NSW broker criticises insurer’s aggressive pricing
Leading insurers have been singing in chorus lately about the need to push up premiums to counter falling profits. But if the experience of NSW broker Philip Tinslay is anything to go by, NRMA Insurance hasn’t been given the song sheet yet. Mr Tinslay is seething after the direct insurer undercut a client’s industrial special risks premium by $15,000.
Mr Tinslay told insuranceNEWS.com.au he has sought competitive quotes from major insurers for one client’s industrial special risk policy “every couple of years”.
“These companies were generally within 10% of each other,” he said. “Premiums had reduced substantially over the past four years, and this year the premium offered [to the client] was on the same terms as last year.”
But NRMA Insurance offered the client a 40% discount to deal direct, and Mr Tinslay lost the business.
“Things are tough in the business world and our client couldn’t afford to pass up $15,000 in savings,” he said.
Mr Tinslay questioned the discount, given that insurance companies are experiencing reduced profits.
And he says this is not the only example of aggressive pricing during the current renewal period, which has been predicted to signal a firming market.
A spokesman for NRMA told insuranceNEWS.com.au the insurer stands by the move.
"NRMA Retail Business Insurance does not believe these isolated examples are indicative of what is happening more broadly across the portfolio,” he said.
“We price both appropriately for the risk involved and to provide a sustainable profit margin and do not seek to be the cheapest in the market. It is always good practice to regularly review your insurance needs and we encourage small to medium business owners to consider the benefits in buying their insurance directly".
NRMA sister company CGU was not among the insurers approached for a quote.
Mr Tinslay told insuranceNEWS.com.au he has sought competitive quotes from major insurers for one client’s industrial special risk policy “every couple of years”.
“These companies were generally within 10% of each other,” he said. “Premiums had reduced substantially over the past four years, and this year the premium offered [to the client] was on the same terms as last year.”
But NRMA Insurance offered the client a 40% discount to deal direct, and Mr Tinslay lost the business.
“Things are tough in the business world and our client couldn’t afford to pass up $15,000 in savings,” he said.
Mr Tinslay questioned the discount, given that insurance companies are experiencing reduced profits.
And he says this is not the only example of aggressive pricing during the current renewal period, which has been predicted to signal a firming market.
A spokesman for NRMA told insuranceNEWS.com.au the insurer stands by the move.
"NRMA Retail Business Insurance does not believe these isolated examples are indicative of what is happening more broadly across the portfolio,” he said.
“We price both appropriately for the risk involved and to provide a sustainable profit margin and do not seek to be the cheapest in the market. It is always good practice to regularly review your insurance needs and we encourage small to medium business owners to consider the benefits in buying their insurance directly".
NRMA sister company CGU was not among the insurers approached for a quote.