When I was a lad, some 25 years ago, the Insurance Company called to your door every month to collect your life insurance premium. My recollection is of a drab suited man having to run the gauntlet of neighbourhood dogs rather like the postman.
Then through the eighties more and more people found their wages being deposited directly into hastily set up bank accounts; this led to the standing order for paying all sorts of regular bills including insurances and heralded the demise of the door to door representative. An economy quickly realised by big insurance companies in the UK.
Then during the nineties big firms latched on to the idea of “direct” which is a handy abbreviation for cutting out the middle man. Just watch tv or listen to the radio toady and you are sure to observe this direct and that direct. The purpose of this in the world of insurance is to cut out the traditional high street broker and the percentage paid to them wherever possible.
The advent of the Internet and its increasing usage in most homes up and down Britain has accelerated the “direct” phenomenon. The big boys have quickly realised that websites are cheap to build and in addition there is a small army of privately owned websites on the World Wild Web that are more than happy to promote their insurance products for a commission – this commission usually being a lot less than a typical shop front broker is currently paid.
This all sounds very good………for the PLC that is. From the consumer’s point of view the casualty in all this is usually the level and quality of service. It’s fine when you are arranging your policy on the phone or on the net and you can even have the privilege of paying there and then by credit card. What will the “direct” experience be like when it comes to making ac claim? Just how “direct” is a call-centre located in India?
While you the consumer are no doubt seeing some of the savings by skipping the broker don’t think for one minute that all the savings are being passed on.
So in ten years time will the high street broker be a thing of the past?
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