Assetsure’s James Farley on why add-ons give customers peace of mind.
Many retailers are happy to write a valuation for insurance for customers, but how about selling it alongside a diamond ring or new watch? James Farley of Assetsure explains how retailers can create an additional, valuable revenue stream by offering specialist jewellery insurance at the till.
According to analysis of Assetsure’s 2013 jewellery insurance sales data, the average value of an engagement ring now stands at £5,250, while the average age of women getting engaged is 31.
The rising value of jewellery purchases among those who choose to get married later in life (when they are more likely to have higher incomes) increasingly takes items beyond the ‘all risks’ limits set on standard home insurance policies. This is one of a number of reasons why more customers are turning to specialist insurers to cover expensive jewellery and watches.
As we all know, when it comes to jewellery, the monetary value of an item often only accounts for part of its overall worth. The sentimental significance attached to a piece can make it truly irreplaceable. Yet taking the time to ensure that it is adequately covered from loss, theft or damage can help bring greater peace of mind, and hopefully lessen the level of distress caused.
CONSUMER BENEFITS OF STANDALONE POLICIES
The most common route to insure jewellery is by including it as a named item on a standard home contents insurance policy. This usually means that it falls within the ‘all risks’ cover section, that is provided as an optional ‘add on’ to general home contents insurance. Not only does this section carry a higher premium to account for the increased risk to items taken away from home, but most standard home insurance providers also impose a maximum limit on the amount that they are willing to cover for ‘all risks’ items.
Even when expensive items do fall within the ‘all risks’ limits of a policy (which can be as low £5,000, but in most cases will not exceed £20,000), owners of valuable jewellery may find they can make significant savings on the overall cost of their insurance by moving these items to a separate and specialist jewellery policy.
Firstly, doing this will enable customers to take advantage of the more competitive policy deals out there, which offer excellent rates for general contents insurance, but poor rates for ‘all risks’. Secondly, it also allows customers to protect their no claims bonus in the event of an item being stolen, lost or damaged. Such claims on home insurance policies inevitably lead to increased premiums when the next renewal date comes around.
FREEDOM TO TRAVEL AND FEWER RESTRICTIONS
Moreover, specialist jewellery insurance is not just a valuable option for homeowners; it also carries significant benefits for younger people and those living in rented accommodation. Among this category there is a growing trend to insure only valuable, personal possessions. Specialist policies cater for this option whilst also placing fewer restrictions and demands upon the customer.
For example, many standard home insurance policies require certain types of door or window locks to be fitted. These can be both expensive and problematic, especially for people living in listed buildings or those who rent their property and require the landlord to make security upgrades.
Standard policies can include a number of other awkward stipulations, such as limiting the amount of oversees travel allowed in one year to 30 days, or requiring customers to store their jewellery in a safe installed in their home. Some even demand that an item must be worn at all times, whereas specialist policies only require these provisions in the case of very valuable items.
Over the past 12 months, the insurance industry has recorded an increase in the number of people choosing to take out specialist jewellery policies, reflecting a very real demand for this type of insurance. This has also been caused by the increase in the cost of raw materials, which in turn increases replacements costs and puts items beyond the acceptance criteria of many insurers.
In response, insurance providers, such as Assetsure, have begun offering more seamless online partnership programmes to jewellery retailers, enabling them to provide their customers with this additional, valued service at the point of sale.
Providing these additional insurance services benefits the customer and the retailer. Store owners gain an instant, extra revenue stream by receiving generous commissions on each policy purchased, as well as on all future renewals for the policy’s lifetime. The ability to earn commission aside, many jewellers simply want to be helpful as they often receive customer enquiries into insurance for expensive items.
THE RETAIL STRATEGY
There are a number of factors that retailers should consider when selecting an insurance provider. First of all, it is important to establish whether the broker is able to set up and maintain a reliable interface connection between their online system and the retailer’s own website. This enables brokers with quote-and-buy technology to bundle insurance at point of sale – when customers are likely to be most concerned about protecting their new purchase. This also acts as a white label service for the jeweller meaning that their customers feel they are receiving a complete, in-house experience.
It is also worth looking at the reporting technology available. Insurance partners with online portals can give jewellers access to real-time information like the numbers of leads generated, the volume of sales conversions and commission earned. This creates transparency for retailers around what they are gaining from the arrangement.
Finally, retailers should check that the broker is fully compliant with the Financial Conduct Authority (FCA) and other regulatory compliance standards; and that they will handle all of the administration in relation to policy sales and take care of all issues relating to insurance compliance.
The quality of the service that the insurance-partner provides also plays a key part as this impacts hugely on customer satisfaction levels. An easy way of monitoring this is to check how the insurer performs on popular satisfaction rating websites, such as Trustpilot.
In conclusion, providing specialist jewellery insurance at point of sale can bring significant benefits – helping consumers to save money and enjoy greater peace of mind; whilst creating an additional revenue stream for the retailer. What’s important is that the right insurance partner is selected, in order to ensure a mutually beneficial relationship for all parties involved.
James Farley is the managing director of Assetsure, a specialist jewellery insurance broker.
This Ask the Expert was taken from the May issue of Professional Jeweller magazine. To read the issue in full online, click here.