The FCA recently suspending the permissions of Abacus Insurance Consultants (Arthur Temlett t/a) is a stark reminder of the value of trust between an insurance broker and its clients. The suspension means that the Dumfries & Galloway-based firm is prevented from carrying out any regulated activities, including acting as an insurance broker.
The FCA is concerned that Abacus Insurance may have been selling home and motor insurance and not passing premium payments on to the insurance provider (ghost broking). Beyond the criminality implications of fraud, this could potentially leave clients exposed, practically and legally, given that cover is a statutory requirement in the case of motor vehicles.
And whilst the numbers involved are not known at this early stage, it really does bring into focus the most fundamental aspect of a client-broker relationship: trust. The client must have absolute faith that the broker is operating with their best interests at heart. And yes – sometimes that can mean conversations which may initially feel uncomfortable. (Do under-insurance or gaps in cover ring a bell?) But ultimately, a broker has a professional obligation to point out the risks and to try to protect their clients from them.
And whilst service levels may vary from broker to broker, the very least a client should be able to expect is that their broker would avoid courting said exposure and risk.
Lauren Kerr, who heads up C&C Insurance Brokers in Dumfries, says: “This is just an awful situation for those clients affected or who even think they’ve been affected. Situations where people have been scammed are just another reminder that clients need to look beyond price when working with a broker. Seek out opinions from existing clients, check out their track record with the FCA, and take a view on how attentive they have been to your needs and requests during the fact-finding stage.”
Longevity goes some way in assessing how reliable a broker is. Lauren continues: “We’re a top 50 independent broker and are celebrating our 50th anniversary this year. We pride ourselves on our high retention and referral rates. And those high rates only come through building trust with clients to a level whereby they’re comfortable staying with us and sharing their positive experiences.”
Another great sign of a reliable broker is reinvestment in the business and growth. And with C&C Scotland taking on a new Development Executive, it’s clearly a thriving enterprise under Lauren’s watch. As Lauren explains: “We take our time looking at who we take on, and I make no apology for that. A new team member has to be the right fit for our clients and for our company values, so we’re delighted to have discovered Karis Fraser, who has just joined us from NFU at the end of the February.”
And keeping with NFU, we’ve recently had several clients come to us having received some considerable price rises on their renewal quotes. If you’ve noticed a steep increase in your premium, you have nothing to lose in doing what these clients did and asking us for a quote.
The message here is that success and reliability leave clues. Fortunately, the same is true at the other end of the scale, particularly with ghost broking. If you’d like a no-obligation review of your cover, please contact Lauren at Lauren.Kerr@cc-insure.com and she’ll happily play detective on your behalf.
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Image credit: Olivier Le Moal
