Mark Twain once said: “Rumours of my death have been greatly exaggerated” while obviously very much alive. The insurance-selling travel agent is not dead either but this time the rumours are more reliable.
General Insurance Standards Council. Four words that should strike fear to the heart. Though the fight for the right of the agent to sell insurance continues, regulation will come into force in January 2000 and may signal the end of insurance sales through the travel trade.
What makes me really sad is that the writing has been on the wall for so long yet has gone largely unheeded.
Since at least the mid-1970s there has been a drive for straightforward policy terms, clearly explained.
Today clients still complain that insurance policies aren’t fair and weren’t explained to them.
The travel agent, choosing the product often with little knowledge, is selling the client short. The only answer, it seems, is regulation.
We don’t yet know what form regulation will take or who will be regulated.
What we do know is that the authorities will not continue to allow clients to be sold policies without proper explanation.
If, as seems likely, agents are regulated then the financial burden of complaints against them will force many to stop selling insurance.
If intermediaries are regulated they will not want to do business with others who will let them down.
Either way, we may not see independents selling insurance for much longer.
Insurers saw this coming. That’s one reason why they moved into the direct sell and alternative markets like banks and building societies.
By taking control themselves, or giving it to highly trained financial experts, they no longer rely on travel agents.
Some have heeded the JS Insurance call to sell a better quality product but most still look for the lowest prices without considering the cover.
Strangely, they seem unconcerned that the provider might be a direct-sell competitor.
Insurance providers, like JS Insurance, still believe in the travel industry and want to support it.
Others think that we have been naive and stupid not going into other outlets. How I wish they were wrong.
“Rumours of death” are still rumours, but for how long? We will do all in our power to nurse the patient back to health by offering excellent cover at competitive rates and promotions such as our recently launched ‘Party on us’ scheme.
The ‘patient’ may revive if he has enough energy left to open his eyes.
Steve King is managing director of JS Insurance Management