Direct insurer or insurance broker…which is your preferred method for insuring your car and home?
Well I suppose it boils down to personal preference.
For you it might be the direct route.
You know what you want, you’re prepared to handle your own risk, and you truly believe that direct car and home insurance is the cheapest, most convenient route.
Why bother paying someone you’ve never met for something where he offers little input, right?
Or maybe you’re someone who prefers having a broker?
You don’t have the time or the inclination to deal with your car and home insurance and prefer outsourcing this necessary evil. You’ve never had a problem come claim time, and you always receive fast, efficient service.
When it comes to “broker versus direct” what does each side have to say about the other?
“Cut out the middleman” and save yourself money.
“Are you willing to represent yourself in a murder trial or would you prefer using a lawyer?”
So whom should you believe?
I’m quite sure you won’t believe a word I say, would you? After all, I’m a broker and I know on which side of the fence I stand.
But what if you could hear the truth directly from the horse’s mouth?
What if you could hear the truth from the CEO of one of the major direct insurance companies in South Africa?
Recently I had the pleasure of receiving an email from a gentleman by the name of Angelo Coppola.
In his article – Making The Case For Insurance Brokers? – he discusses a question posed to the CEO of a major direct car and home insurance company by the Financial Mail (You will also find the link to the original Financial Mail article there).
The question was:
“Why do the direct insurers have lower claims ratios than the broker based businesses?”
And here was the CEO’s astonishing reply:
“We are better at selecting risk as we bring in clients one by one. Santam, Mutual & Federal and Zurich get a portfolio of business from a broker and sometimes take on a few bad risks to keep the business. And brokers certainly put pressure on the insurers to pay their clients’ claims. We are not as lenient. …”
Interesting reply don’t you think…or am I misconstruing what he’s saying?
I’ll let you make your own mind up! 🙂
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Until next time.
The InsuranceFundi Team