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market talk

PLUS!

The Editor advocates a ‘Get ‘em while they’re young’ insurance education policy

Insurance and the three R’s

W

hat was the name of the first insurance provider you ever heard of? And here’s the crunch question - are they still around today?

In the Editor’s case that moment came as a ten-year old when father had to tell three distraught sons that the television set was terminally ill (the tube had gone, he told us). Yes, that’s how far back this trauma occurred! Worse still, he couldn’t afford to

buy another. He had just cleaned out his savings buying his first car, and that very month his employers had moved him onto the salaried staff. That meant no wage packet for three whole weeks - a serious pitfall in the days before credit cards and banks falling over themselves to lend you money. As the eldest son, it fell to me to probe deeper into this apparent

financial disaster. Father seized the educational opportunity by explaining how much it cost to run a car. He displayed the documents, including the tax and insurance. “What’s insurance for? Why is it compulsory?” I asked, definitely prompted by the juvenile thought that spelt rip-off. Father patiently explained the consequences of a claim for negligent driving, summing up with “How are you going to pay for that?” For this ten-year old the case was proven. Just a pity that this education and the imagination to take it on board is missing among the one-in-whatever-it-is motorists who still ask the question - “Why should I pay for insurance?” And the first insurer I ever heard of? Red Star at Lloyd’s (or Equity Red Star as we still know them today).

EquityRed Star - still with us today

A

perfect cue from the previous item to report on a recent chat

with John Josiah, Underwriter at Equity Red Star. While the Equity name has a lot of history behind it, time hasn’t stood still. Three years on from the acquisition by IAG and one year from the departure of Hastings Direct, Equity Red Star is still a specialist motor-led general insurance account. “The motor account has not seen a lot of

16 insurancepeople APRIL 2010

growth in recent years, particularly relevant because we do not pursue volume for its own sake,” says John. “During that time we’ve enjoyed modest success in our main aim, which is to write profitably. But we grew last year and 2010 looks like being a fertile opportunity to progress with more profitable growth.”

But what about current market conditions which are reported to favour direct writers while penalising

the broker market insurers? “I think that is true to some extent in mainstream private car business”, he says. “But specialist needs such as taxi, classic car business, haulage and fleets have to ask more questions at the point-of-sale. And these customers also like the idea of actually talking to someone who shares their enthusiasm. “But underwriting is less easy in the broker market. Direct insurers can track everything because it’s all

under their immediate control. We are aiming to level that particular playing field with more data becoming available with links, to DVLC for instance.

“Mainstream motor brokers now mostly use their commission to attract business, and rely on the add-ons to balance their income. That practice is not so rife elsewhere. Over the last two years we have allowed our private car account to reduce since it provides Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36
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