Education needed on how Brokers operate for Home Insurance

Annemos

I am a total novice when it comes to Insurance Brokers.

I am not quite sure of my facts here, but I believe Prestige Underwriting is an MGA that has a Home Insurance Policy called Coverall. This will cover non-standard homes, for example, ones that have had Subsidence in the past.

Questions. Do all Brokers have the same Terms and Conditions and similar pricing when offering this Coverall Policy?

For example. Let's say that "Open and Direct" offers it, but they are on-line. But "Howden" also operates it and has more of a personal touch, with offices in towns, including my own town.

Can one ask for a quote through both "Open and Direct" and "Howden"? Will it be similar in pricing? Would the Underwriter be the same? Is it held against you, that you have approached two different Brokers to access a policy of the same MGA?

Thanks for your help.

XRS200

There's no single answer. MGAs can have different deals with different brokers. They can operate a panel of insurers behind the policy.

Some brokers may not deal with them at all.

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/6671982/education-needed-on-how-brokers-operate-for-home-insurance

A traditional broker will enter into a Terms of Business Agreement (TOBA) with a range of capacity providers that include, but not limited to, insurers, MGA/Coverholder, Consortium, lineslips, Wholesale Brokers. From a terms perspective this would normally be their off the shelf T&Cs and so no matter who you approached the Aviva Complete Home policy terms would be the same.

Pricing is a different matter, whilst the capacity provider may use a single pricing model the broker has to decide what margin they are going to add on for themselves or may decide to take a lower margin and have a profit share instead. Similarly some brokers do more vetting of clients and so typically give better business and so underwriters may offer them better rates but if you get better rates or not depends on if the broker passes on the savings or decides to increase their percentage.

At the other extreme you get the likes of the AA, they dont take the capacity providers own terms but instead have a standard set of terms they want to use no matter which panel member its placed with so the terms are unique to them (and maybe any white label/affinity partners). Pricing is also more likely to be unique depending just how far they deviate from the panels norms.

Like most things in life these arent binary choices but a spectrum, a broker like AA may have standard terms for 95% of their policies but have accepted slight deviations from them for a few insurers wiling to underwrite non-standard risks for them. Similarly you get that highly trusted broker who may convince an insurer to give it a modest change from the standard terms.

As to approaching multiple brokers, it depends… some capacity providers will happily quote to anyone who asks for a premium, some will not quote to others for the same risk after already quoting for one, some brokers have binding authority so dont actually need to contact the capacity provider at all to quote so will be oblivious to if others have gotten a Hiscox quote or not.

You also get the likes of Hiscox where Hiscox Direct and Hiscox are two separate things, for my business insurance, in principle at least, I can get a quote from both, the later from a broker, but Hiscox will then decline to quote to another broker but that can be circumvented by using an MGA, Consortium, Broker with a Lineslip facility etc where Hiscox isnt involved in the decision of if to quote or not.

Wholesale brokers are bit of an outlier given they are ultimately just another broker but are typically used either for niche business (where requests for quote are too rare for the retail broker to maintain their own panel and software) or areas with higher regulatory barriers (eg Lloyds Syndicated can only quote directly to Lloyds Brokers, less than 10% of intermediaries in the UK are Lloyds Brokers, it introduces a whole additional layer of returns, compliance etc as Lloyds is effectively another regulator, unless you are specialising in the large/complex risks that needs Lloyds then most instead will use a wholesale broker to access the market on the occasional big/complex case they are asked to quote on).

Annemos

Many thanks for replies.

https://forums.moneysavingexpert.com/discussion/comment/82031090#Comment_82031090

The reason I am asking this, is that although John Lewis has Prestige Underwriting on their newly constructed Panel, I received a phone call last night, telling me JL is unable to get their Panel to quote.

Instead, they offered to pass me over to a new Broker called "Open and Direct". They asked for my permission to release my data to them. I believe from a Search, that they also use Prestige Underwriting.

I am less happy with this suggestion, as one loses the Policy wording that a John Lewis Homeowner has. Also, I always liked the 3 levels of cover that John Lewis has.

I have not seen anything yet, but again from Searching, for example, "O and D" only covers 50% of matching items, whereas JL is more helpful on Bathroom and Kitchen Units.

This is rather disappointing, as I had been told by the Insurer who has pulled out of the Market in an e-mail, that "JL will write to me with an offer of Insurance from a Member of their Panel."

I have asked JL to look into the issue for me.

MyRealNameToo

So JL are the non-traditional broker type, they have a common wording that everyone on the panel is quoting on. Open and Direct are different, they are using underwriters standard terms hence their website has link to Aviva, Alliance, Aegis etc wordings rather than a single set of policy docs irrespective of underwriter.

Matching Set cover, or not, with O&D is likely to vary depending on the insurer selected. If you say you want full cover they should be able to state if any of their policies provide this and what the price would be if any of them will quote.

While Prestige may be on both panels the fact there are different wordings can mean there will be different outcomes.

Annemos

https://forums.moneysavingexpert.com/discussion/comment/82031572#Comment_82031572

When I searched, I was looking at their Coverall Policy. This has " Welcome to your Prestige Underwriting Services Ltd ‘Coverall’ home insurance policy" in it on the first page.

I am suspecting that it is this Policy that is used for homes that had Subsidence in the past. And that is the one with the less generous Policy wording.

(Howden also told me they use Prestige for their Home Insurance, when a home has had previous Subsidence.)

PS I may have to go over to the Shabby Chique Home decorating style, where nothing matches!! 🤨

MyRealNameToo

will be unusual that insurance makes you cool

Annemos

Something does not seem quite right here. Brokers have to be impartial and work in the best interests of the Customer, I think.

John Lewis, which is now an authorised broker, has attempted by phone, to pass me off to a Broker called Open and Direct, which is part of the same stable as Prestige Underwriting which is itself on the John Lewis Panel.

They did not tell me of this link.

My research has uncovered this…..

" Headquartered in Belfast, Prestige Insurance Holdings is the parent company of AbbeyAutoline, Open and Direct, Bond Lovis and Find Insurance NI, along with specialist underwriting businesses Prestige Underwriting and Octane London Market, and insurance technology platform Covernet.

UPDATE…. Have just received a John Lewis quote with the John Lewis wording etc etc. Thank the Lord… that's all I can say.

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/comment/82038341#Comment_82038341

Why do you think they have to be impartial?

They have several obligations under the ICOBs but the COBs go short of stating they must be impartial.

They are a non-traditional broker having set terms and a relatively small fixed panel of insurers, it's not uncommon in these circumstances that they have a firm they suggest you try if they cannot place the business themselves or suggest you contact BIBA or a specialist company

There is a potential conflict of interests, depending on the commercial arrangements and exactly how they were introduced. Assuming they are not being paid anything directly or indirectly for the referral it maybe ok but the fact a related member is on their panel would probably make it a risky decision for them but the risk would be it creates an issue for those those policyholders who do buy a policy from JL underwriten by Prestige not you.

Obviously this is all purely speculative, there may be no financial benefit at all for JL and so wouldnt cause a conflict. They could have a legitimate defence why they chose that firm rather than say Towergate.

XRS200

A broker has to act in the best interest of their clients. Not sure how impartial would fit in.

Annemos

https://forums.moneysavingexpert.com/discussion/comment/82038827#Comment_82038827

My wording was poor, I think. I am definitely no expert, here. What I was getting at is, they could be sending one to a Broker that has a direct relationship with the one Insurer (owned by the same holding company). Rather than sending one to a Broker that did not have the potential conflict of interest and would provide access to several Insurers.

That was the thing for me…. why are they sending one to Open and Direct and not, say, Howden? And the thing is, if they had generated a quote from Open and Direct, might that have prevented a quote from Howden for the Prestige Underwriter?

As it is, thank goodness John Lewis has come good on giving me the John Lewis Policy, as I was promised by the Insurer who has left the UK market. (The one who has left the UK market, has to put measures in place for ongoing insurance, when a customer has had a Subsidence Claim.) I have also been told that my data was not shared with Open and Direct.

==========

For anybody that is reading this and is interested, my Excess with the old Insurer for Subsidence has always been 1000 pounds since the Subsidence Claim in 2018. My excess now with this handover is 2,500 pounds.

I had already checked FOS cases to see what is acceptable and this is deemed to be an acceptable amount of Subsidence excess, according to a recent case, after one has had a claim.

I think that level can cause trouble if one was to need a mortgage, as they don't like a Subsidence excess that is over 1000 pounds, I have heard. And it would also have to be declared on any Sales TA6 form if I ever wanted to sell.

As I said, I am just incredibly happy and relieved to have a Policy with John Lewis.