One of the benefits of my Wealthwoke journey is that it’s now part of my job to take a much closer look at my service providers to whom I pay over my hard-earned money every month. These include brokers, insurers, asset managers, medical aids, banks, coaches, online services, schools, security and a whole host of others.
My plan for the year is to methodically go through each of these and assess them based on the following three metrics:
- performance/service levels
- value for money
- relevance of offering.
This last metric in particular has become increasingly important as new technologies can render products and companies defunct in just a couple of months.
This month I focused on my short-term insurance broker and insurer. I grouped these two providers together as in my view, they are intertwined due to the fact that the insurer was selected by the broker. Plus, I can never tell which one is actually messing me around.
This is how they scored:
Performance/service levels – 3
Unfortunately, over the last few years, while the insurance broking company I use has expanded significantly, its service levels have moved in the opposite direction. Two poorly handled claims coupled with me discovering that I have been paying building cover premiums on a property that I have not owned for three years (I have subsequently recovered almost R30 000 in premiums for this) meant a failing grade in this department.
Value for money – 4
After requesting a rebroke last year, the broker “miraculously” negotiated a 20% reduction in my premiums from the existing insurer. When I queried how I was able to get this significant reduction and why I was not receiving it all along, I received no proper answer. Then, in a rebroke with another brokerage last week, I received a quote from another insurer (with seemingly a better product) that was roughly 10% cheaper than my existing premium.
Relevance of offering – 5
The insurance world has made some huge strides over the last year, thanks to technology. There are companies out there using technology to offer products that adjust your premiums based on your movements and driver behavior. Others are using it to enable simpler and faster online claims processes. Then there are insurers that are being innovative in offering built-in cover for unusual items such as recovering of data, removing trees and reward for information. As far as I can tell, my insurer offers none of these (or at least none that I am receiving).
Overall, my providers received an average score of 4, which I actually think is quite generous. As such, I am in the process of moving to a new broker and insurer. Au Revoir.
I know it is tough to find the time and inclination to do this exercise, but what else are you going to do once Game of Thrones ends on Sunday? Besides being financially prudent, I can promise you that going through this process is a liberating experience.
In the words of Twisted Sister; “We’re not gonna take it anymore.”
Have a great weekend Wealthwokers.