INSURANCE

INSURANCE

Price-led sales do not always meet clients’ needs when it comes to insurance policies.

WITH around 28 travel insurance intermediaries chasing sales through agents, retailers could be forgiven for being bewildered when deciding which policy to sell.

Most insurance providers today offer single and annual multi-trip policies – which look similar at first glance, especially when it comes to the three most important areas of cover.

Most offer a more than adequate £5 million to £10 million medical cover and cancellation benefit ranges from £3,000 to £5,000, which covers most holidays except possibly top-of-the-range cruises.

Baggage varies from £1,000-£1,500.

So what yardstick should agents use to decide?

Most insurance providers suspect retailers pick policies on price because the cheaper it is to buy, the more commission they can add, while still remaining competitive.

And agents who give free insurance want to buy in a low-cost policy so they are losing less money on the deal.

Aon Suretravel director Richard Jones said: “Agents look at price because travel insurance is a price-led commodity – until the client has a problem.”

Perry Gamble chairman Joe Perry said the focus on price is worrying as client needs are paramount.

“Agents are governed by premium but to get to a low-cost something has to be taken out of the policy,” he said.

“I am concerned that the emphasis on price has brought some inadequate policies onto the market.

“The effectiveness of a policy depends on what the client intends doing.

“It’s no good selling a policy that doesn’t cover belongings left in a car to someone going on a motoring holiday.”

Sterling Travel Insurance operations manager Tim Lee added: “The move to cut down cover in policies to reduce the premium has meant there have been cases where clients end up with £750 cancellation cover when they have just booked a £1,200 holiday.

“Agents must make sure levels of cover suit a client’s needs.”

Euclidian director Steve King said agents shouldlook first at what is or is not covered, paying particular attention to the pre-existing illness wording.

“Agents should be wary of wording that is not specific, for instance some policies might say a client is covered if the doctor agrees he or she is fitto travel but also say it only covers an illness that occurs during the period of the insurance.

“The problem is that a GP might clear his patient to travel knowing that an existing illness is under control.

“But if the existing condition results in a claim, it might not be covered.”

Travel Insurance Services travel and leisure manager Alex Minajew advises agents to opt for policies with medical screening.

“No-one likes it but at least the condition is declared and recorded and both sides are clear about what is covered.”

Minajew said the cancellation wording should also be checked.

Some policies list reasons for cancellation that would be covered, but other policies cover everything except that which is listed.

The latter policies offer broader cover.

King also recommends that agents assess the quality of the insurance provider using personal recommendations; the standard of documentation; and how claims are paid, as useful guides.

Aon Suretravel’s Jones said: “It is a good idea to get testimonials from existing clients. Also look at the track record of the supplier, to be sure their standards match yours.”

He added that it is important to make sure the policy matches the agents’ client base.

“If the catchment area has a lot of mature clients, look carefully for any age loadings,” Jones said.

Think ahead: agents should be very wary of non-specific wording

quotes

Buckingham: agents need competitive prices

“Price is not everything, but agents need a competitively priced product that can compete with Boots and the Post Office, as well as direct-sell insurers.”

John Buckingham, director Preferential

“There are only two reasons to take out travel insurance – for medical and cancellation cover – so make sure the sums insured are high enough.”

Stephen Howard, chief executive, Travel Protection Company

“You get what you pay for. Always look for quality rather than price and then sell it on at a fair price to the consumer.”

Doug Weston, general manager (sales), Ketteridge Group

“It is important to have a method of pre-screening that is transparent so clients know what they are covered for.”

Tim Lee, operations manager, Sterling Travel Insurance

How to choose a policy

&#42 Make sure pre-existing medical conditions wording is clear and specific.

&#42 Opt for a company that has a medical screening service and encourage clients to use it.

&#42 Check the cancellation wording and opt for the widest cover – it will help clients who have to claim.

&#42 Ensure cancellation benefit is high enough to cover the type of holidays sold by the agency.

&#42 Try to find a policy with a concierge service, such as that offered by Select. This can help with all sorts of non-medical problems.

&#42 Ensure the policy covers normal holiday activities such as water-skiing.