able to help – such as
BIBA’s ‘Find a Broker’ service.
Graeme said: “BIBA want to help
facilitate a solution. Many brokers
already offer specialist flood cover and
BIBA thinks that signposting can play a
very important part in any open market
situation as widespread access to flood
insurance would drive a market price to an
appropriate level.
“BIBA do not suggest any one model
over another; however, as all of them
involve BIBA members, we were pleased to
be able to offer the select Committee our
views on the benefits of all of them.
“We look forward to hearing their
response to the evidence and are interested
in how our members may be able to
contribute to a lasting solution.”
REGIONAL dates
for your diary
07 MAY
West Midlands
Golf Day 07 MAY
East Midlands
Golf Day 08 MAY
Anglia/East MIdlands
Lloyd’s visit
05 JUNE
Yorkshire & Northern
5-A-Side Football Tournament
05 JUNE
Merseyside & West Cheshire
Scheme Providers Roadshow
11 JUNE
Northern Region
Lloyd’s visit
21 JUNE
South East
Golf Day
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Promotion
Steve White’s appointment as BIBA’s new Chief Executive
has been welcomed in a range of insurance publications. Andy
Thornley looks at some of the coverage
After an extensive search, BIBA’s new
Chief Executive is an internal appointment in
Steve White, formerly Head of Compliance
and Training – and the trade press has been
widely supportive.
Insurance Age spoke to a range of brokers
about what Steve should focus on now he is
in the role. Ian Gosden, Managing Director
at Higos, commented: “Steve has done a
cracking job on compliance and in the west
of England he certainly keeps us informed.
He is certainly very much BIBA through
and through.”
He also highlighted the challenges
ahead: “I personally want to see BIBA
representing brokers more and promoting
professionalism. On the professionalism side
Steve is very much on board as a driver of
quality through professionalism. He is a good
guy for the job.”
Ed Finch, Managing Director at MRIB,
said: “The new CEO has to be front and
centre of making the industry more
transparent and attacking the issues that
concern us, from flood to whiplash, to poor
insurer service, to dual pricing. He has my
full support and I look forward to seeing his
game plan but there needs to be a lot more
momentum coming from BIBA to be the
face of the broking industry.”
Post magazine reported that broking
CEOs including Oval’s Peter Blanc, Bluefin’s
Stuart Reid and Giles’s Brendan McManus –
who is also BIBA’s Deputy Chairman and
part of the CEO selection committee –
praised Steve’s understanding of the
intricacies in the introduction of the Financial
Conduct Authority.
Post also ran its View from the Top from
Brendan McManus who wrote: “Steve’s
agenda will be an exacting one, as rarely has
there been so much drive for change at BIBA,
which is slap bang in the middle of the most
extensive Strategic Review since its creation.
The timing couldn’t be better for Steve to
make sure the review really delivers a BIBA
that is recognised by all its members as truly
representing their interests. “I’m calling for all brokers to get behind
Steve in his new role and support the
Strategic Review by ensuring there is
feedback on the proposals, so that when it’s
finished everyone has played their part.”
Insurance Times spoke to departing Chief
Executive Eric Galbraith, who said: “To have a
current BIBA executive to be my successor –
an internal promotion in other words – is great
news. Steve really cares about BIBA and how
we get better in representing members. It is a
pleasure to hand over the reins to him.”
press watch
Why brokers are claims champions
A report published in January by the British
Insurance Brokers’ Association (BIBA) asserts
that the economic challenges and the rise
in fraud is forcing insurers to take an even
finer toothcomb to claims, with two thirds of
brokers confirming they had to work harder
to get claims paid and three quarters stating
they had helped to overturn a rejected claim in
the past year.
BIBA’s survey revealed nearly 70 per
cent of brokers secured a higher payout for
a client when they intervened, with 43 per
cent suggesting they could negotiate an
improvement of between 11 and 20%.
Moneywise, April 2013
Significant savings from telematics
The British Insurance Brokers’ Association
says telematics policies can knock 30 per cent
off the cost, and some insurers claim savings
can be as high as 70 per cent.
The Mail on Sunday, 24 February 2013
Females foot higher car insurance bills
Young women used to benefit from lower
premiums, as they tend to make lower value
claims than young men. The British Insurance
Brokers’ Association suggested that premiums
for young women should increase by
almost 40%.
Which, March 2013
Signposting to the rescue
Insurers are not obliged to provide cover
for customers of all ages but an agreement
between the government and trade bodies
the British Insurance Brokers’ Association
(BIBA) and the Association of British Insurers
is supposed to ensure that elderly drivers who
are turned down for cover because of their
age are pointed to brokers who can help
arrange insurance.
Graeme Trudgill, Executive Director at
BIBA, said: “Since the agreement started in
April last year we have helped 40,000 older
people find insurance.”
This is Money, 26 March 2013
technical News
Asking the right
questions…
The Consumer Insurance (Disclosure
and Representations) Act 2012 came
into effect this April and brings
important changes which brokers
need to be aware of.
For several months now, I’ve
received upwards of 10 queries a day
from members who want guidance on
this new law.
Brokers should ensure they are
aware of any new question sets, which
have been provided to them by
insurers. This could be for new
point-of-sale documentation, online
and paper proposal forms, websites
and call scripts.
If you operate delegated authority
schemes in particular, make sure you
have been fully briefed by
underwriters on any changes. It is
reasonable to expect staff training to
be provided if these are significant –
and it also makes sense for brokers
to brief their staff on the Act and
its implications.
If they have issues on which they are
not clear, then they should contact the
insurer immediately, and if you have
problems, speak to us at BIBA.
There is also information available
on the Law Commission website.
Consumer Insurance Act –
Q&A
Q What is the purpose of
the new Act?
A The Act replaces the Marine
Insurance Act 1906 and places the
onus on the insurers – and brokers
– to ask consumers the right
questions during the application and
renewal process.
In simple terms, the Act is about
ensuring more fairness for consumers,
as over the years, there have been
many cases where information has not
been disclosed for innocent reasons
and claims rejected. Brokers and the
Ombudsman will be well aware of
examples – and insurers have known
for several years that change was
Members are seeking guidance on the
new Consumer Insurance Act and as
Steve Foulsham advises, it is wise
to be informed, since it may place
additional obligations on brokers
coming. They have largely accepted
this and as such, there has not been
a ‘chorus of disapproval’ about
the changes.
Importantly, consumers no longer
need to volunteer material facts when
they are applying for or renewing an
insurance policy. This is replaced with
a duty to take reasonable care not to
make a misrepresentation.
Q Is only personal lines affected?
A Brokers should also ensure they
are making a clear differentiation
between commercial and consumer
clients and may need to introduce
separate terms of business if they
have not already done so.
It defines this as insurance bought
by individuals “wholly or mainly for
purposes unrelated to their trade,
business or profession”. This wording
is intended to be broad enough to
include “mixed-use” contracts, which
cover both private and business use, as
long as the main purpose of the
contract is for private use.
Under this definition, private motor
vehicle cover that included a limited
amount of business use would be
treated as consumer insurance,
whereas a policy insuring a taxi but
which covered occasional private use
would not.
Q Will the Act lead to a rise in
premiums?
A The Act is going to mean more
claims are paid – and it also
introduces so-called ‘remedies’.
These are too detailed to be listed
here, but basically, they mean if a
customer has failed to provide
information that perhaps impacts on
whether a claim is valid, then the
insurer must agree a solution – or
remedy. For example, this could
mean that a proportion of the claim is
paid or perhaps that premiums are
refunded, but the policy is voided.
For life and protection insurance,
the Law Commission estimates this
increase would be in the region of £4.4
million, which is likely to translate into
a premium rate rise of about 0.08%.
For general insurance, the Law
Commission predict increased claims
payments of between £5 million and
£20 million, which would increase
premiums by between 0.025%
and 0.1%.
This is going to mean that insurers
are going to introduce premium rises
to cover this, but as members know, in
the soft market, insurers are going to
find it difficult to get the pricing right.
Q Will it increase risks
for brokers?
A BIBA started an industry debate
when we reported that some insurers
were taking a harder line when it
came to paying claims.
From my own experience, I have
never had so many calls and emails
from brokers saying they are spending
more of their time dealing with
disgruntled claimants.
Insurers clearly do not want to be
paying more claims and we know they
will be looking hard at their
obligations, despite this new Act.
We would not be surprised if brokers
are held to account more by insurers –
they will be looking to see if brokers are
playing their part in asking questions.
This is extremely important when a
policy is taken out. A renewal is, of
course, also a new contract, but,
consumers may not always be aware of
their need to inform the insurer if their
circumstances have changed. It may
make sense to send a copy of the
Statement of Facts with a letter
requesting that the customer inform
the broker of any of the information if it
is incorrect.
The vast majority of brokers will
already have sound practices in place,
but because the landscape following
the Act is somewhat uncertain, now is
not the time to be taking any short cuts.
Steve Foulsham is Head of Technical
Services. He can be contacted at
foulshams@biba.org.uk
ADVERTORIAL
Making an acquisition – tax considerations
for buyers and sellers
Many brokers are looking for ways to increase the size of their operation, either by buying
a book of business or by acquiring an existing broker outright through a share acquisition.
But there are tax pros and cons that are often overlooked. Chris Riley explains.
Acquiring new business is an opportunity to expand and
benefit from economies of scale at a faster rate than by
pure organic growth. There are of course commercial
consequences which will influence how you go about it.
Acquiring a book of business reduces exposure to risks as
you are not liable to issues arising from the past operations
of the target. Acquiring the shares in a company means that
client relations are inherited and may give a higher rate of
retention. But the tax differences of the two alternatives may
also be significant.
Chris Riley is a partner in
Littlejohn’s tax division.
An insurance industry
specialist, he advises
brokers on a range of tax
matters, in particular the
consequences of buying,
selling and restructuring
businesses.
+44 (0)20 7516 2427
criley@littlejohnllp.com
The conflict
In many cases, it’s an unfortunate fact that the option offering
the best tax outcome for the purchaser will be unfavourable to
the vendor, and vice versa.
Based on taxation considerations alone, a purchaser will often
prefer to acquire a book of business. The purchase is treated
for accounting purposes as the acquisition of an intangible
asset which needs to be amortised over its useful life. This
amortisation is allowable for corporation tax, reducing taxable
profits and tax charges in future years. If an intangible asset is
significantly written down (an impairment), this is also an
allowable deduction.
On the acquisition of shares in a business, however, there is
no such allowable expense. An amortisation charge may arise
upon consolidation, but consolidation adjustments are not
recorded in the books of the company so are not allowable for
tax. The cost of acquisition via the share route can only be
applied in the calculation of any future taxable capital gains on
disposal of the same subsidiary. Having said that, such capital
gains are now likely to be exempt because of the substantial
shareholdings exemption.
Taken in conjunction with the major commercial benefit of
being protected from past liabilities incurred under the
previous management, acquiring the book of business
becomes very attractive for the purchaser.
The vendor’s perspective
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For the vendor, the issues are reversed. Selling a client list
gives rise to profits which are taxable on the company. In most
cases, there are no associated costs of initial acquisition, so
disposal proceeds are taxable in full and are left in the
company. To transfer the proceeds to shareholders requires
either a distribution or (most likely where the company is
owned by individuals) a liquidation. If paid to an individual,
these proceeds are taxed a second time, increasing the
overall tax charge.
Compare this to a sale of shares by an individual. This is a
single transaction giving rise to a capital gain, where the
effective rate of tax may be as low as 10% – assuming
entrepreneurs’ relief is available.
For a corporate shareholder, such a gain would be exempt
through the substantial shareholdings exemption. By removing
a layer of taxation (and potentially the whole tax charge on
disposal), this is a much more attractive option for the vendor,
all other things being equal.
Striking a balance
A broker may be prepared to pay more for a book of
business than for shares, in the knowledge that more
immediate tax relief is available. However the vendor may
accept a lower price for the sale of shares if this prevents
a double tax charge.
There will, of course, be other specific circumstances
to consider in either case. Acquiring a book of business
may well give rise to a tax deduction for the purchaser but
is the potential reduction in profits of genuine value? The
long-term business plan of the purchaser may also impact
the decision, as tax relief today could unwind on a future sale.
A vendor concerned about a tax charge arising on disposal
of a book of business may do so unnecessarily if other reliefs
are available.
If you are in discussions to buy or sell a business, you need to
be aware of its potential effects as early as possible to be able
to negotiate to your own advantage.
QUOTE,
COMPARE
AND SELL
ALL VIA 1
QUESTION SET
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regulation news
Everyone
on board
vanNessa young provides an update
on recent regulatory changes, a new
BIBA initiative as well as guidance
affecting firms both large and small
Compliance catch-up
at conference
The run up to Conference is usually
very busy and 2013 is proving to be
no exception. We expect regulation
to be one of the main issues that
brokers will want to discuss when
they attend.
From a regulatory viewpoint,
the new regulatory architecture
came into legal effect on 1 April and
firms have been busy arranging
changes to letterheads and other
documentation.
The Financial Conduct Authority
(FCA) has a number of insurancerelated pieces of supervisory work
planned for this year, which we will
be keeping members updated on.
These include:
linsurance products sold as
add-ons
lclaims handling
lmotor legal expenses insurance
lpremium funding in the
commercial insurance market.
Discover our risk
transfer solution
While on the subject of the BIBA
Conference, we are planning to
announce at ExCeL details of our
‘risk transfer solution’.
This is a set of controls which we
hope will give insurers the comfort
to allow most intermediaries to
have unconditional risk transfer, to
‘pool’ risk transferred monies into
a single bank account and for the
arrangements to be the subject of a
possible systems and controls audit.
so I do recommend you come along
– this solution is the result of some
considerable member and insurer
involvement and we are keen to
share it with you.
We will also be welcoming
members to our stand where
we would invite you to raise any
regulation issues with us, so do come
and speak to us.
BIBA Conference
regulation session
Our consultants Deloitte will be on
hand at the regulation session at
10.30am on 16 May to fill in the gaps
reGULation news
Financial incentives:
Switch on to guidance
Final financial incentives guidance (FG13/1) from the Financial Services
Authority (FSA) should be read by
brokers of all sizes, even though
there may be a misconception that
it only applies to big players.
From a regulatory viewpoint, the
FSA’s final guidance looks
at the risks to customers from
financial incentives. This guidance
was based on the findings of
thematic work carried out at a
limited number of 22 authorised
firms. This showed that most had
incentive schemes that could
encourage staff to mis-sell to
customers and that few had put in
place effective controls to manage
the associated risks.
The Financial Conduct Authority
(FCA) is now embarking on a wider
review of firms.
This next phase of their
work is not about the regulator
looking to expand the financial
incentives guidance, but rather
a mitigation piece.
The FCA will be looking to
determine the extent to which
firms have responded to the
guidance. It wants to be in a better
position to determine whether
firms have adequately mitigated
the risks present in the way that
they remunerate their staff for
sales or services provided to retail
customers, or whether more needs
to be done to protect them.
Engaging with trade
associations
The FSA met recently with various
trade associations, including BIBA,
to explain what its next steps are
with regards to financial incentives.
This, they explained, is all part of
the new approach to supervision;
a desire for greater transparency
and to engage firms earlier on in the
process, sharing current thoughts
and proposals in order to get
Compliance Forums
5 June
Bury St Edmunds – Anglia
25 JUNE
Plymouth – West of England
09 JULY
Greater Manchester
10 JULY
Merseyside
18 SEPTEMBER
Yorkshire & Northern
(morning and afternoon
sessions)
19 september
Norwich
23 September
London Market
For more information
about events, check out
the regional section on
our website.
www.biba.org.uk
feedback before new measures are
rolled out to the industry.
The FCA will be visiting all C1
firms involved in the sale of products
or services to UK retail customers,
for which they are incentivised, from
April onwards to carry out a review
of all such arrangements within
the firm.
This will consist of a detailed onsite assessment of two schemes, plus
higher level reviews (including some
with telephone-based assessments)
of all the other schemes.
Launching online assessments
Later in the year, the FCA will be
carrying out a similar exercise with
the remainder of authorised firms
although this will not involve faceto-face visits but the use of an online
survey/assessment tool for all C2, C3
and a sample of C4 firms.
The regulator will contact these
firms to advise when the online
assessment is ready for completion,
which is expected to be early
summer. Firms will be asked to fill
in the online assessment, giving the
regulator information on the way
in which they incentivise staff and
how they control the risks associated
with those arrangements.
The guidance is designed to help
firms meet the FCA’s requirements
when developing incentive schemes
and mitigating the risk of mis-selling
created by such schemes.
During the trade association
meeting it was noted that many
smaller firms may not interpret
the language of remuneration and
incentives in the same way as a big
firm with well-developed HR and
compliance functions would.
Smaller firms are impacted
There was a concern that smaller
firms may have looked at the
corporate nature of the language
used in the guidance and thought
that it does not apply to them.
We believe it would be a serious
mistake for smaller firms to ignore
the guidance as it is relevant to all
firms that incentivise employees to
sell, regardless of size.
It is vitally important that firms
take the time to read FG13/1 if
they have not already done so and
to work out what it means for
their business.
Firms should not hold off from
undertaking this activity in the hope
that the guidance will be further
developed, it will not be.
The message to firms from the
regulator is to engage in the process,
understand what is expected of
them, and to control the risks that
incentivisation presents.
Depending on the industry
response to its wider review of
financial incentives, the FCA says
that it is still “open-minded” about
the need to change or strengthen its
rules in this area.
Members should be warned,
one firm has already been referred
to enforcement as a result of the
regulator’s earlier work, so firms
should be under no illusion that the
regulator will not take action against
the worst offenders.
The guidance can be read at:
http://www.fsa.gov.uk/static/
pubs/guidance/fg13-01.pdf
Vannessa Young is BIBA’s Compliance
Co-ordinator and runs its London Market
Region Secretariat
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Political view
Insurance
insight
at the heart of
Westminster
Jonathan Evans MP, who chairs the important
All Party Parliamentary Group on Insurance and
Financial Services, discusses reform of the FSCS
and other key issues that relate to brokers
T
he overall test for the
operation of the Financial
Services Compensation
Scheme (FSCS) scheme
should be that the financial services
industry picks up the tab for failure
of financial services companies, and
that this cost is fairly shared.
However, the recent operation
of the scheme has thrown up many
of the frustrations that well-run
businesses have when they are
required to pay up after competitors,
which are poorly run, fail.
The FSCS is, however, an essential
element in maintaining confidence
in the financial services industry.
But, I am disappointed that the
Scheme does not do enough to
remind consumers and the wider
public that it is the financial services
industry itself which funds the
scheme rather than government or
the taxpayer.
Siding with brokers
It is on the test of fairness that the
All Party Parliamentary Group on
Insurance and Financial Services has
sided with insurance brokers.
We have been concerned about
the unfairness of the current
structure of silos, which can lead to
disproportionate levies being applied
to brokers who do not write equivalent
business to the businesses that
have failed.
The FSA itself recognised the need
for a fresh look at this when they
launched their original FSCS review,
but the combination of structural
change at the FSA and the debates on
new European directives led them to
freeze the review.
Petitioning Parliament
BIBA did a great job in getting
its membership to produce a
7,500-signature petition, which as a
former director at Country Mutual
Insurance Brokers, I was delighted to
present in Parliament.
Our All Party Parliamentary Group
asked the Director of Conduct at
the FSA serious questions about this
inactivity, which later led to this
review being revived. I do not think
BIBA could have done more
to outline the unfairness of the
current arrangements.
Our All Party Group has been in
existence for 22 years, and has played
a key role in a number of government
initiatives. We were centrally involved
in the establishment of Pool Re over 20
years ago, and have been active in the
debate over consumer insurance
law reform.
Positive on Jackson
In the current parliamentary session,
we have been examining the cost
of motor insurance, the evidential
basis of whiplash injury, flooding
and ‘the statement of principles’, the
discount rate, Solvency II as well as
insurance fraud.
We are delighted that the
government has taken up the
implementation of the Jackson reforms
and we have been encouraging
ministers to make speedy progress
following the Prime Minister’s
Downing Street summit.
We have also been examining the
impact of regulatory reform including
some of the challenges raised by
Financial Conduct Authority Head,
Martin Wheatley.
We hope to clarify the exact context
of his stark warning to the insurance
industry that he would ‘shoot first and
ask questions later’.
Having devoted a lot of attention
to examining the impact of the Retail
Distribution Review, we are keen to
know whether the regulators really
understand the massive strides that
the industry has made in terms of the
quality and accountability of advice
given to consumers. We are keen to
see that big structural improvements
like this are fully recognised
and rewarded.
I do not think
BIBA could have
done more to outline
the unfairness of
the current
arrangements
About the APPG
The All Party Parliamentary Group on Insurance and Financial Services
was founded in 1991 following an initiative by Post magazine to improve
communication between the insurance industry and Parliament.
The APPG examines issues of interest to the insurance industry and
the broader retail financial services sector, especially where there are
legislative implications. It has over 50 members drawn from both Houses
of Parliament and all major parties.
The group has tackled a wide range of issues and played a significant
part in the formation of Pool Re, the introduction of equalisation
reserves, securing compensation for people mis-sold home reversion
plans and getting tougher action on uninsured driving.
It meets frequently with the regulators and a wide range of
organisations representing the industry.
Recent issues on its agenda have including exploring some of the
allegations made in a Channel 4 Dispatches programme about the
relationship between motor insurers and repairers.
It has also held meetings with floods minister Richard Benyon on a
replacement for the Statement of Principles and Peter Skinner, MEP,
Rapporteur for the European Parliament for Solvency II and EIOPA.
Other topics have included the aftermath of the payment protection
insurance scandal and the latest position on Solvency II.
The APPG’s meetings are open to members of the public and those
wanting to attend are advised to arrive early in case there are queues to
get access to Parliament.
Meet Jonathan
Evans
Jonathan Evans
was elected as MP
for Cardiff North in
May 2010 and is
Chairman of the All
Party Parliamentary
Group on Insurance
and Financial
Services and
Co-Chairman
of the All Party
Parliamentary
Group on Building
Societies and
Financial Mutuals.
In January 2013, he
was appointed by
the Prime Minister
to the Parliamentary
Assembly of the
Council of Europe.
He is a solicitor by
profession and a
former Director
of Insurance at
Eversheds, and later
a consultant to the
practice.
Jonathan has acted
as a consultant on
London Insurance
Market issues to
several major North
American insurance
corporations. He was a NonExecutive Director
with NFU Mutual
Assurance Society
(2000-2010) and
was the Chairman of
the Pearl Group Ltd
and latterly Phoenix
Life Holdings until
2010. He remains
the Chairman of
the subsidiary life
companies within
the Phoenix Group.
How do you
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www.biba.org.uk
‘Maybe’ isn’t in our vocabulary.
Delivery is often cited by brokers as our key strength. Why? Because doing
what we say we will is perhaps our most important value. In insurance,
when needed, a ‘no’ to a question is more useful than a ‘maybe.’ And, more
importantly, when we say ‘yes’ you can be certain that we’ll go on to deliver.
Visit ageas.co.uk
Visit Ageas at stand D11 at this year’s BIBA Conference and Exhibition.
BUSINESS
TRANSFORMATION
20 ISSUE 2 / 2013 www.BIBA.org.uk
WINNER
INSURANCE
2008-2012
Your Partner in Insurance.
BIBA conference 2013
A
s members across the UK gear up
for Meeting the Growth Challenge,
Lindsay Campbell looks ahead to
the broking event of the year
Event programme
& timetable
This year’s BIBA conference
takes place once again in
London and we look forward
to welcoming members to
an event that will have an
emphasis on practical ideas
to facilitate growth in these most difficult of
market conditions.
Wednesday 15 May
We are certainly mindful that ‘Meeting the
Growth Challenge’ will be taking place when
the UK economy remains in a fragile state.
Certainly when we started planning this
event – shortly after last year’s conference
in Manchester ended – we were all hoping to
see more recovery than has occurred.
But, this has not happened and instead,
manufacturing output has been falling,
many businesses report lending is hard
to come by despite initiatives to stimulate
this and certainly as far as brokers are
concerned, customers want to reduce their
insurance spend.
At the same time, there is still plenty of room
for optimism. There may be an ongoing
soft market, fewer acquisitions and less
expansion in many cases, but there remains
opportunity for brokers to help their clients
find solutions and to demonstrate their
valuable expertise.
Follow us on Twitter
@BIBAbroker, #BIBA2013 for all
your conference tweets, or join
the BIBA Linkedin group
08.30
Exhibition opens, Halls S1-S3
09.45
Conference opens. Auditorium Hall S4
Welcome to BIBA 2013
Nick Robinson
Opening Addresses
Andy Homer, Chairman, BIBA and
Steve White, Chief Executive, BIBA
Q&A session with
Martin Wheatley, Chief Executive, FCA
11.30
Refreshment break and extended networking session in exhibition hall
11.45-12.30
Fringe sessions in Platinum Suite
12.30-14.00
Lunch in exhibition hall
13.00-13.45
14.00-15.15
Keynote session
Address from Minister
Hilary Devey, Auditorium
15.00-15.50
Refreshment break, exhibition hall
16.00-16.50
Seminar sessions, Auditorium and Platinum Suite
17.30
Exhibition closes
19.30
‘Guilty Pleasures’ at the Fox @ ExCeL
Thursday 16 May
08.30
Exhibition opens. Halls S1-S3
09.30-10.30
Keynote session
David Miliband, Auditorium
10.30-11.20
Seminar sessions, Auditorium and Platinum Suite
11.20-12.00
Refreshment break, exhibition hall
12.00-13.10
Closing Keynote session
Address from Treasury Minister
Sir Chris Hoy MBE, Auditorium
13.00-14.30
Lunch in exhibition hall
13.45-14.30
14.30
Networking session in exhibition hall
16.00
BIBA 2013 closes
There’s nothing
like it
Attending the conference and ‘working it’
can produce significant business benefits
and unrivalled networking.
We are delighted to have secured the FCA’s
Martin Wheatley and Dragon’s Den panellist,
Hilary Devey to speak on the opening day,
and of course, Olympic hero, Sir Chris Hoy.
Alongside this is an outstanding exhibition and
seminar programme – the fringe programme
is also superb this year.
The fact that so many members take time out
of the office to come to the BIBA conference
every year proves its worth.
The exhibition is free to all brokers, however,
BIBA brokers are also entitled to free entry into
the conference sessions – another benefit of
being a BIBA member.
We look forward to welcoming you to Meeting
the Growth Challenge.
Get the
BIBA App
For iOS, BlackBerry and Android
Registered delegates will
be sent an email invite to
download the app or visit the
connection zone in the hall for
more information.
Seminars – bringing knowledge to life
This year, it looks as though many
delegates will be looking forward most
to the seminar programme. We believe
the range and quality is exceptional –
and the aim is for brokers to leave with
workable ideas they can implement in
the near future
Leadership
Nick Wheeler, Managing Director of
Charles Tyrwhitt shirts, will speak on
business failure and success, motivation
and the lessons he’s learned as an
entrepreneur.
Online brand loyalty
Consultant and angel investor Alex Hunter
was formerly Online Marketing Chief for
the Virgin Group and now advises on
business planning – he will explain what
works and fails in online marketing.
SME
Monica Woodley, Managing Editor for the
Economist Intelligence Unit, and Richard
Coleman, Director of SME for Zurich, will
cover threats and opportunities in the
current market.
Behaviour based motor insurance
This is the hottest topic in motor and
this session will be chaired by the
BBC’s Transport Correspondent, Richard
Westcott. The panellists are Peter Shaw,
CEO for Thatcham, Paul Stacy, R&D
Director for Wunelli, Aviva’s Simon Warsop
and Andy Wigmore of Insurethebox.
Creating a high performance
culture
Dr Steve Bull has acted as Headquarters
Psychologist for Team GB at three
Olympics Games. He will show how
creating the right mindset can enable an
organisation to thrive under high pressure.
Financial and operational
management
Amanda Frear, Head of Consulting
(Insurance) for Mazars, will look at how the
broker business model can be made more
agile in this changing environment and how
to achieve growth in a controlled manner.
Brokers’ PI – underinsurance
Jonathan Clark, Head of Business
Solutions for SCOR, and Alan Eyre,
Managing Director for Towergate,
Profession Indemnity, Simon Fenn,
Partner, Risk Solutions, Lockton
companies and Carl Evans, MD, Griffiths
& Armour Professional Risks look at
underinsurance issues encountered by
adjusters and in BI claims and which can
have an impact on brokers’ PI policies.
Regulation
BIBA’s new Chief Executive, Steve
White, will be joined by DeLoitte’s Mark
McIlquham and Ian Jacob. This session
will look at key compliance issues including
the formation of the FCA and the PRA,
revisions to the IMD and changes to client
money rules. This session will be chaired
by the Executive Editor of Insurance Times,
Saxon East.
The ultimate exhibition experience
BIBA’s exhibition is always buzzing with
energy but we always insist on there being
enough space to ensure it feels busy but
not overcrowded – and because of this, we
are now limited in the venues we can use.
The old cliché that insurance is a people
business applies as much as ever and
members who want to speak to the most
senior people can simply approach them
directly on the stand, or as can often be
arranged, book a meeting appointment.
Almost everyone who is anyone will
be at BIBA and every year new relationships
are formed and countless deals are done.
Fringe benefits
The fringe programme is free for everyone
to attend and is packed with top-notch
content. It includes:
P eter Hubbard, CEO of UK General
Insurance, speaking on schemes
G
aynor Brough and Derek Patience of
Isle of Man Captives Association on
when these are suitable
S tephen Morton, Head of AIG
Multinational Centre of Excellence, will
look at different aspects of multinational
business and opportunities
S imon Warr and Mark Wilson
of AmTrust on developments in
commercial legal expenses insurance
J ohn Needham, Partner with Littlejohn,
will speak on what funding options are
available for brokers looking to expand
J ohan van der Merwe, Executive
Chairman of DriveStyle Insure and
Coverbox, on telematics issues.
Steve takes the stage
London calling
BIBA members from around the regions will be
descending on the capital – we asked some of our
regional chairs why they will be making the journey
Trudy Brown is Personal Lines Manager
at Higos Insurance Services and Chairman
of the West of England region. She says:
“The conference is there for all brokers,
regardless of size and is the perfect
opportunity to catch up with familiar
faces and make new contacts.
“In particular, there is access to
business opportunities you may not
stumble upon during usual day-to-day
activities.” Higos will be sending eight
members of staff to London this year.
directly to senior people within insurers
and to find out what their strategies are
– we can do this at the conference.”
He adds many brokers are faced with
poor service and dual pricing issues from
insurers. “Insurers should be committed
to providing good terms for renewal
customers instead of just focusing
on trying to win new business. We
will make sure we get some straight
answers and look at which insurers we
should support.
“I’m also looking forward to speaking
to the BIBA team about the Strategic
Review and how this is going impact
on members.”
He adds brokers get most out of the
event if they plan. “Whether it is setting up
meetings or ensuring that you can cover
a number of seminars does help you get
the most out of the conference, as there
is so much packed into two days.
“We do think carefully about taking
time out of the office – and the costs of
staying in London for two of us are not
insignificant, but in this case, we see it
as being worthwhile.”
Meanwhile, Glen Gillam, Commercial
Director for Green Insurance Group of
Crowborough, East Sussex and South-East
Chairman, comments: “This is a fantastic
opportunity to meet up in one location
and catch up with those insurers you
have existing relationships with. But it is
also valuable to see what’s new on offer
from the market.”
Glen also welcomes the chance to hear
from ‘non-insurance’ people who present,
whether as keynote, in seminars or fringe
sessions. “It’s extremely useful to hear
about the challenges they are facing and
how their experiences can help us, while
earning CPD points.”
Grant Scott, Distribution and Marketing
Director of Cowens Survival Capability,
of Mansfield, Nottinghamshire and East
Midlands Chairman says: “Sometimes you
need to go straight to the top and talk
Norrie Erwin, Managing Director of
Westinsure Group and Greater Manchester
and West Pennine Chairman, says this year
his business will also be exhibiting.
“We’ll be exhibiting under our new
brand Compass Broker Services, which
is an exciting development for us. The
conference provides an ideal platform
to launch new initiatives with so many
brokers and insurers attending.”
He adds: “With so much change in
our markets it’s imperative we keep
abreast of market trends. The calibre
of key speakers is high and this year
spans the regulatory, political, sporting
and business spectrums. Combine this
with the specialist sessions and we are
spoiled for choice. I always come away
from a BIBA conference thinking it was a
great investment in my time and I’m sure
this year will be no exception.”
The BIBA conference is the one event in the
broking calendar that brings members from
all the regions together.
For those in positions of responsibility,
the conference can be the one time they
catch up with peers. Taking over a regional
chair role is a big responsibility and over a
two-year tenure, involves running monthly
meetings and representing the area at
compliance forums and dinners.
It involves a considerable workload on
top of the day job including working with
brokers from other firms and encouraging
participation by existing and new members.
New Chief Executive Steve
White will be making his
inaugural conference
address in London.
He comments: “We are
expecting high numbers of
brokers to attend and I know
so many members see this
as the one event they cannot miss – they are like
the most committed season ticket holders. This
year of course, there will be even more of an
adrenaline rush for me, but all of us are looking
forward to the conference.
“For the team, it’s a lot of graft but also a lot
of fun – and we will be welcoming as many
members on to our stand as possible – the team
will also be available for meetings throughout.”
Putting it all together
Getting the programme right takes months of
work by the BIBA team and we work closely
planning the event with The Campaign
Partnership’s Nick and Claire Chapman, who
we have a long-standing relationship with.
We always know that following on from the
previous conference is going to be tough and
Manchester in 2012 was enormously popular.
We look very closely at the feedback from
members and exhibitors.
Keynote speakers need to be booked early, and
we look to find individuals who will inspire the
audience, including some who will provide the
necessary ‘stardust’.
But, we are also keenly aware that it is
business, rather than entertainment, which
is at the heart of the conference.
This is why putting the seminars together can
take even longer as we need to ensure that
these will be highly relevant and up to the
minute in terms of the business knowledge
they impart.
exhibition
floor plan
AbacusD35
Abbey Legal Protection
E38
Ace European Group
E31
Action 365
A34
ActurisD5
Advance Insurance
J6
AgeasD11
AIGE1
AllClear Insurance Services
L25
AllianzF11
Alternative Risk Management
G15
Amlin UK
K27
AmTrust International
J11
Ansvar Insurance Co
A32
aQmenL10
Aqua Underwriting
H38
ARAG Legal Services
G41
AREPA UK)
G49
Arista Insurance
H21
Auto Restore
F44
AvivaC21
AXA F21
AXA Assistance
C48
Barbican Insurance
G17
Barclaycard Payment Acceptance
A26
Beazley Group
E21
Bee Insurance Management
L7
Berrymans Lace Mawer
C40
Bexhill UK
J38
BIBAB55
BIBA Cleaning Scheme G35
BIBA Credit Management
& Bonds Scheme
G39
BIBA Scheme Providers
B49
BIBA/Zurich Delegate Notebook
Collection Point
B1
Bluefin Insurance Services
C11
briefyourmarket.comJ35
Broker Direct
J40
Broker Network/Countrywide
K22
Call Connection
F34
CallCreditE34
Camberford Law G51
CatlinF39
CFC Underwriting
H41
Chartered Insurance Institute
A41
CILAK26
Close Premium Finance
C39
CNA C20
COBRA Network
F31
Compass Broker Services
H10
Covea Insurance
F48
CoverboxH35
Crawford & Company
H40
Cunningham Lindsey (UK)
E6
DAS Group
B20
Davies Group
D39
Direct Commercial
D10
Direct Group
D49
Ecclesiastical Insurance
G31
Employers’ Liability Tracing Office (ELTO) H49
Equity Insurance Partnerships
H50
Euler Hermes UK
L15
Evolution Insurance
K21
Evolution Underwriting
E39
Fenchurch Law
J23
FCAL3
First Recovery
J5
FirstAssist Legal Protection
B39
GAB Robins UK
H23
GB Group
G45
Griffiths & Armour
A24
GuernseyA29
Hagerty International
K19
Harris Balcombe
E2
HCC International Insurance
C28
Health and Case Management
L8
Health Shield Friendly Society
K41
Heritage H15
Hiscox G21
HM Government of Gibraltar,
Finance Centre
A23
Home & Legacy
D1
HSB Engineering Insurance
H24
Innovation Group
H51
Insurance Age
B29
Insurance Database, CUE & MIAFTR K45
Insurance Fraud Bureau
J44
Insurance Times
K38
Insure4excessK15
Isle of Man Captives Association
K11
Jackson Lee Underwriting
J30
Jubilee Managing Agency
B21
LawShield UK
D41
Legal & General
C17
Liberty International Underwriters
C30
Lloyd’sK30
LocktonK10
LoregaC38
LV=E11
Lyons Davidson Solicitors
L24
Malta Insurance Management
AssociationA30
Managing General Agents Association E51
Manchester Underwriting Management E30
MarkelG37
Markerstudy Group
F1
MarmaladeJ48
Moore Stephens
A36
National Skills Academy for
Financial Services
L11
Nexus Underwriting Management
L6
NIGC1
NMUG5
Floor plan correct at time of print
Oliver James Associates
K28
Open GI
B26
Pancentric Digital
J1
Post Magazine
B29
PowerPlaceJ39
PPC Worldwide
K4
Premium Credit
D31
Prism Network
K12
Professional Insurance Agents
J15
ProximoF40
Pythagoras Communications
K5
QBE G27
Quotezone.co.ukE41
Randall & Quilter Broker Services
L22
Readings Louden
J21
Rostrvm Solutions
A22
RPostL29
RSAD21
RWA Group
A27
RWS Group
H39
S&P Capital IQ
E35
Sagicor Underwriting
K49
SchemeServeK34
Smart Witness G11
South Essex Insurance Brokers
J50
SSP/KeychoiceJ31
Sterling Insurance Group
F38
Stride Insurance Group
H5
Tasker & Partners
J17
Temple Legal Protection
J34
The Insurer Cloud
The Purple Partnership
Thermocable Flexible Elements Thistle Insurance Services
Tokio Marine Europe Insurance
Towergate Underwriting
Tracker Network (UK)
Tradex Insurance Company
Transactor Global Solutions Travelers J52
F30
K23
D34
J24
H1
H11
D45
E49
C31
TT Club E50
UK General Insurance Group
E27
ULR Additions
G1
vrs Vericlaim UK
H31
WebsureL14
WildnetA21
WizardJ25
XL Insurance
K1
ZurichB3/B11
ZywaveK18
Up close
& personal
Chief Executives from the UK’s biggest insurers will be
at Meeting the Growth Challenge, presenting members
with one of the best opportunities to meet the people
who matter all in one place –
Andy Thornley asked some of them for views
on industry hot topics
Meet the
Chief
Executives
Jon Hancock
Managing Director,
UK Commercial Lines, RSA
Steve Lewis
Chief Executive Officer for
UK General Insurance, Zurich
Jon has held the role since July 2011,
and started work for RSA in 1990 in
Liverpool as a Marine Underwriter, rising
through the ranks, and has also worked
for the company in Singapore and the
Middle East.
Steve joined the Zurich Group in
1989 and held numerous finance and
operational roles in the UK, including
being Head of Group Operations,
Planning and Performance Management
for the Zurich Group.
Andrew Torrance
Chief Executive,
Allianz Insurance
Andy Watson
Chief Executive Officer,
Ageas UK
Richard Ward
Chief Executive Officer for
Lloyds
Andrew joined Allianz Broker division
as General Manager and was appointed
a Director in 1999. He was appointed
Chief Executive in 2003 and previously
held senior and Board positions in
consultancy and insurance.
Andy joined Ageas UK as the Managing
Director, UK Retail in February 2010. He
led the company’s UK retail strategy,
including its businesses RIAS, Castle
Cover, Kwik Fit Financial Services, Ageas
Insurance Solutions and Ageas’ Affinity
Partnerships Strategy. In 2013, Andy
was appointed CEO of Ageas UK.
Richard Ward joined Lloyd’s as Chief
Executive Officer in April 2006.
Previously he worked as both CEO and
Vice-Chairman at the International
Petroleum Exchange (IPE), re-branded
ICE Futures. Prior to this, he held
a range of senior positions at BP.
Richard is also a Board member of the
Geneva Association and The Insurance
Information Institute.
Q1
Profitable growth is
always a challenge
with pressure from
competition on existing
businesses and
underwriting discipline.
How will you be working
with your broking
partners to help promote
cover, service, claims
handling and security
over just price?
JH We will be putting in
considerable focus around our
proposition for the ultimate
end-customer. The more the
end-customer identifies with our proposition,
the better the result for all parties.
Tenure tends to be longer, number
of polices per end-customer tend to be
higher and this in turn helps our brokers’
retention and tenure. And critically, the endcustomer gets a much better product, which
is provided by brokers and insurers who
understand them.
We believe we can bring huge added
value to our brokers through building
propositions that their end-customers really
identify with, are prepared to pay for and
extend the life of their relationships with their
clients and customers.
SL Fortunately our reputation
for our underwriting strength,
governance, service and
claims capability is already
pretty good – but we’re not about to take
our eye off the ball. We regularly review
our segment propositions to make sure we
work in partnership with brokers to best
help their customer – and there will always
be refinement required across the suite of
our propositions.
AT We will be emphasising
to our broker partners Allianz
Insurance’s outstanding
AA- stable S&P rating, our
consistent strategy and our high quality
service in both claims settlement and
underwriting. We deliver on our promises.
Q2
AW Ageas stands for
sustainable, profitable growth
based on some fundamental
principles on how we act and
how we want to be perceived. Offering a
low cost, high quality service to brokers,
developing true partnerships with them
rather than a provider/supplier relationship,
and delivery.
The latter does not mean saying yes to
everything a broker wants, but when we do,
seeing it through to successful completion.
These are the tenets that we have built our
business around in terms of the way we
work, our people, strategy, structure and
processes and we’ll continue to do so.
RW At Lloyd’s we want to
do more profitable business
across the world – both in the
developed and fast-growing
economies. Brokers have invested a huge
amount of time and money in building their
global distribution networks and we’re keen
to work with those brokers for the benefit of
their clients.
As we outlined in Vision 2025, the longterm blueprint for growth for Lloyd’s, we
are and will continue to remain a broker
market. We deal in unique, complex risks
which require specialist knowledge and
skills. That expertise is the added-value
brokers can offer to their clients and means
that, rightly, price should not be the only
factor in decision-making.
Efficient and effective claims handling
keeps the people and organisations, that
we want to do business with, coming
back to Lloyd’s for their insurance needs.
We’re continually working with brokers
to improve the way claims are handled at
Lloyd’s. Under the Claims Transformation
Programme, for example, we’ve achieved
a 50 per cent reduction in end-to-end
transaction times.
We have built our business around in
terms of the way we work, our people,
strategy, structure and processes and we’ll
continue to do so.
“We regularly
review our
Where and how do you
segment
hope to achieve growth?
propositions
JH We will only grow where
to make sure
we believe we can make
we work in
long-term sustainable profits.
In simple terms, the more
partnership
we
specialise
the better our growth, as
with brokers to
evidenced by our marine, global, specialty
best help their lines and pro-fin businesses to name a
customer”
few. So, continued growth where we can
Steve Lewis leverage our expertise in specific sectors
or geographies would be seen as desirable
for us.
We are a market leader in delegated
authority and schemes trade schemes and
this is an area we will continue to grow
with our partner brokers. And in the open
market arena we’ll continue to trade hard
and also ask to grow with end-customers
who want a tri-partite relationship with
us and their broker, where we know
this brings greater value for all parties
concerned.
SL Profitable growth across
the board would be lovely of
course, but we take a realistic
view – especially in light of the
challenging operating environment. We’ve
made no secret of the fact that we’re
planning to expand our offering in the
SME space over the long term – and the
same is true for our personal lines business
where we remain hugely supportive of the
broker market.
AT Allianz Commercial has
a great proposition for both
our broker partners and our
policyholders, which has seen
us grow consistently for a decade. I expect
more of the same in 2013, with particular
emphasis on the fleet, motor trade and
packages accounts.
AW For us it’s around how
we offer a wider range of
products to brokers that
they tell us their customers
want and need. Our recent acquisition of
Groupama is a good example of a strategic
move into more niche, specialist areas and
being able to offer access to an increased
portfolio to more brokers. Price is clearly
a factor – we need to offer competitive
and keenly priced products in the markets
where we want to operate.
One of the key ways we achieve that is
through close partnership with our brokers,
targeting areas and segments where we
know we can add value to each others’
business. This is complemented by slick,
low cost processes that help us operate in
the most cost effective way.
RW The shift in global
economic power over the next
decade will create significant
growth opportunities for
Lloyd’s and we’re particularly keen to see
more business coming from the fastest
growing economies including China, India,
Brazil, Turkey and Mexico.
The opportunities for insurers are clear.
In 2011, the world experienced a number
of significant natural catastrophes. For
instance, floods in Thailand, the earthquake
and tsunami in Japan, the earthquake in
New Zealand, tornadoes in the US and
floods in Australia. These cost the industry
$107bn overall against an economic loss
of $435bn. What surprised us was the size
of that gap between insured and economic
losses. So, we decided to investigate this
further.
The result of that investigation was
our Global Underinsurance Report, which
we published last year. This looked at
the development of insurance markets
across 42 countries and, specifically,
the gap between the minimum level of
insurance needed in each country, versus
what was actually insured. We found an
overall annualised global underinsurance
gap of $168bn. Brazil was found to be
underinsured by almost $13bn, Mexico by
almost $8bn and China underinsured by
$78bn. That offers significant opportunities
for growth.
At the same time, we will continue to
look for opportunities to grow in established
economies, especially those that are
projected to grow quickly, such as the US.
In fact, while we are aiming for growth in
the developing markets to exceed GDP, we
want our growth in established markets to
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ISSUE
2 / 2013Office
www.biba.org.uk
Amlin UK 28
Limited.
Registered
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at least track the rate of GDP increase.
But growth must be sustainable so we
won’t compromise profitability for volume.
The Lloyd’s mantra of underwriting for
profit will not change.
our brokers to be able to deliver the
level of advice and touch VSMEs require
while delivering an efficient transactional
experience.
Q3
Technology is a major
influencer in general
insurance business but
it is also turning the
purchase of personal
lines and VSME
insurance into a more
transactional business.
This creates an unhealthy
focus on price and an
increase in disputes
over cover. How can we
work together to ensure
consumers access the
most appropriate cover
at the right price when
using technology?
JH We recognise that
customers have a choice
in how they purchase their
insurance and the distribution
of this is becoming ever more complex –
direct writers are increasing, aggregators
are becoming more common where both
direct writers and brokers compete, as
well as a multitude of broker models to
support customers.
We are here to support our brokers who
service customers of all sizes, but recognise
that at the VSME end it is becoming more
transactional and believe this can be a
positive development for all of us.
We need to remember SMEs still
need support and advice and often, at
the volume end, their advice needs can
be greater as they can be new start-ups
with minimal support. By utilising efficient
e-trading with simple products, a common
desire to understand, grow and support
segments, a compelling proposition and
a great relationship, we can help our
chosen partners continue to provide advice
to this important segment of UK plc where
it is most needed.
We are currently working through
some innovative propositions to facilitate
SL It’s vital that customers
have a choice – about the
type of cover they want and
how they can get it – and
technology plays an important role
in giving them that choice. But we’re
finding that even small businesses are
increasingly complex and are looking for
the relationship, reassurance, degree of
protection, and comprehension of their
needs that brokers and insurers
can provide.
AT At the BIBA conference,
brokers can come to the
Allianz stand and learn
about our new full-cycle EDI
QuoteSME platform. This provides full
integration between quote platforms and
telephony capability, and allows brokers
to trade completely online.
QuoteSME will provide the capability to
deliver efficient and speedy transactions,
thereby freeing up brokers to add more
value to the customer relationship by taking
advantage of efficiency gains.
AW The jump in the number
of people using tablet and
mobile technology to access
information, buy and sell
products, is a trend that’s here to stay.
But customers are also looking for the
personal touch.
Many research a range of motor insurance
prices, for example, on a comparison website
but often they will then pick up the phone
to the broker or insurer to talk it through.
Technology is an enabler for getting closer
to the customer, not just in terms of selling
products but also in understanding their
behaviours and needs in order to price and
package products in the most effective way.
The theme of working together strikes
me as the right one – brokers are often
the closest to the end-customer and by
partnering with their insurer it increases the
chances of the customer feeling satisfied
that their requirements have been met.
“The jump in
the number
of people
using tablet
and mobile
technology
to access
information,
buy and sell
products, is
a trend that’s
here to stay”
Andy Watson
RW The right technology,
used in the right way and at the
right time, can be an extremely
powerful tool. But it should be
an invisible benefit; something that sits in
the background and enhances face-to-face
negotiation by making the process more
efficient at every stage. For instance, through
the electronic submission and sharing of
information, and storing documents.
Lloyd’s reputation has been built on its
specialist underwriting expertise and its
appetite to insure unique and complex risks.
We firmly believe it is that face-to-face
discussion between underwriter and broker
which enables the market to continue to
develop its expertise and offer the bespoke
insurance solutions that meet the needs of
the customer.
Pricing should not be the lead factor in
decision-making.
What are the top three
matters you feel brokers
need to address to
retain and grow business
with you?
Q4
JH Working with the right
broker partners is crucial so
that our mutual goals and
values are understood and
delivered – and not all partnerships need to
be the same.
Firstly, brokers who want a business
partnership with us. We want to build
much better mutual understanding of and
alignment with our most valued brokers.
We have incredible depth in our
organisation and can bring real broad
based value to our customers if they are
willing to let us into their business and gain
real insight into their strategic challenges
and we can work together to solve them.
Secondly, we will only work with brokers
who put the end-customer first. We firmly
believe that the only long-term sustainable
proposition of all parties is making sure
we all ask one another: “Is this the right
answer for the end-customer?” Brokers
who do this will win in the long term.
AW For me the three things
that will increase chances of
success would be: continue to
seek strategic insurer partners,
where values and objectives are aligned;
within these partnerships, maximising the
use of customer data, which will give you
a competitive advantage; and working with
your insurer partners, being clear about the
customer segments you want to target.
RW It is, and always will be,
about focusing on the customer:
• Delivering insurance solutions
that absolutely meet the
customers’ needs
• Continuing to innovate to ensure that
insurance remains relevant as a risk
management tool
• Paying valid claims promptly and efficiently
And thirdly, brokers who will work
with us to charge the right price, not
the cheapest price, and so ensure the
customer is paying for the right level of
service and payment of claims.
SL First and foremost,
brokers need to make sure
they keep on top of the often
changing needs of their
customer. Once that’s done, the next
priority is to be agile enough to present the
appropriate solutions against an evolving risk
management landscape. Finally, there must
be a collaborative approach in continuing
to do everything we can to improve the
customer experience.
AT I would not want to
tell brokers how to run their
businesses but what we
are looking for in our broker
partnerships is a sharing of common
values and goals in terms of professionalism,
customer focus and mutual profitability.
BIBA supports the
CII’s Aldermanbury
“While Lloyd’s Declaration and
Chartered Status but,
is open to
as part of our Strategic
all brokers, Review, BIBA is also
underwriters in considering a Code of
the market Conduct to differentiate
members from nonlook to do
members. How do you
business with distinguish between
the highest a BIBA broker and a
quality brokers. non-BIBA broker?
Q5
BIBA brokers
are seen as
exactly that”
Richard Ward
JH As an insurer, in our daily
interactions, we see brokers
demonstrating a broad range
of behaviours and standards
towards us and their customers. We believe
there is a significant benefit to raising
general professionalism in the industry
as this would lead to a better customer
experience. We already actively encourage
our brokers to gain Chartered Status and
we would also support a proposed Code of
Conduct.
Treating brokers differently is a
growing feature of our proposition and not
something we have historically done well.
Having more industry-recognised standards
will enable us to differentiate better
between brokers and reward them on their
general behaviours as appropriate.
SL The work BIBA does
with its member firms is
fantastic – and our presence
at the conference is testament
to our support. But we’re an open-minded
insurer and we don’t discriminate
against those firms not eligible to be at
the event!
AT We support any initiative
that has as its goal the raising
of professional standards in our
industry. I am sure this stance
will come as no surprise as we too support
differentiation and the achievement of a
competitive advantage through the training
and development of our people. We also
encourage this philosophy within the broking
community in a tangible way through our
successful broker scholarship programme,
which is now in its second year.
AW Certainly things
like Chartered Status,
BIBA membership and
CII membership provide
additional endorsement that a broker takes
professionalism seriously. And often
we find these are the types of brokers
who are keen to develop long-term
strategic partnerships with us and reach
the levels of sustainable growth that
we all want.
RW While Lloyd’s is open to
all brokers, underwriters in
the market look to do business
with the highest quality
brokers. BIBA brokers are seen as
exactly that.
Andy Thornley is BIBA’s
Communications Manager
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Signposting
A solution
for every
situation
BIBA is now in talks with the Department
for Transport to ensure brokers can help young
drivers in addition to older ones, explains
Graeme Trudgill
O
lder people can often find
buying motor and travel
cover is problematic.
Our historic signposting
agreement has provided a practical
solution and is now celebrating its first
anniversary – and we are now hoping
something similar can be done to help
young drivers.
The original landmark voluntary
agreement was made in April 2012
between BIBA, HM Treasury and
the ABI.
It was the culmination of work by
the Signposting Steering Committee
set up by HM Treasury to improve
access to insurance for older people.
Members of the committee include
Curbing risk for young drivers
The Department for Transport is to launch a
consultation paper on how to reduce the number
of young driver car accidents.
The green paper will have a number of
proposals including:
a minimum learning period before
candidates are permitted to sit their test
allowing young drivers to take lessons
on motorways
increasing the existing probationary period
from two to three years for a new driver’s
licence to be revoked if they receive six or
more penalty points
making the driving test more rigorous
to better prepare learners to drive
unsupervised
providing incentives for young drivers to
take up additional training after passing
their test.
The government is also considering
imposing temporary restrictions on recently
qualified drivers.
Transport Secretary Patrick McLoughlin
said: “Improving the safety of our young
drivers is therefore a real priority and will not
only reduce casualties but should also mean a
reduction in the sky-high insurance premiums
they pay.”
Mr McLoughlin added he wanted insurance
premiums to properly reflect “conditions,
performance and risks on the road. We have
already done much as a government to address
the concerns around motor insurance but more
still needs to be done before young drivers feel
satisfied they are getting value for money. I
look forward to working with the industry and
hearing from them on how these proposals
will help.”
ABI, BIBA, the Government
Equalities Office, AGE UK, Which?,
the Financial Services Authority
(FSA), and the Human Rights
Commission.
The ABI has now made signposting
a condition of membership and all of
our members adhere to the scheme.
The concept is simple – any older
customer who needs help with finding
motor and travel cover is re-directed
to a suitable provider if the company
they initially contact is unable to
help. This would mean either another
insurer, or more often, our Find a
Broker helpline.
Dedicated contact centre
To facilitate signposting, BIBA also
set up an arrangement with a contact
centre in Swindon, which would supply
details to those who called in to our
helpline. While the agreement was not
specifically set up to help those with
pre-existing medical conditions, the
helpline is also often able to help in
these cases too.
In just a year, the signposting
initiative has proved to be extremely
successful. Since being set up, we’ve
received a 225% increase in calls to the
helpline. We have helped over 43,619
older people, which is over 165 people a
day – over a five-day week.
Brokers who have schemes to help
older drivers or indeed in any niche
area, should ensure their details are
on our website. We also provide leads
to brokers from the contact centre
and these are supplied at a small cost,
which contributes towards its running.
We have already done much as a government
to address the concerns around motor
insurance but more still needs to be done
before young drivers feel satisfied they are
getting value for money
Transport secretary Patrick McLoughlin
As we are not for profit we keep the
cost as low as possible. In addition
to helping many people, the success
of the scheme has also provided a
valuable business opportunity for
our members.
Next steps – reaching out
to young drivers
While older people were the initial
target market, there are many people
who could benefit from a signposting
service, for example, once the ABI’s
Statement of Principles comes to an
end in June, more could struggle to
obtain flood cover.
BIBA is also now in talks with the
Department for Transport to look at
how to provide signposting for young
drivers. This is an area that is a key
focus of attention right now, with a
new consultation (see panel) being
recently launched.
We have proposed that as part of
the consultation, opinion should be
gauged as to whether it would be
appropriate to introduce signposting
for young drivers seeking cover.
Details of the existing scheme have
been provided to the Department for
Transport to show how it works.
The Department for Transport
has already expressed to BIBA that
it is encouraged that telematics is
appearing to provide a way forward
for younger drivers in terms of more
affordable cover. As more brokers look
to provide schemes in this area, we see
this as another growth sector that will
be boosted by signposting.
Raising our profile
We are also calling for the Government
to increase the profile of the Find a
Broker service on their websites and to
expand the scheme to people having
difficulty accessing home insurance
cover because they live in an area at risk
of flooding. We recently also raised this
in BIBA’s budget submission sent to
Chancellor George Osborne.
Our message to government is
that brokers can cover almost all
risks and also benefit customers by
providing them with advice and that
it is a complete misconception to
believe that aggregator sites are either
cheapest or cover the market.
Evidence that signposting works
will be evidenced by BIBA annually.
BIBA will produce a report on the
number of requests for applicable
classes of business where the
customer’s age is provided, from their
call centre and website.
Graeme Trudgill is BIBA’s
Executive Director
FSCS
B
IBA will continue to campaign
on all fronts to ensure members
are treated fairly – this is a
summary of the work we have done to
date on your behalf.
Members will be aware of the latest
FSCS interim levy of £16 million,
which is being imposed on brokers – we
believe this sum to be disproportionate,
but there are some grains of comfort in
the fact it is less than the £20 million
previously predicted by the scheme.
This levy was enforced despite the fact
that we have had some 100 ministerial
and MP meetings, 54 Financial Services
Authority (FSA) meetings and 49
appointments with Her Majesty’s
Treasury, among many other activities.
Our mission now is to make sure the
levy is reduced in the future and to
ensure brokers are ringfenced as a
separate – and lower risk – class.
The fight
goes on...
comment
I
’d like to thank members and
colleagues within insurers and
the wider insurance industry
who have sent their warm
wishes following my announcement
to step down as BIBA’s Chief
Executive.
Steve White has recently been
announced as my successor, and I
fully support this decision. I know
he will do an outstanding
job for members. I’m not
retiring and will be doing
consultancy, but will
certainly miss day-today contact with the
BIBA team.
We’re now larger
and stronger and
have seen a doubling
in membership since
I joined. I was also
extremely pleased to
oversee the integration with
the IIB last year.
We are where we are because
of the strength of the team.
It’s become a cliché that
we punch above our
weight, but few
is leaving BIBA
after 10 years as Chief Executive –
he looks back over times that have
seen the association develop a
much higher profile and far more
influential role
realise that we have at most
20 employees.
We have a lot of loyalty and
people here work incredibly hard and
my success is totally connected to
their efforts.
Raising awareness
Representation is at the heart of what
we do and our lobbying both in
the UK and Europe is targeted
and effective. As a sector,
there has long been a lack
of awareness about what
brokers do – and indeed, the
perception of insurance
and the financial services
arena is largely negative.
But, brokers and the
benefits they provide
to clients is now more
recognised – and we
have been pleased
to work with the CII
on the drive towards
professionalism.
Understanding of our
Eric Galbraith
decade
A decisive
industry and the issues we face was
boosted following the launch of our
Manifesto some five years ago.
When there is an insurance issue
impacting on business or consumers,
we are now frequently first port of
call for government and we have
developed strong relationships
with ministers, MPs and civil
servants. Much is down to the team’s
willingness to provide practical
solutions and their persistence
in getting our message about the
benefits of using a broker across.
I inherited our current committee
structure but these have now been
expanded. The people on these
committees – namely members –
have phenomenal knowledge and
their expertise in areas like motor,
property liability and trade credit
is fed through to everyone. I’m also
pleased to see so much progress in the
professional indemnity advice and
coverage we provide.
We frequently act on your
feedback whether from our specialist
committees or from the regions.
Committed to the regions
I know Steve will be making every
effort as I have done to listen to what’s
happening in the regions and to ensure
you’re fully engaged with us.
We never forget how much is done
on a voluntary basis but on a personal
note, I’m pleased that the team of
regional executives we established
have helped facilitate regional
activity by taking on much of the
administrative work.
In recent years, we’ve also looked
to tackle insurers directly on where
there are areas of conflict – we do this
both centrally and by dealing with
members’ concerns on an individual
basis.
We’re never afraid to speak out
in public though and it is the fact
we are proactive and seek to avoid
bureaucracy wherever possible means
BIBA has rightly earned a reputation
for getting things done.
Do I have regrets? There are
not many, but the arrival of LIIBA
as a breakaway trade body was
disappointing given that we feel so
strongly about the need for one voice,
and we have always been closely
involved with the London Market.
Overall, however, we are now
stronger than we have ever been –
and I leave confident that BIBA can
achieve even more.
Access
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the needs of today’s businesses. To find out more and to learn about our new regional proposition providing brokers with access to
local expertise and decision makers across seven offices in the UK & Ireland, visit us at stand C31 at the BIBA Conference.
Understand how Travelers is providing brokers with access to opportunity and growth via a broadening product offering including:
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Aqua is focussed on providing high-end underwriting
products for broker distribution and we are pleased to
introduce Aurum - now recognised as one of only five
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Aqua continues to offer high net worth household products that offer the
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We also offer a range of niche commercial products, designed to meet
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Motor enquiries: 020 7397 4499
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Schemes focus
Stand
out
from the
crowd
Quality cover exclusively for members is
available in the SME and commercial combined,
before the event and credit insurance sectors.
Steve Foulsham reports
A commercial decision
Towergate Underwriting is
working with BIBA to create more
comprehensive and differentiated
cover within commercial insurance.
Price pressure remains a feature of
the SME package and commercial
combined market against a backdrop
of a UK economy struggling to grow.
Towergate Underwriting believes
in helping BIBA members
differentiate themselves from the
direct insurers, call centres and
online competition by offering a
range of added-value services to help
them compete and win business in
this competitive environment.
BIBA’s commercial combined and
package scheme (offices, surgeries,
retailers, hotels and guest houses)
with Towergate adds real value to the
usual core commercial product
range. It has built-in online health &
safety, human resources and
business continuity tools, plus the
ability to set up and manage a range
of online training tools, giving
brokers an extra edge.
Towergate has also been able to
use its market leverage to create
access to “free at point of
installation” security systems, which
will provide businesses with an
affordable and certificated service – a
36-month contract applies which is
payable by the client.
To help BIBA members win and
retain business, Towergate will soon
be launching the new “Target Trades
Initiative”. This scheme will enable
them to offer the best discounts to a
large number of trades and we are
confident this will provide greater
competitiveness and additional
flexibility for a wide range of
key trades.
Expert underwriters and in-house
claims specialists are dedicated to
providing BIBA members with the
personal service needed to help
members win and retain business.
Commission starts from 21% and
there is no minimum level of support
required. Personal account
managers are available to manage
account consolidation.
Access to the BIBA scheme is
available online and brokers
requiring access should email
biba@towergate.co.uk for login
details
For more information, contact
Trading Team Manager Tony Silve on
0844 892 0965 or email
biba@towergate.co.uk
Meeting personal injury
claim needs
From 1 April, the government is
banning the payment of referral fees
on personal injury claims and this is
going to mean considerable changes
for the motor legal expenses and
motor claims management industry.
It is also removing the ability for a
claimant to recover after-the-event
(ATE) insurance premiums and for
Schemes FOCUS
claimants’ solicitors to recover
success fees from the losing party.
The government is also
reducing the fees received by
claimant solicitors. For example,
for road traffic accidents valued
up to £10,000 handled through
the Ministry of Justice portal, fees
will be reduced from £1,200 to
£500. From 1 May solicitors – and
all companies in this industry –
will see a major reduction in
their income.
Part of the government’s
intention is to encourage the
consumer to buy legal expenses
insurance in the form of beforethe-event cover and this is how
BIBA’s link up with BDElite Total
Accident Management can help.
It is likely brokers will have
seen significant adjustments to
the terms and possibly cover from
their current provider. This is
why, more than ever, brokers need
products that deliver benefits that
are value for money and marketed
in a manner that demonstrates
this to the client. BDElite has
the products and marketing
members need.
year, and we are pleased to announce
some additional benefits for brokers
and their clients:
lBIBA Single Risk Cover, which is
provided by Atradius, is designed
for clients who have small or finite
portfolios and who may require
specific coverage on one entity.
lBIBA Broker Collections,
provided by Credit Resource
Solutions, is a new module that
provides a specialist insurance
debt recovery service to the
insurance sector. This allows
brokers to save time collecting
monies owed to them by their
clients, which in return reduces
their potential liability with the
underwriter.
lBIBA Client Collections, provided
by Select Credit Management,
provides a professional
commercial debt recovery service
to brokers’ clients on a national
and international basis.
We are pleased to welcome Select
Credit Management as the new
product provider for this improved
module.
F or more information, contact
Leslie Murray on 01204 543 778
to arrange for your BDElite account
executive to visit
Due to the continuing economic
downturn, this is an ideal
opportunity for brokers to make their
clients aware of the benefits this
scheme can offer to their business,
particularly in respect of credit
insurance.
An article titled ‘Challenges facing
UK businesses in 2013’, is available
for download by visiting ‘www.bibacredit-and-bonds.com/news’, and
it is recommended that members
consider sharing this article with
their clients.
Further details can be found by
visiting www.biba-credit-and-bonds.
com and Perkins Slade is happy to
discuss the other benefits that are
available via the scheme.
There is also a broker support area
within the scheme website, which
features a selection of different tools,
offering additional support to assist
members in promoting the products
and services of this scheme with
their clients.
F or more information, members can
email darren@biba-credit-and-bonds.
com, or complete an enquiry form
online by clicking on the ‘contact us’
option at
www.biba-credit-and-bonds.com.
Alternatively call Credit Development
Executive Darren Felsenstein on
0844 875 8148
New launches in credit
and bonds
The BIBA Credit Management
and Bonds Scheme, operated by
Perkins Slade is now in its third
Protecting the UK’s recycling sector
GM Insurance, based in Exeter, Devon has
developed expertise in the expanding recycling
sector and has grown its business in recent years
through using a BIBA scheme.
It now places cover for providers of recycling
and waste management services using the BIBA
haulage scheme, which was developed by Bluefin
and is underwritten by Aviva.
Director Gavin Mead comments: “There is
a perception that companies in this sector are
higher risk, but we have sought to challenge
this by working with clients over the long-term.
This is a growing market, and one where more
companies and individuals are looking for
dedicated firms to provide a responsible recycling
service. But it is also one that needs consistency
from insurers, which is why we find the scheme
meets clients’ needs.”
He adds: “We like the fact that Aviva is the
insurer, rather than one who is newer to the
market or offshore. We know they are committed
to the market and as such, we are able to provide
clients with more stable pricing, which remains
so important.”
GM Insurance started using the scheme four
years ago, but in the past two, have focused on
targeted marketing of recycling firms, which
has paid off. “Many of these businesses may not
belong to a trade association and these can also
be small contractors and so they want a broker
to help them with insurance. We also offer a
complementary risk management service.”
Steve Foulsham is BIBA’s Head of Technical
Services . He can be contacted at foulshams@
biba.org.uk
BIBA schemes from Towergate
BIBALet Landlords
Enhanced pricing and commission deals for BIBA members. No minimum volume of support required.
Now available to Quote and Buy online visit www.towergate.co.uk/bibalet
Tel: 01206 780 814
Email: bibalet@towergate.co.uk
Commercial Package & Combined
Innovative range of e-traded solutions with Added Value Services included. Attractive commission for BIBA members.
Tel: 0844
892 0965 Email: tcu@towergate.co.uk
Professional Indemnity
Specialist PI cover for a wide range of professions and businesses, including brokers own PI, with risk and claims management.
Tel: 0844
892 1789 Email: tpimanchester@towergate.co.uk
Contact our Broker Support Unit for details of our full product range
Tel:
0844 892 1945
Email: brokersupport@towergate.co.uk
Towergate Underwriting is a trading name of Towergate Underwriting Group
Limited. Registered in England No 4043759 Authorised and regulated by the
Financial Services Authority
Commons
gathering
representation
A
An audience of Ministers, MPs, Lords, senior
government officials, brokers, media and other
key stakeholders joined the BIBA team for our
recent Parliamentary reception
B
Crowded house:
There was plenty
to talk about at the
packed reception
IBA launched our 2013 Manifesto at a reception
held at the House of Commons, with the event
hosted by Jonathan Evans MP, Chair of the All
Party Parliamentary Group on Insurance and
Financial Services.
The reception was enjoyed by all, with plenty of
networking and opportunities to make new contacts – and
here are just some of those we were delighted to welcome.
Manifesto matters:
Timothy Kirkhope MEP for Yorkshire and
the Humber, BIBA’s Executive Director
Graeme Trudgill, Greg Knight MP for
East Yorkshire, Heather Wheeler MP for
South Derbyshire and BIBA’s Head of
Communications Leighann Forsyth
In conversation:
Alec Finch,
Chairman of AFL and
Elizabeth Finch
Boss to boss:
Aon’s CEO Robert
Brown and BIBA’s
departing CEO,
Eric Galbraith
Smiling through:
Kevin Hancock,
Managing Director at
Yutree Insurance
Catching up:
Stuart Reid and Neil
Thornton, Bluefin,
and Graeme Trudgill
representation
Cheers: Retiring Allianz General
Manager Chris Hanks, Bob Beckett,
Chairman, UKGI, Peter Blanc, CEO
Oval Insurance Broking and Andy
Homer, BIBA Chairman
Wise counsel:
Law Commissioner
David Hertzell
Part of the team:
BIBA Executive
Director Barbara
Bradshaw, formerly
of the IIB
Getting the message
out: BIBA’s Graeme
Trudgill, Jonathan Evans
MP and BIBA’s new CEO
Steve White
It’s political:
MP Greg Knight
Off the record:
Jonathan Swift, Group
Editor in Chief for Incisive
Media and BIBA’s
Leighann Forsyth
Ready to listen:
Shaune Worrall,
Managing Director
of Towergate
Underwriting
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Professional indemnity
Expertise
in
action
BIBA members benefit from having three
accredited brokers to provide them with an
expert and competitive PI advisory service.
Griffiths & Armour is the latest to join as
Graeme Trudgill reports
Each broker is selected for their
proven knowledge of professional
indemnity insurance and the markets
available. The brokers represent
both London and regional interests
and, between them, a wide range
of insurers representing a full cross
section of the market.
BIBA is pleased to announce that
Griffiths & Armour will now be
available to advise members on
professional indemnity needs and
cover. They join Towergate
and Lockton.
Navigating the PI risk landscape
Griffiths & Armour has highlighted a number of
PI risks which members should be aware of:
Under-insurance
This is one of the key 2013 BIBA conference themes
and insurers’ attitudes to under-insurance is
hardening. This means if policyholders do not obtain
full satisfaction under their policy, they will look to
their broker.
Brokers need to understand what duty they
have to their clients to advise on sums insured and
indemnity periods. They need to explain to their
clients in plain English what standard policy terms
such as indemnity, reinstatement and average mean
and the consequences if under-insurance becomes
an issue.
The client needs to be encouraged to review their
sums insured, especially in commercial property and
business interruption insurance.
Concepts like indemnity period in business
interruption require proper explanation. Brokers need
to exercise their duty of care, and not become “the
insurer of last resort” when their advice is
found wanting.
Insurable interest
There is an increasing trend for claims disputes
arising from lack of insurable interest, and lack of
attention to detail by both client and broker is the
root cause.
Forgetting to insure things, incorrect definition of
“insured”, and incorrect assumptions over ownership
or responsibility, especially with asset insurance,
is common.
Insurers seem to be asking more questions on
claims as the profitability of their account comes
under pressure.
Terms of Business Agreements (TOBAs)
This is another hot issue facing brokers and the
challenge is to fully understand the wide variety and
complexity of the TOBAs they sign up to.
Certain provisions can be onerous and impose
obligations and liabilities on brokers well beyond their
standard duty of care, and in some cases well beyond
the scope of cover provided under their
PI arrangements
The BIBA-accredited PI brokers will be exhibiting
at the BIBA Conference on 15-16 May and
delegates will be able to talk to them by visiting
Stand A24 (Griffiths & Armour) Stand K10
(Lockton) and Stand H1 (Towergate) or booking
a meeting prior to the conference.
The broker – which is also a BIBA
member – was appointed after a
rigorous assessment and has its head
office in Liverpool, along with
branches in Manchester, Glasgow and
London. It has over 70 years’ PI
experience and a team headed by Carl
Evans, Partner with Griffiths &
Armour and also Managing Director
of the firm’s Professional Risks
division. He and his team will be on
hand to advise BIBA members.
Carl comments: “We deliver a
personalised service, from
strategically located offices around
the UK, which includes a dedicated
in-house brokers’ claim and risk
management team.
“I’m confident what we offer will
resonate with many members who
want to deal with an independent
specialist.
“We form long-term relationships
with our clients, free from the
short-term impositions of external
investors that influence the service
delivery of many of our competitors.
“We know that smaller brokers in
particular want to know their PI cover
is fully taken care of and that they will
benefit from a high level of support if a
claim arises. Our overall objective is
simple, to help insurance broker
members of BIBA reduce the
likelihood of claims occurring and to
minimise the financial impact on
them when they do.”
With risks increasing all the time,
BIBA also believes it is vital that
brokers have adequate levels of PI
cover and access to guidance and
so we are delighted to welcome
Griffiths & Armour to the accredited
broker panel.
l Members can also find out more by visiting
www.biba.org.uk/BrokersPIInitiative.aspx
Graeme Trudgill is BIBA’s
Executive Director
Come se
e us
at BIBA
Stand J1
1
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Why MP Jonathan Evans backs brokers 2013

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