PREMIUM SERVICE
Page 31
Page 32
If you've noticed an error in this article please click here to report it so we can fix it.
PARTNERSHIP
Providing a first-rate insurance advisory service for FTA members is the basis of an unusual partnership between a leading city broker and the association. Bob Greenwood reports
IN 1982 a Citroen 2CV caused an accident which was a talking point in the insurance world for many months afterwards. It derailed a goods train.
The incident happened on a level crossing in France. The train demolished the car and crossing and fell into an adjacent canal. Soon after the debris was cleared the claims started to pile up from the railway company for damage to the locomotive and level crossing, from the canal operator for pollution to the canal caused by the train's cargo, and from a group of fishermen for harming the fish in the canal. All the claims, amounting to many millions of Francs, were against the 2CV owner's motor insurance policy.
At that time it was rare for vehicle insurance policies to have unlimited cover for damage to third parry property. It still is, but in this country such cover has been available to members of the Freight Transport Association for about a year. The absence of any restriction on amounts paid out to settle third party property claims is one of the more unusual features of the Pleetcover and Freightcover policy packages offered by FTA Insurance Services.
As its title suggests, FTA Insurance Services is a department of the FTA which exists to provide exclusive in surance services to the association's 13,000 members. But, unusually, it is also a formally contracted partnership with a 133-year-old firm of City insurance brokers specialising in transport insurance, Clarkson ['tickle UK.
This partnership began operating about a year ago after Clarkson Puckle had taken over the broker which had been shared earlier by the PTA and the Road Ihaulage Association Ernest A.
Notcutt and Co of Beckenham, Kent.
John Morris, the ETA's secretary and director of finance and legal services, ex plained how the partnership came about.
"We felt that when the [([IA appointed its own brokers we ought to look for a more powerful firm of brokers to match the needs of our members," he said. "Our difficulty was that, unlike the [(HA, whose members are lorry operators, our membership covers the spectrum of trade and industry. Our demands are 1110re diverse.
"Luckily, two years ago Ernest Not-. cutt was taken over by Clarkson Puckle, a major city broker. We found they suited us and from this a partnership has emerged."
The FTA demands far more of its partner than good discounts for group insurance schemes, although it obtains these as well. John Morris places heavy emphasis on the advice element of the
relaiionship: -Clarkson Puckle must
provide informed advice to our mewhers and not just sell insurance. One of the main planks of the arrangement is an audit service. CP will visit members' premises and advise them on their insurance portfolios dispassionately."' Advice can include guidance on how members Can reduce thCir risks, and hence their premiums.
Further, the arrangement allows FTA members. regardless of whether they in sure through Clarkson Puckle or have any intention of doing so, to take any specific insurance problems to any one of the broker's 14 UK offices to get them sorted out.
This is not necessarily expected to produce any instant business for the broker, or for that matter commission for the FTA "We don't look to commission as an important source of revenue," said John Morris. "The ETA philosophy is to provide what members need and what is not adequately provided by other organisations."
Not surprisingly, however, new business occasionally stems from members' seeking advice from Clarkson Puckle. A recent case in point was when a member, alarmed that his vehicle insurance premium had rocketed for no obvious reason from 316,500 to 31,7,900, approached the brokerage firm for help the day before renewal was due.
Within three hours CP had secured a new quote of 316,750, which was readily accepted by a relieved member who had the cover note the following morning, delivered personally by the broker.
The story also highlights another element of the service which the PTA expects from its insurance partner speed. If a member's lorry is involved in an accident, for instance, he does not want the vehicle to be lying idle for days, waiting for the loss adjusters to examine it before repairs can begin.
Such is Clarkson Puckle's relationship with the Lloyd's underwriters it uses that the adjuster's inspection is usually waived.
Speed is also expected of the broker in response to FTA members' inquiries, individual or collective. "When we get an inquiry we have to respond straight away, not in three hours' time or tomorrow," said Nick Tiley, development director, Clarkson Puckle UK. "They are rough task masters. We have to provide a genuine service, not use any insurance sidemen's ploys, but we are happy to do so."
For its part, "the PTA's job is to keep them briefed, for example on the legislative front, so that they can keep one step ahead and respond quickly to changing needs," said John Morris.
An example of that was the way in which the insurance broker helped the FTA to cope with the recent withdrawal of deferred payment of vat on imported goods. After the 1984 Budget, which made the tax payable straight away at the point where goods entered the country, the broker devised a guarantee scheme based on an insurance bond so that goods would not be held up.
In May the scheme was ready, during July and August the firm ran seminars for FTA members to explain how it worked so that when the new rules came into effect in November (a month behind schedule) the members were ready to cope with them.
Awareness of the insurance needs of the association's members begs an awareness also of the diversity of the membership. Because of this diversity the emphasis of FTA Insurance Services is on custom built customer insurance portfolios. After all, the needs of a quarry operator cannot easily be compared with those of a canned drinks manufacturer, for example.
Usually the only common theme is transport, so the opportunity for catchall insurance packages is limited. At present, however, three packages are available. The most important of these are the Fleetcover and Freightcover allvehicle policies.
The principal difference between them is that the first is for big fleet operators and the second for companies with few vehicles. There is no hard and fast cutoff point between them, but the rough bench mark is £10,000 annual premium.
In addition to the already mentioned unlimited third party property liability feature of these packages, they offer a number of other special benefits. For instance, they provide free cover for foreign use for up to 15 days — not much use to the international haulier perhaps, but no doubt quite useful to the UK operator who may make the occasional trip to the Continent, and who otherwise would have to pay an extra charge of up to £50 for the privilege. And there is also the added bonus of un
limited windscreen cover with either scheme.
Third and least significant of the three insurance packages for FTA members is Thrucover. This is a goods-in-transit policy which extends to protect the insured against the cost of failure by forwarders to carry out shipping arrangements. "This is less relevant now than it was, say, three years ago, when all 'clients had goods-in-transit policies," said Nick They. "The insurance world has changed since then. All-risks policies are now more common, so the need for a specific goods policy has diminished," he added.
Insurance packages nevertheless form an important part of the steadily growing business of FTA Insurance Services. A new one is currently being put together, although neither party in the insurance partnership is ready to divulge any details.
In terms of total FTA membership, FTA Insurance Services business is still relatively small. About 50 clients pay premiums ranging from three to nearly six figures annually.
"We are not striving to make any sales targets and we don't expect to start making money until three to five years from now," said Nick Tilcy. But underlying that relaxed attitude is a quiet confidence that Clarkson Puckle's "genuine serviceapproach to FTA members will establish goodwill and eventually lead to volume business.