November 3, 2011

If one were to draw up a list with a left and a right hand column enumerating the various things one should (L) and should not (R) do with one’s dirty laundry, the suggestion that washing it in public would feature somewhere near the top of the right hand column would, in all probability, attract little serious opposition.

Try telling that to delegates at Insurance Age’s Broker Expo 2011 event this week! The headlines more or less write themselves: “We knew it was wrong, but we just carried on,” insurance firms admit.

The it in question is, of course, what Broker Network non-exec chairperson Grant Ellis reportedly described as the next big scandal for the insurance industry, the next PPI mis-selling type revelation, the next dirty great dent in the insurance industry’s increasingly tarnished reputation (Bankstone News made that last one up)… Yes, you guessed it: it’s referral fees again!

Reporting on its own event, Insurance Age quotes Mr Ellis fessing up: “We waited for a politician to talk about this, we didn’t come out and say,‘You know what, this is wrong? We shouldn’t be doing this.’

Axa’s Matthew Reed, however, was quick to speak out for those who believe in turning crises into opportunities, opining gamely that: “We can tell people that we’re cleaning up our act. There’s always something you can take from bad news.”

Ecclesiastical’s Ian Wainwright warmed to this theme, harking back wistfully to a mythical golden age of insurance broking with the suggestion that: “We need to get back to the point where the price you see is the price you pay.’ But surely that’s just crazy talk!

Better perhaps to do what the politician in question would have done and argue that you weren’t doing anything wrong in the first place – although, of course, you appreciate that it might look a bit that way to anyone lacking sufficient insight into a terribly complicated set of circumstances – and maybe, with the benefit of hindsight, you could have been a bit more ‘transparent’ – a case, incidentally, not altogether incapable of withstanding some scrutiny.

There is, after all, no guarantee that whatever comes next will turn out any better for claimants and policyholders. The unwelcome reality is that any and all of the ills supposedly created by referral fees will simply pop up again somewhere else. Net result: everyone carries on working the system whichever way they can and customers can just keep dreaming of that cut-price insurance Eldorado in the sky.


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