Personal lines insurance in a click-to-purchase world
Published 28 May 2019
In a one-click world where simplicity and convenience is prized (and expected) and a chatbot answers questions in the place of the time-honoured customer service team, where’s the catch?
With the scope and pace of change driving innovation at a faster pace, it’s good to pause and reflect on what consumers truly value.
The 2019 Vero Index highlights shifting buying behaviours among the SME business community, particularly for less complex risks where buying through direct online channels is becoming more commonplace. At the same time, with growing complexity and a reduced risk appetite among Australian business owners, having a trusted adviser on hand can make a big difference.
Mike Donnelly, personal lines insurance expert at Gallagher (formerly Donnellys Insurance Brokers) and former National Insurance Brokers Association (NIBA) board director, explains further: “What you buy off the shelf versus what you actually need can be two different things. Online buyers are often pressed for time and generally looking to cut through the paperwork and get the job done. Ultimately, insurance is a contract and a promise, so reading (as well as understanding) the fine print is important.”
“Where a broker can be of significant value is in distilling the scope of the policy wording into an easy-to-understand format, alerting you to the key things you should be aware of, including any changes in the extent of cover and what to advise your broker on, should your personal circumstances change in the future.
“Historically we’ve found a number of customers being stung by an unwelcome surprise by presuming something is covered when in reality it was not. So how do you know if you deal direct with an insurer what cover might be missing to make the premium cheap, when they can only discuss their particular product?
“Only insurance brokers have the skill and legal capacity to provide policy comparisons about market options and explain the coverage.”
There is the old adage that if something seems too good to be true, it probably is. With a array of offers from online platforms and price comparison sites enticing customers in, it makes sense to fully understand what you are buying and the expected shelf-life of any discounts or special offer periods.
”People do need to be aware that special online offers generally apply to the first year only and the honeymoon period ends with a hard bump when you receive a renewal bill with potentially up to a 50% increase in the premium above the first year’s,” Donnelly continues.
“And some of these discounts transfer into the claims experience when the desired support layer can be somewhat lacking. Ultimately you get what you pay for.”
“There is also value in thinking big picture, particularly for business owners where there is an added advantage in taking a comprehensive view on what you need for home and for your business. The good news is that Gallagher is well placed to provide expert advice on both personal and commercial insurance for your business which saves you time, and potentially money, by bringing the discussion under one roof.
“As always, it’s case for balanced decision making, and with technology being such a pervasive force in our day-to-day lives there is no question of the positive role it plays in streamlining the choices we make.”