Mr SANNE and Mr CORDEIRO's presentation

Average Agents' points of view and difficulties encountered in the exercise of their mandate
presented by Hans-Georg Sanne from Hamburg/Germany and Pedro Miguel Cordeiro from Lisbon/Portugal.

"First of all a word of appreciation has to be said to CESAM and thanks to everyone involved in the organisation of this conference. It is the first time that a CESAM conference with the average agents has taken place and the discussions in the course of the day have already been most useful.

In the course of this day a number of subjects concerning the average agents' work have been raised and discussed already and, therefore, with some of the points there will be duplication resp. a repetition of subjects. Perhaps this can also be seen as a summary or conclusion on the arguments raised so far.

We have heard positive remarks about our work as well as critical remarks and the latter should help us to improve the standard of our service. Here we now have the opportunity with active contributions in the discussion to put on the table and on record all those subjects which in our opinion need to be adressed. We, therefore invite you to actively participate in the discussion. We should take the opportunity here to discuss such matters with prominent representatives from the insurance industry who are with us today.

We have not specifically prepared a presentation but this "forum" should be a round for discussions to which you all are most heartily invited. It is also a special wish of CESAM that this forum should be in a form of free discussion.

In English conferences we have experienced a procedure which the English call SWOT. This stands for S=strengths, W=weaknesses, O=opportunities and T= threats. This is an exercise for all participants to analyse a situation in which they are. In this meeting we do not really have the time for this exercise but we would suggest that you all sit down for just a quiet moment to perform this analysis and arrive at some evaluation on the one side and as well at constructive conclusions what will need to be done to remain competitive in the market.

We have just noted some points in the course of todays discussions which we would like to put on the table in this open forum. We have been asked that this should be an open forum for discussions and, therefore, we want to abstain from giving you a presentation. We are rather interested in points of discussion from the audience.

Nevertheless following are the points which we have noted:

Point 1:

payments of survey fees to average agents. This subject has already been discussed during this conference from various angles. To summarize, particularly for surveys for hull / machinery insurance the invoices of the average agents are not completely paid in one go but according to the shares of the respective national market. In general the share of the French market is paid within very short time with no delays but the foreign market shares are only paid at a considerably later date. Reasons resp. explanations for this in principle unacceptable situation have been explained but the normal rule in business is that the party fiving the initial order for survey should also pay the fees. As we as average agents usually do not even know which foreign markets are to pay which shares we have actually no control or influence at what time we actually receive payment. Obviously also the insurers/underwriters and brokers are fully aware of this unsatisfactory situation and we are confident that after todays discussions they will find an acceptable solution.

Point 2:

seriously negative development of the amount of business for average agents originating from the French market. The substantial restructuring of the insurance markets with very strong concentrations and, therefore, a reduction in the number of insurance companies involved in transport insurance has led to a severe drop in number of requests for surveys. We were surprised about the statistics presented earlier today. In our experience in Hamburg for two years running a drop by nearly 50% each year and in Lisbon statistics show that from 1995 to 2000 there has been a decrease of approximately 81 % (!) in the number of interventions requested concerning CMR, haulier's liability and marine transporation of commodities. This experience may be exceptional for our areas only but you will realise it gives reason for great concern.
We have not been able to identify the reasons for this development but it seems to us that there has been a growing tendency, perhaps due to more internationalisation of the business that particularly from brokers the full support of the CESAM average agents has been reduced. Views on this subject from other average agents would be greatly appreciated.

Point 3:

Expectations of the insurance market about the qualities and activities of average agents. It appears that there is not a clear understanding what the insurance market definitely expects from the average agents. Clear instructions from underwriters and brokers would definitely help and in this respect the presentation from Mr. Denefle, for which we have been very grateful, has been very helpful. Likewise the critical remarks from Mr. Pivet have been very useful although we consider that single exceptional cases have been taken for some generalised critical remarks and what he criticised is rather the exception than the rule. There needs to be a close coordination with brokers to fully understand what their expectations and requirements are which need to be fulfilled by the average agent. These have to be expressed clearly.
If and when we hear such critical remarks as given to us in the presentation from Mr. Pivet we should not be too sensitive but should understand them as having been given with the aim and in the spirit of achieving mutual satisfaction. Again we would, here at this point, invite also your critical remarks adressed to the industry on where and what we need to receive in a more specific way as instructions and/or requirements.

Point 4:

Service Standards and IT platform. CESAM is already actively developing and promoting the Internet and have given us today a very impressive presentation. In this respect we shall have to ensure that all the CESAM average agents will be able to communicate through the modern communication media. A mutual standard should be aimed for.
But apart from communications we should also ensure that the quality standard of the experts employed for surveys should be ensured and possibly improved. In this direction Lloyds Agents are already developing proficiency tests for surveyors and since a closer cooperation with Lloyds Agents is being envisaged CESAM and its average agents may well benefit from the experience in this direction.

Point 5:

Considerations of possibilities to strengthen the position and the business of the average agents.

a.) There seems to be a development of a considerably increasing need for surveys on CMR/transport liability insurance cases. We are not sure whether in this field the insurance market actually makes use of the CESAM average agents organisation to the extent possible. There have been indications that not in all departments of brokers and underwriters the services of CESAM average agents are fully known.

b.) We would ask insurers to investigate and possibly reconsider whether the organisation of average agents should not again be involved in settling procedures. Very often it is easier and more cost/time effective if the settling agent is in the area of the incident.

c.) As we know that French insurers are also getting involved in P & I matters, is this a field in which the expertise of average agents could be utilised for the future.

d.) Between agents in the different countries there should be a closer communication and we should all endeavour to promote services in other countries to local principals who require surveys internationally. Can we offer so called "package deals" with surveys from supplier to final receiver? Could we today compete with organisations such as e.g. SGS?

e.) Is the field of prevention investigations/inspections an area where the average agents could get more involved. We understand that this issue is considered by insurance companies but the relation of cost/effectiveness needs to be further analysed.

Further suggestions from the audience here and from the average agents are most heartily invited also after the conference.

We have only had very limited time at the end of this conference and everybody is by now somewhat exhausted. Let us, therefore, close the discussion here with our thanks to CESAM and their most able organisers for this extremely useful conference and let us jointly develop the organisation of average agents for CESAM in the future. A lot remains to be done but there will be opportunities for us to grasp. Thank you.

Comments: During the discussion particularly from the representatives of the insurance companies AGF and AXA explanations were given for the reduction in the number of actual surveys by the average agents. Globalization of the insurance business and particularly an increase of the "deductibles" in insurance policies undoubtedly have an influence. The importance of the existence of CESAM's organisation of average agents and their value to the industry was again underlined.