Over the past few years the majority of insurance underwriters have made losses. While publicly, figures have been “massaged” by bringing in reserves, results have not been good and this points to just one thing for customers: rising premiums.
Independent insurance broker Belmont International celebrated its 20th year recently, throughout which time the coach and bus markets have been at its core and as such they have seen the impact of changing market conditions on the sector before.
Managing Director, Barrie Etchells, recalls: “It was ’88 – a couple of years into deregulation. When we set up we estimated that £150 million of new premium spend would come into the market as a result of deregulation, so in the early days we focussed all our energy on helping privatised operators.
“We had 72 bus operators with no track record, no claims history. The insurance market was diving into the unknown. On the coach side of things, the whole industry had relatively few people prepared to insure them because of the exposure – 58 people on a coach looks expensive.”
For a long time Crowe Motor Services were the sole insurer of bus companies. Norwich Union, who were the leaders in the coach market, decided to duck out of it only to return recently. QBE, formerly Ensign, are big in the bus and coach market today and although others are prepared to write coach and bus insurance, they do so with a very limited appetite.
Belmont estimates that it acts for between 50-60% of the UK’s buses. The coach market is slightly more complex as Barrie believes that out of the estimated 4,500 coach operators, some 2,500 of them have less than 10 vehicles – a sector of the market Belmont has not traditionally focussed on.
A matter of time
“We know of some operators who won’t be sufficiently covered and won’t even be aware of it. You just need one coach not covered for fire and its £250,000 down the drain.” This is one of the things Belmont does better than most – getting the right cover for your level of exposure at a competitive price. There is a world of difference between the standard three-day tour to Bridlington carrying 50 elderly passengers and ferrying a Premier League football squad to and from matches.
“What we are really good at is getting into the market and negotiating the best possible price for that level of risk. It’s a matter of influencing the underwriters,” says Barrie enthusiastically. “The respect they have for you and your knowledge comes into it. From a customer perspective, it is all about getting the cover right. If you are not insuring properly, you stand to lose the business. Most operators are owner/managed. Some delegate the job of insuring to their staff and if someone gets it wrong, well you can sack them, but you might have lost your business.
“Of course, we realise price is important, and we’ll get the best price available for that risk, but we will not support a cheap price if the cover and claims service is not right. We won’t compromise on that. After 20 years we think we know our stuff.”
Get what you pay for
It’s a tough sell in times of recession, but Belmont believes by sticking to its principles, it will claim more market share in 2009. Says Barrie, “Fraudulent claims from accidents have risen in recent times and in a recession this is only going to get worse. So the outlook is that insurance companies are going to want to put rates up.”
Operators have got used to getting reduced prices by going to different brokers and playing them off against each other. Belmont believes there is a better way. Initiatives like GreenRoad of “in cab” technology can give an edge on premiums and also reduce fuel costs.
Belmont will draw up a client charter for operators. In this will be the promise of a pre-renewal meeting two months prior to a renewal date and another two weeks before. Half-yearly reviews, quarterly claims information and specialist claims advice are also included.
Belmont can provide insurance for all areas of your business: employee benefits, personal insurances and, of course, business and vehicle. Savings can be made as opposed to using different brokers.
After 20 years, Belmont has managed to position itself at the heart of the coach and bus industry. Priding itself on the quality of its service and it’s clear they are always on the lookout for new ways to help operators.
“This is why we have got behind the UK Coach Awards and why we have been a part of the UK Bus Awards for the last ten years,” he says.
“It is about value for us – the benefits to our clients of our service. It we do our job right, they’ll end up with the best price anyway. Remember, you get what you pay for.
“We can get the cheapest possible price for the right level of cover, but what we can’t do is get the cheapest price for the wrong cover because we will not give the wrong cover.”