Letters of authority or appointment - should it not just be a case of 'may the best man win'?
As London 2012 excites us to focus on ‘higher, faster, stronger’, many intermediaries are concentrating on their own Olympic sport – winning and keeping clients. Perhaps a gold medal performance would be ‘higher value, faster response and stronger relationships’.
A recent discussion thread on the Health Insurance Linkedin group highlights the challenges facing even the most diligent of private medical insurance (PMI) athletes – the different approach by insurers to brokers acting on a letter of authority from those who are appointed. This competitive sport elicits a wide range of views – it really does depend which side of the hurdle you start. With commission-only SME accounts how can a client differentiate between intermediaries if one has to compete with a metaphorical hand tied behind their back? An indignant holding broker may complain that a competitor will just try to beat the provider down on price but I would like to speak in defence of the challenger as I describe each round of the race:
Qualifier: If a client is satisfied with the service provided by their intermediary, they are most unlikely to allow a new pretender to compete. If some element of service is missing, then it is an open playing field for another broker to attempt gain ground on the inside lane.
First heat: The Association of Medical Insurance Intermediaries Customer Authorisation Form refers to information, and the ability to act on the client’s behalf, either permanently or not. It does not rule out negotiation for either option. A market review is acceptable so insurers should provide quotations to any authorised broker on the basis of cover they specify.
Semi-final: We’ve all done it – ‘authorised’ brokers know how to get detailed information from the insurer as long as you word the questions carefully. Why all this cloak and dagger nonsense? I can understand that pricing teams are stretched but it must be rare for more than two intermediaries to be involved with a renewal.
Final: Not all brokers win new business solely on price. Not all competitive pitches are about discounts. The quality of renewal report, risk analysis and market information can all sway a client to help you to the finishing line. Add personal credibility and interpersonal skills – anyone who suggests that simply beating the insurer down on price is the only route to glory clearly do not understand quality broking. Of course dual pricing must be avoided and identical quote requests must generate identical price, but I believe that if a broker is authorised to ask the question – the insurer should give a full answer.
The podium: Quite simply – may the best man win. If you are higher, faster, stronger – you deserve it.