How would you feel if the first port of call for your customers, the first action they took when planning a removal, was to book the insurance?

After the rise of the bedroom brokers a few years ago, companies that capture Internet enquiries for moving services and sell them to moving companies, the next wave of online commerce is upon us: the bedroom (insurance) broker.  Many moving companies have learned to work with the removal brokers in a kind of uncomfortable harmony, but does the more recent insurance version represent a much greater threat to movers’ prosperity?

Although removal brokers have many ways of working, fundamentally they collect enquiries and either sell them to movers or gather quotations for customers.  In the end it’s still the mover that does the work.  But the newer insurance version of the broker aims to do more: to sell their services to the mover; and, to sell direct to the customer.  With insurance being such an important revenue stream for movers, especially those involved in international work, and claims handling being such a quality-defining function within a moving business, is this really a step too far?  Many would say so.

The problem seems to be two fold.  Firstly, if customers go direct to the broker, making significant savings on premium, movers will significantly lose out on revenue.  Yes, they could simply increase the cost of the move, however everyone knows how tough that is to do, especially when business is as scarce as it is today.  In many cases the revenue from insurance is all that is keeping companies afloat right now.

Secondly, the established brokers work with moving companies and assess their risk based on carefully documented claims experience.  Companies who have a better claims record are charged lower premiums which they can pass on to customers as a sales benefit or keep as profit. Bedroom brokers, working with companies or directly with members of the public, quote a flat rate with no acknowledgement of the actual risk involved. This looks like a recipe for disaster when the claims come in.  Just what kind of claims handling service can be expected when rates have been set in such an arbitary way, and who picks up the pieces when the honeymoon’s over?  If the broker has got his sums wrong, will it be the mover who is stuck in the middle trying to recover some shreds of his reputation?

There’s another factor too.  Insurance, particularly the marine kind, is a complex business involving fragile content ratios, pairs & sets clauses, storage cover, excess levels, to say nothing of the dreaded General Average.  If the mover is written out of the process who will be there to advise the customer?  What is included?  Will the customer be sufficiently aware to ask the right questions? Everyone knows that nobody is interested in insurance – until they need it.

Or is this all just scaremongering? The Internet has brought with it many new businesses and the public are now quite practised at making choices online.  After all, if you can buy your car insurance online, or book an airline ticket, why not moving insurance? In a commercial world, is there room for everyone?  It’s a free country.

Well, yes it is and most people would defend the principle of freedom of choice.  But the established moving brokers have supported the industry for many years, helping with training, the writing of terms and conditions, and generally helping to lift what would otherwise be an impenetrable fog of industry jargon allowing movers the world over to make sense of this arcane subject.  The industry does, surely, owe them some loyalty.  Or is it acceptable in the throw-away world we have created to just head for the lowest bidder every time?

How would you feel if the first port of call for your customers, the first action they took when planning a removal, was to book the insurance? Is that giving the right messages?  How would you feel if you were working for the broker, rather than the other way around?

The moving industry has gained tremendously for many years from the support of its insurance professionals.  They have always taken the interests of the industry and its members seriously.  Remaining silent while that revenue stream is eroded may be seen as a moment of foolhardy weakness in years to come when the income is a faded memory.

Is it time for movers to take a stand and refuse to work with these newcomers and even refuse to accept removals unless the insurance business comes with it?  Is this something on which the BAR should lake a lead? Or should we all just accept that times move on and whatever will be, will be?  It’s your choice.

What do you think? Is this a step too far or just an inevitable development in a fast-changing world?   Have your say at comment@themover.co.uk.