MSE News: Consumers urged to fight rising insurance admin fees

dunstonh

It's 2 minutes of an adviser's time on the phone. They are not paid enough to warrant charges of £30+ in amin fees!

What about the people that phone up and take longer than £30 minutes?
What about the other staff involved? (for every 5-10 call centre staff there is a supervisor listening in on them and managing them). For every supervisor there will be managers and compliance staff.
How do you pay for the equipment that allows 2 minute transactions?

Insurance is increasing every year.

it is not at the moment (apart from high risk areas). However, generically, you would expect it to increase.

The concept of the fee is fine as someone has to pay for it and who better than the person creating the work. Some firms are damned expensive. you tend to find its the ones who are perhaps using it as a form of cross subsidy to allow them to price cheaper on the comparison site. However, a £25 charge, for example, would not be unreasonable for admin tasks.

Vicmeldrew

dunstonh wrote: »

What about the people that phone up and take longer than £30 minutes?
What about the other staff involved? (for every 5-10 call centre staff there is a supervisor listening in on them and managing them). For every supervisor there will be managers and compliance staff.
How do you pay for the equipment that allows 2 minute transactions?



it is not at the moment (apart from high risk areas). However, generically, you would expect it to increase.

The concept of the fee is fine as someone has to pay for it and who better than the person creating the work. Some firms are damned expensive. you tend to find its the ones who are perhaps using it as a form of cross subsidy to allow them to price cheaper on the comparison site. However, a £25 charge, for example, would not be unreasonable for admin tasks.

So quid pro quo... My insurer for caravan has made an admin error by stating it isn't fitted with a wheelclamp.


That'll be £25 please Mr Insurer. I had to ring you up to correct your error.


Do you think they'll pay it? No you say because your contract is unilateral and they are no terms stated that say the customer can charge the insurer?


In that case, lets now consider their charge as an unfair contract term because it is to the detriment of the customer and wasn't capable of being individually negotiated...see where I am going with this?


Staff and systems are a part of running a business and should not be used as a side line for profit.


If insurers want to clean up thier act and be seen as ethical (hello AXA) then they first need to consider whether opaque is the new transparent. Nuff said!

dunstonh

taff and systems are a part of running a business and should not be used as a side line for profit.

And parts of business that need paying for.

Vicmeldrew

dunstonh wrote: »

And parts of business that need paying for.

So stick it on the premiums upfront, not the usual slippery slithering financial way of shoving it up them!


With due deference, I wouldn't take financial advice off a financial advisor. Respect is earned and frankly those advocates haven't earned it recently.


Insurance is in the mire of thier making, but I will give ground on the publics thirst for lower premiums. High street butchers et al didn't start cutting their customers open when other butchers opened in competition.


The financial services need some seriously effective regulation. They are like 5 year olds ( just plain greedy) and need to be told why is acceptable behaviour.

batvink

Regarding cooling off periods, I found this on the Financial Ombudsman website:

"In some circumstances, regulatory rules require ‘cooling-off’ periods for contracts. We would expect firms to make particular provision for these periods, as it is important that cancellation rights are not restricted by unfair charging practices. For example, the Insurance Conduct of Business rules require insurers to allow a cooling-off period of 30 days for pure protection contracts. If a customer decides to cancel the contract during this period, insurers are not entitled to charge anything."

http://www.financialombudsman.org.uk/publications/ombudsman-news/54/insurance.htm

whatmichaelsays

Vicmeldrew wrote: »

So stick it on the premiums upfront, not the usual slippery slithering financial way of shoving it up them!

Why should people who don't create the work share the cost burden with those who do?

This is a case of "the public gets what the public wants". We want cheap headline premiums in the comparison sites, so insurers offer these. They then make up the margin with ancillary revenue. It's no different to airlines charging £30 to check a bag.

dunstonh

With due deference, I wouldn't take financial advice off a financial advisor. Respect is earned and frankly those advocates haven't earned it recently.

Thats ok. i wouldnt take you on as a client. I like my clients to be open minded and able to discuss things and not be so narrow minded.

So stick it on the premiums upfront, not the usual slippery slithering financial way of shoving it up them!

And then everyone pays them even if they do not cancel policies or create admin. How is that fair? Why should the majority pay for the admin and cancellations of the few? Explicit charging is considered fairer and indeed, the regulator has over the last few years made explicit charging mandatory in a range of financial products (but not yet insurance).

Quentin

dunstonh wrote: »

.....Thats ok. i wouldnt take you on as a client. I like my clients to be open minded and able to discuss things and not be so narrow minded......

Is there some appraisal your prospective clients must pass before you deign to take money off them?


How wide does the mind of your client have to be before you can accept any commission he earns you?


No wonder IFAs get bad press.

dunstonh

Is there some appraisal your prospective clients must pass before you deign to take money off them?

yes

How wide does the mind of your client have to be before you can accept any commission he earns you?

What commission?

No wonder IFAs get bad press.

They dont. IFAs are the largest distribution of retail regulated financial products (as high as over 70% in pensions) yet account for under 0.5% of complaints at the FOS. Are you letting your biased and closed minded views cloud your opinion?

Quentin

You selectively choose bits to reply to!


How wide a mind does a prospective client of yours have to demonstrate before you deign to take their money?