“Do it right, do it now” or “easy to do business with”?

The other day, one of our best supporting advisers drew a contrast to going on risk with us and one of the established insurers in the group risk market.  We quickly got into a good debate about ‘easy to deal with’ positioning in group risk.  Given that he is an alumnus of a group risk insurer who used that strap line for many years there was a good edge to the debate!

Ellipse have taken a positive and definite decision for our process to be at the other end of the spectrum to the ‘easy to deal with’ insurers.  Now that does appear totally contrarian so I’d better explain myself.

All of the things that we set out in an orderly and logical fashion as needing to go on risk have to be done by every client and their adviser at some point.  Typically, those tasks are often done long after the insurer has assumed risk.  That can feel easy at the time of going on risk but it does mean that all the parties involved have to pick up the file again. 

The further a task is from its natural place in a process, the probability that it is not done increases.  Indeed if it is not done in its natural place the risk that flows from it and the real costs of operation increase too.  Chaser processes are generated and back-logs build up.  We all know how those back-logs can destabilise the insurer, both its cost base and service reputation.  Our approach is to get the job done at the right time and then to reap a productivity dividend for the intermediary, the insurer and of course the client.  The thing just works better from the start. 

If there are gaps in the disclosure as we go on risk then the adviser creates liability for themselves.  Smarter advisory firms are highly sensitive to creating operational risk within their business. 

Overall, switching insurers is not inherently risky unless it is rushed and some sloppiness creeps in as a result. 

I have done the “easy to deal with” positioning in my Swiss Life (UK) days when there was infinite flexibility and an “everything is possible” approach.  There is no doubt that it is a superficially attractive positioning but what became clear was that it brought huge inefficiencies and many unhappy clients in its wake.  It is easy to build up a mass of unfinished tasks, incomplete data and ultimately levels of operational risk which undermine the life office and negatively impact the intermediary’s operations too.  Undoubtedly there were increased costs for adviser firms.  Personally, and professionally, I have resolved not to repeat those patterns in this business.  So we will be striving from a clear philosophical starting point and equipping advisers with systems and processes to enable “ Do it right, do it now” and to get on and make some proper returns.

Time to restructure those group life programmes in hotspots

We could beat around the bush or dance around our handbags (really?) but let’s not.

If you are an adviser to larger corporates, you’ll know the score and have clients who have had single event limits aka ‘Catastrophe Limits’ imposed on your schemes.  You will have split the larger schemes between two, three or four insurers and you might even have bought eye-wateringly expensive catastrophe excess of loss top-ups.  Cat XL is the insider jargon.  

Error Type 1 in advising these clients is assuming that there is no alternative to the capacity limits that your current insurers have provided through the last two or three review cycles.

Error Type 2 would be not asking us to quote at the centre of the restructure.

Outside of what are normally considered ‘hotspots ‘, we can do £300m to £500m event limits at no extra cost.  In the hotspots - City, Canary Wharf, W1, NW1 - you can deepen your clients cover, improve the quality of the insurance counterparty and make major cost savings for the client.  If you can design out the catastrophe excess of loss top-up there are major savings to be made. 

The last-minute word

More feisty stuff from our leader on the practice of allowing the holding insurer the last chance to match on review quotes http://www.ifaonline.co.uk/cover/feature/2086698/-minute-word-risk-renewals.

Do you agree or disagree? Let us know! news@ellipse.co.uk

We're very ple-eee-ased...

Whole team is really chuffed to have picked up a top 'eee' rating in F&TRC’s Group Risk e-Excellence study.   People expect me to bang on about how great our technology is (and I do not disappoint them!) but when other people give it praise it really adds weight.

To some extent, we were on a hiding to nothing – having set out our stall to be a digital insurer it would have looked pretty weak to get anything other than the top rating – but to have achieved it inside two years of starting the company from scratch is still something we’re immensely proud of. 

The opinions we give most attention to, though, are ones that come from users of our systems, i.e. advisers.  We will shortly be re-running a brief survey (online, of course) that we first ran back in February, asking advisers who have registered so far what they think of the online quotes service.  There are a lot more users now, and we have tweaked the system since the first survey (based on the feedback it provided ), so if you get the email we’d be really grateful if you could set aside a couple of minutes to complete it, even if you did so last time.  If clear themes come through as to the improvements respondents want to see, we WILL act on them.

Group risk...holding on tight !

Holding insurer gets to match.  It’s a well engrained habit.  But there is evidence that as a process it is looking as dated as my Dressdown Friday chinos.  You all know the routine.  The holding insurer always gets last go, sometimes with full details of their competitor’s offer.  Irrespective of whether they have done a good job for the adviser and the client and indeed whether they have been giving the client a fair price in the preceding period of cover.

Now we are properly in the market it is interesting to reflect on patterns of trading and behaviour.  We may be seeing the start of a change in this most persistent of habits.  When the market breaks its habit of asking holder insurer to match, will we then see the incumbent insurers having to sharpen up their service and actually invest in their processes ?  If you get to match even when your service has been poor, why will you feel the urge to change ?

My old guvnor Des Le Grys always taught us that before we strode into any business talks  to have a turn round the block in the other man’s shoes.  I do understand the holding insurer’s position and can see that he or she is not having a great time.  When you defend on a price derived from another insurer’s basis you will probably feel that “ there is no money in it “ and it follows that the prevailing feeling is that there is no margin from which to invest.

Advisers, and I include the major employee benefit consultants in this, are increasingly no longer routinely disclosing the best rate to allow the incumbent insurer to match as the last stage. 

Indeed they are saying to the incumbent “You will not go through to the second round automatically as the holding insurer and we expect you to quote on time according to our agreed plan with the client”.   They say that by doing this they are getting all insurers – and particularly the incumbent - to quote aggressively, by reference to their own basis and earlier.  They tell us that as a result of this change in approach  

ü  they have a faster review process,

ü  more control in their own processes,

ü  lower costs,

ü  are able to meet their deadlines with clients and

ü  are able to prepare their reports more reliably and professionally.

Interestingly they feel they are getting better prices from insurers overall too.  Some of the big incumbent insurers are providing strong feedback – sorry to use that exhausted corporate euphemism – on this change.  Perhaps that is understandable but if you price relative to your own basis you might find that your control of your book and analysis of your business gets quite a bit better.    

Profile of our leader in 'Health Insurance'

Modesty prohibits him flagging it himself, but there's no reason why I can't, so check it out here.

Just one thing to clarify: our online quote system can indeed handle quotes with up to 500 members for group life and 300 for GCI, but if you have larger schemes, we are happy to quote for those too if you send them to quotes@ellipse.co.uk

Absence-minded

Interesting story in People Management showing sickness absence fell in 2010 and that there is no single reason for this, more a combination of various factors.  Highlights the need for everyone involved – employer, benefit providers, absence management professionals and GPs – all to be pulling in the same direction.  Particularly encouraging to see that GPs are starting to play an active role in rehabilitation, rather than seeing their responsibilities end once they’ve signed patients off.