Is a brighter outlook around the corner for add-ons?

Is a brighter outlook around the corner for add-ons?

Is a brighter outlook around the corner for add-ons?
Pictured: David Kelly, Distribution Director, Open GI

With the sale of ancillary products continuing to be a FCA concern, reinforced by its latest proposals to address the issues in the market and the needs of the end consumer, should brokers be wary or optimistic about their future? 

The sale of add-on products hit the headlines again last week as the FCA published its final report, confirming an overall lack of transparency, competition and communication across the add-on market. With the regulator concluding consumers aren’t receiving value for money, it will soon be looking to introduce a number of measures to ensure insurers and brokers offer appropriate cover.

 This latest development will no doubt have sent a major warning to the broking community. Coupled with a number of high profile fines recently, brokers are currently bound to be asking themselves whether selling add-ons is too risky. For others that wish to continue trading, sales practices and processes may need to be swiftly adapted to remain compliant. However selling add-ons doesn’t need to be complicated or dangerous, in fact when sold correctly they allow brokers to offer appropriate cover and a competitive service to their customer base.

So why else should brokers not give up on add-ons?  Simply put they offer a solution to the growing price comparison site phenomenon, which increasingly promotes stripped down products as price is king. In this scenario, presenting additional cover and add-ons once the core product is chosen, is key to making sure that customers are getting a full service and appropriate cover for their needs.

Furthermore, there is a great deal of innovation currently taking place in the add-on space; from numerous product combinations helping customers, through to companies providing trouble-free claims experiences, plus many other benefits such as customer retention and advice on the way. With a better managed claims experience, service costs can be kept to a minimum, thus saving the insurer money and resulting in a more seamless customer experience

The FCA’s proposed measures, which include banning pre-ticked boxes and being able to offer easily comparable products and covers so an informed decision can be made, should bring further positive changes to the add-on space. Brokers don’t need to delay and wait for these changes to happen to start generating additional revenue however, as there are already alternative solutions available. Open GI’s Add-on Marketplace for example, which has been available for a year already, allows brokers to effectively compare and sell a number of add-ons and even save processing time.

So, despite the current scrutiny, add-ons are clearly here to stay and when sold correctly can allow brokers to bridge any gaps in cover and ultimately offer a complete service to the consumer.  

For more information about Open GI:

Helen Andrews
Group Head of Marketing & PR
Email: helen.andrews@www.opengi.co.uk

Notes to Editors:

Open GI is the leading technology partner to general insurance brokers in the UK and Irish markets. Its Core broking platform provides multi-line, multi-channel, multi-brand trading capability complemented by innovative ecommerce and mobile technologies. Open GI is part of the Open International Group alongside sister companies PowerPlace, Open GI London and Blue Fire Communications.