How would you rank the top 10 insurance companies?
- Market capitalization
- Number of clients
- Reserve funds
- Number of employees
- ?? – Please comment below, I would love to hear your thoughts
I am a short term insurance broker in Cape Town, South Africa. My business is a business within a business. The reason is simple. I want to offer personal service. There must be a personal relationship between me and the client, because that is what I like. At the same time, this limits my business, should I run a one-man-show. Now I am part of a very big brokerage which gives me access to many insurance companies. It also gives me an infrastructure of claims-handlers and underwriters. It is a win-win for everybody – especially the client.
This is important. Since I regularly see my clients in social settings, I want to look them in the eye knowing I gave them the best deal!
How I Choose the Top Insurance Company
This is how I choose the top insurance company.
- Policy Wording: the policy wording must not be limiting and have a lot of exclusions. For instance, one of the things I look for, is that your household content should be covered away from your house as if in your house.
Real Life Example:
A client is on vacation and buys a laptop. She drives home, puts the laptop on the dining table (unopened!) and goes for a stroll on the beach. Coming back she discovers a burglary and the laptop gone.
That laptop was paid out under the content section of the policy!
I read and compare policy wordings.
- Premium Income: The company must be big enough in terms of premium income and reserves that I am confident that it can pay claims, even when there is a major disaster. The principle of insurance is that many people contribute small amounts so that there will be enough money to cover a huge loss. There must be enough money to pay for that loss.
- My Resources: The benefit of how I work, is that I can go to a colleague or one of our claims handlers and ask them: “What is your experience with company Y? How do they settle claims.” You see, I can usually warn a client when a claim is not a claim. Sometimes claims are borderline – I will inform the client even when submitting a claim. But when a claim is a claim, I don’t want a company that starts asking silly questions or who suddenly requires reams of paper to confirm a claim. If it is a valid, clear cut claim it has to be paid promptly.
|Real Life Example:
in one specific niche, I have the option of three companies, A, B and C. C has the best policy wording by far. I know the CEO and before I started using them, I had coffee with him. Since I am the only one at the office in this niche, I could not ask references.
After the coffee, I place a client with with insurer C, disclosing the fact that I have no track record, other than the CEO. Then a claim arises. It is no doubt a claim. But the claims manager is too clever by far and starts coming up the most preposterous reasons why it is not a claim.
Fortunately the CEO steps in, the claim is paid and I move the client to another company.
What I do not look at.
Premium: Obviously premium is important. But it is not the main consideration. This is over simplified, but consider this. I am living in my house for 23 years. Whether it is company E, F or G, the risk is exactly the same. I disclose exactly the same claims. Why would the premium vary by a huge amount?
|Real Life Example:
One of our clients cancels a policy (with some attitude) because one of the direct insurance companies offers him a R200 saving.
Before the end of two months he is back. He had an accident and discovered the excess is one ridiculous amount.
Is it worthwhile to save R100 on premium to have an excess two or three times higher?
- The Bells and Whistles: The only add on that I am really interested in, is the assist. What assistance do I get when I am in a car accident? Do they offer home assist when the geyser goes over a weekend, for instance? What is the quality of that assist? I am not interested in cash back, clubs, etc. Short term insurance is there to cover my risks. That is what it should do.
Real Life Example:
I test a company by taking my personal insurance to them. One Sunday afternoon we go to a concert in Stellenbosch. It is rainy and the headlights are on as we drive. My wife is involved with the concert and I read while I wait.
Somebody warns me the headlights are on. I realise the battery is flat.
After the concert, while I wait for my wife, I phone assist. I wait. Fifteen minutes later I phone again. No progress. After 45 minutes my wife comes back. We are the only car on the parking lot. Fortunately I can flag somebody driving by to help me.
As my luck would have it, Monday morning when I walk into the office, the person in charge of that assist is visiting us. I tell him my experience. He answers: “But you only pay R5 per month for that service.” The point is, I pay for it, you have to provide it. Fortunately all this happened in a managers office. Two months later there was another company looking after assist.
If you have it, it must be reliable.
You have insurance to protect you against the bad things that life brings on our way.
When the wind blows the roof off, being member of an exclusive insurance club is irrelevant. What matters is how quickly and efficiently the insurance company will settle your claim and help you.
When I select an insurance company for a client, I try to optimize premiums, cover (benefits) and service.
And that is my top insurer for that client!