ARAG fighting for the winning spot

ARAG have just received some very exciting news and are proud to announce that they have been shortlisted as a finalist for ‘Insurance Provider of the Year’ at the 2012 Personal Injury Awards.

The awards go to individuals or companies who work in the personal Injury sector, and its aim is to “identify high standards of practice and to inspire others to emulate the achievements demonstrated by those who have been shortlisted”. The ceremony will be taking place on 14 November at The Riverbank Park Plaza Hotel in London; and is set to be a fantastic evening.

ARAG feel privileged to be shortlisted, as there were a number of high quality submissions this year. ARAG has proven itself to be a cutting edge legal expenses provider since its formation in 2006. The company was formed by six legal expenses professionals, and has now grown to over 55 staff, with an income approaching £40m. Their innovative approach to business, excellent client communication and positive client satisfaction, has led them to be a strong contender to win ‘Insurance Provider of the Year’.

With only seven weeks to go, the countdown to the event can now begin!

Broker feedback instigates BTE sales expansion and restructure

Expansion of our innovative product range, ever growing client base and beating sales targets year on year provides the perfect conditions for BTE sales to reshape the team structure. From a team of two five year ago, headed by Andy Talbot, today it  boasts eight field sales and office based personnel.

In March, Matt Warren was appointed Broker Business Manager.  He moved into the role five years after he joined ARAG as a Business Development Executive.

With a long history of experience in the legal expenses industry, including line management roles he accepted the challenge to drive the broker sales team forward over the coming years. Andy Talbot, Head of Sales comments: “Matt has been with the company practically from the start and has excelled in generating business from brokers in the South of England. His new role makes him additionally responsible for the UK-wide broker facing development team.”

More recently in August, ARAG further strengthened their sales team when Chris French joined the team, taking on the role of Broker Account Handler.

In this newly created position, Chris is responsible for supporting the Business Development Executives, providing office-based support for brokers, monitoring customer satisfaction and also be accountable for his own panel of brokers.

Broker Business Manager, Matt Warren comments, “At ARAG we respond quickly to customer feedback and the addition of Chris to the team proves our commitment to continually benchmarking our performance and strengthening where required, resulting in an enhanced service to our customers.”

It doesn’t stop there. We are positive that we have the relevant expertise, quality product offerings and high level of service required to continue to attract high calibre ‘household’ names. As such we are expanding our Corporate Sales function and expect further insurers and underwriting agencies to work with us in the near future.

To keep up to date with us and discuss your needs, please visit Andy Talbot, Matt Warren and Jon Layton on Thursday 13 September at EXPO South, Ascot - stand 7.

Mutually beneficial outcomes

While there is no definitive number of associations and similar organisations listed in the UK it is estimated that there is well over 300 that are fully staffed and up to a 1000 smaller associations in the UK. For you, the broker, this represents an excellent opportunity to maximise income.

Trade associations have several main functions for the companies that they serve; these include representation, providing economies of scale, supplying information and training. Alongside this associations must work hard to attract new members and retain existing, therefore a range of additional member benefits are offered.

Recently, ARAG has seen a surge of brokers working with associations to provide an insurance offering, including ARAG legal expenses insurance. This growing trend is mutually beneficial for all involved, members receive essential cover with their membership fee, associations can negotiate a competitive rate and for the broker and ARAG we maximise income and grow the business portfolio.

ARAG can provide legal expenses insurance on a commercial or personal basis and most importantly it can be tailored to the needs of industry depending on specific regulatory requirements. It may also be that there are specialist solicitors that the association recommend; ARAG may be able to work with them to provide the cover.

Alongside the legal expenses insurance, ARAG products also come with a range of professional services, such as a 24/7 legal advice helpline and an online document service, helping businesses to concentrate on what they do best.

So, whether you already work with associations or are looking to move into this market the opportunities are there to be taken and a partnership with ARAG means that it is likely to be a smooth and profitable journey!

To find out more either get in touch with your local ARAG Business Development Executive or email chris.french@arag.co.uk

Making the most of BTE

A recent report conducted by the Legal Ombudsman considers two key points in the run up to LASPO’s implementation. Firstly, how before-the-event legal expenses insurance (BTE LEI) is going to fill the gap and secondly how well it is currently placed to do so.

As reported in Litigation Futures, the report commissioned a YouGov questionnaire which found that while, “40% of those surveyed had some type of legal insurance cover”, 74% of these were “unsure or didn’t know what financial cover their policy provided.”

“Concerning” was the word coined by the Chief Legal Ombudsman, Mr Sampson and perhaps rightly so. As a legal expenses insurer we know that we provide high-quality BTE LEI products that are designed around the customer’s needs. We work hard to make our policies understandable to the masses, following the FSA guidelines and provide training to the brokers who are on the front-line selling our products. There are no secrets; it is all down in black and white with Keyfacts in both the point of sale and policy wording.

However, for most it is currently sold to them as an add-on product which tops up the cover they receive in their main insurance purchase, for example car or home insurance. Already there is a barrier as it is likely that the LEI is buried within the main policy wording. Before I started working in insurance, I would simply skim the wording and make sure that the key areas were covered and then hope that I wouldn’t need to make a claim. I am much more conscious now of checking carefully, but I think this is minority when it should be the other way around. Saying that, if I did have a legal issue and needed to consult a solicitor, if the solicitor is doing their job properly they should discuss with the client their insurance details and investigate if BTE is available. After all, you only need the policy at the time of a claim.

Therefore, perhaps it is a general education of the benefits that is required. As found in the survey only 40% of those asked had LEI, in Germany for instance 60% of the population have some form of LEI. The report acknowledges that “legal expenses insurance is beneficial for the simple reason that it’ll continue to allow people to take legal action when they would not otherwise have been able to afford it.”

LASPO – Insolvency cases exempt from reforms

Further news to the LASPO Bill, which was given Royal Assent last month; with the recoverability of success fees and ATE insurance premiums being unavailable with effect from April 2013, insolvency cases will now be exempt from no-win, no-fee reforms until April 2015.

LASPO is still progressing but there are still big issues and small yet significant concessions that bring into question how it will be implemented as early as spring 2013. As discussed in a Legal Futures article, problems with QOCS still exist, the government is “seeking further advice from the Civil Justice Council” with speculation that there may be some issues making the “qualifications work”. QOCS is an important aspect to get right as claimants are intended to be protected from defendants’ costs in most circumstances, even when they lose.

On the concessions side, Mesothelioma cases were excluded during the ‘ping pong’ stage between the Houses until an impact review has been undertaken. The latest exemption from the April 2013 date brings us to the insolvency cases.

As reported in Law Society Gazette, Justice Minister Jonathan Djanogly made a written statement to the House of Commons, “Insolvency cases bring substantial revenue to the taxpayer, as well as other creditors, and encourage good business practice which can be seen as an important part of the growth agenda with wider benefits for the economy. These features merit a delayed implementation to allow time for those involved to adjust and implement such alternative arrangements as they consider will allow these cases to continue to be pursued.”

The Law Society Chief has welcomed the latest decision asking that “this logic applied to other types of cases, where a similar implementation delay, until 2015, would help to avoid unwelcome impacts on ordinary people’s right to secure legal redress.”

The LASPO rollercoaster continues, be sure to check back soon for more news!

Yet another successful BIBA Conference finished for the year

So there we have it, BIBA 2012 has come and gone for the year, and what a success it was!

ARAG spent months planning and organising their presence at this massive yearly conference, which was held in the bustling city of Manchester; one of the most popular BIBA destinations. We were very pleased with our stand which incorporated the new brand strategy. With free goodies and beverages, the stand remained busy throughout with delegates, and lots of good leads were generated.

Amongst nearly a full house of ARAG management and Business Development Executives, we were pleased to welcome Dr Wolff Graulich, who joined us from Dusseldorf; our ARAG Germany headquarters.

The first day at the conference went well and was extremely productive, so it had to finish just as well - some fine dining with guests at Vertigo; set in the heart of Manchester. The beautiful restaurant is spread over five floors, offering modern elegant food in exquisite surroundings. With a wine and cocktail range as diverse as their creative food, there was time after the evening meal to catch up and relax.

We’ll look forward to BIBA returning next year, where it will be held at the ExCel Exhibition Centre in London. Plans for next year’s stand are already in progress with lots of creative ideas flowing through our marketing department, so watch this space!

Landlord’s Emergency Solutions, the perfect pesticide?

Landlords of residential properties will often encounter problems with tenants but what about smaller unwelcome visitors taking up residence? Pests can not only cause damage to a property but create an uncomfortable living environment. There are also difficult conversations to overcome with tenants as to whose responsibility it is to get rid of the pest problem. ARAG’s emergency assistance policy for landlords provides the solution.

ARAG’s expanding range of emergency assistance products includes Landlord’s Emergency Solutions which has been designed specifically for landlords of residential property. This cost-effective insurance product provides assistance from a qualified contractor if an unforeseen event makes the property unsafe to occupy or causes actual or potential damage to the property or its contents. Insured events (see list below) include vermin infestation, something that marks Landlord’s Emergency Solutions out from many others.

• Breakdown of the main heating system
• Plumbing and drainage problems
• Damage to or failure of locks and windows
• Breakage or failure of the sole toilet unit
• Loss of the domestic power supply
• Vermin infestation
• Emergency alternative accommodation for tenants if the property is unsafe to occupy.

So what other benefits can your clients expect? Our helpline is available 24 hours a day, 365 days a year and the costs associated with the call-out charge, parts and materials and labour costs will be covered to an agreed limit. As always there are terms and conditions, but if you would like to offer this product to your clients, do not hesitate to contact us for more information.

Justice for business and supporting growth

On 8 May, the Ministry of Justice (MoJ) published a report; Justice for Business, summarising its programme of reforms. According to the document, these reforms are aimed at transforming the justice system by making it more effective, less costly and more responsive to the public. So how does it measure up?

The report highlights the MoJ's progress against their Action Plan for Growth in the Legal Services Sector which was published May 2011, and its achievements under the coalition government.

“[The MoJ is] supporting increased competition and growth within the UK legal sector by implementing Alternative Business Structures (ABS)”. In October 2011, the MoJ began legislation allowing the creation of ABS; provided for non-lawyers to partially/fully own, or to control firms providing legal services. Some legal expenses insurers have taken steps to become an ABS but at ARAG, we have no intention to join up. Instead, our aspiration is to work with legal practices as partners, not compete against them.

"We [the MoJ] are working to ensure that costs for participants in civil court cases are proportionate.” ARAG is a member of the Consumer Justice Alliance (CJA), which has been formed to highlight the impact that Lord Justice Jackson’s proposals on civil litigation will have on injured victims. Despite opposition, the reforms, contained within Legal Aid Sentencing and Punishment of Offenders Bill received Royal Assent on 1 May 2012. The government is now considering other measures necessary in the implementation of the Act such as the introduction of Qualified One-way Cost Shifting (QOCS), which could have a negative impact on third parties insurers and local authorities.

“The MoJ is moving towards implementing fees for employment tribunals. This will ensure that tribunals are able to focus on genuine claims and help to avoid business being faced with unnecessary or unfair costs.” These changes aim to encourage potential claimants to consider the strength of their case, which they hope will lead to “more realistic expectations for individuals and greater certainty for employers.” There have been mixed reactions to these changes but ARAG is closely following developments to ensure that our products provide the best cover for clients.

“We [the MoJ] are taking forward measures to reform the civil justice system, helping individuals and businesses resolve disputes.” The MoJ is implementing a range of measures which will benefit businesses by making dispute resolution quicker and less gruelling. These include proposals to speed up the process of resolving small claims, increase the small claims limit from £5,000 to £10,000 and refer more cases to a Small Claims Mediation Service. ARAG is working in partnership with Go2mediation to provide an online mediation service. The aim is to reduce costs of litigation and save policyholders the time and stress involved in court proceedings.

QuickQuote re-launch – Quote in 60 seconds

ARAG’s online quotation system for commercial legal expenses insurance has received some major upgrades, and is now known as QuickQuote. This new online quotation engine is designed to make it easier and more flexible for brokers to use.

ARAG was voted “Best legal expenses provider” in 2010 and they were congratulated for their “quick and efficient” online quotation system. However, they have further improved on their original system, which has led to this re-launch of a much more efficient quote engine, thus making it one of the fastest quote-and-buy facility in our market.

QuickQuote offers an extensive range of enhancements, including:

• Quotes in just 1 minute
• Simple application form with keyword explanations, training material and “how to” presentations to guide brokers through the process
• Immediate documentation which can be printed straight from the website
• Quotations and hold-cover notes which can be emailed directly to a broker’s email for convenience
• New search facility for existing quotations, making it easier for them to be found, edited and resubmitted
• Variable commission rate for brokers, from 0-25%
• No claims discounts, different levels of indemnity and hold-cover options

“The majority of ARAG’s business arrives under scheme arrangements, although the demand for standalone polices remains high.  A significant number still require individual rating, this is what we had in mind when we enhanced the QuickQuote facility,” says Andy Talbot, Head of Sales at ARAG.

Access to QuickQuote is restricted to agency partners of ARAG, if you are not currently an agent with ARAG; find out more on our website: www.arag.co.uk

Added value products – getting it right

Having run an insurance brokerage in the past, I still remember the regular letters from my motor insurance providers telling me that they were reducing my motor commission. As income from that source was under constant downward pressure, it was only natural that you would examine all of your options for maintaining or even boosting income. Therefore, the ancillary products which sat alongside the main policy became of critical importance to balancing the books.

The days of having an all-inclusive price for the main policy and all of the additional add-on products, such as legal expenses, are over. Nowadays, it is common sense that customers should know how their insurance premiums are made up.

Mandatory commission disclosure did not happen but high margins are causing concern among our betters. The FSA is now on the case and no doubt their successor will follow suit, so now is a good time to make sure your house is in order.

Here are a few thoughts to be going on with:

1. Optional add-on insurance: State this clearly and price it separately
2. Compulsory add-on insurance: Clearly point this out to the client
3. Preferred provider(s) for add-on insurance: Think carefully if the sale is advised or non-advised and reflect this in your terms of business
4. Mis-selling scandals: Avoid this by backing up your add-on insurance with a ‘demands and needs statement’
5. Documentation: Ensure that your clients receive the correct documentation for the policy they have bought
6. Margins: Consider carefully what a reasonable margin would be
7. Find out more: For further advice, facts and figures on selling optional add-ons read the FSA report: http://www.fsa.gov.uk/pubs/other/factsheet_extras.pdf

Ultimately, we should all consider if optional add-on products are genuinely useful for the client and not just a vehicle to increase revenue. I used to think to myself, would I sell this to my mother? If so, at what price?

If revenue from commission and optional extras is not enough, there is always the administration fee. But that is a whole other subject….

John Gray, Corporate Development Executive
Find out more about ARAG legal insurance products

Create legal documents with an ARAG legal expenses policy

Most ARAG legal expenses insurance (LEI) products give customers access to an online document service where they can create personalised documents such as wills, tenancy agreements, job offer letters and many more.

The range of documents available is tailored to the policy that you sell, for instance with ARAG’s Landlords’ Legal Solutions your clients will have access to circa 160 legal documents, including Section 8 and 21 notices, as well as a comprehensive law guide.

The process of producing a document is simple. Using the Rapidocs system the user follows a series of step-by-step questions and their responses populate the required elements of the template to produce a tailored and personalised document to download.

The best thing is that many of the documents are free with ARAG policies, others will attract a reasonable fee but customers can always try before they buy.

The documents, letters and law guide are all written by solicitors and barristers and to ensure that they are current they are frequently reviewed and updated.

The latest updates, which will be rolled out in the coming months, include:

• Auto question scrolling: On pages with long lists of questions, users will no longer need to use a scroll bar; instead the next question appears in the middle of the page to ensure that they don’t miss anything
• Intelligent progress bar: Enabling easier navigation and includes a progress bar so users can see how far way they are from completing the form
• Online editing: In some cases customers will be able to directly edit the documents online if necessary and return the document for a final review 

To find out more about ARAG legal expenses insurance products and legal services online, either visit www.arag.co.uk or email enquiries@arag.com 

A cut too far?

Why do so many businesses operate without legal expenses insurance?
We still hear statistics that the vast majority of SMEs operate without the benefit of legal expenses insurance and my brokers tell me some of their clients are opting out of the legal cover when their insurance package is renewed.

In hard times such as these, all costs are scrutinised more carefully, but is cutting the legal expenses from a policy a cut too far? Are they throwing the baby out with the bath water?

To me this has two aspects; is the cover understood and is it properly sold?

Important covers provided by an LEI policy
Is a legal expense claim likely? I recently read that an employment dispute is 12 times more likely than a fire. The usual employment settlement is £3,000 but they can easily run to tens of thousands.

Add to that other covers like tax investigation, regulatory cover (including health and safety defence) and contract and debt. ARAG LEI policies have a limit of indemnity of £100k, so for the low premium involved surely it is well worth having.

Adding even more value
Don’t forget that the policy also includes legal and tax helplines which some think are worth the money alone.

And what about the online document drafting service? This is definitely a valuable benefit with circa 100 documents available for download and tailored online to suit the policyholder’s needs. For example, property owners can access a buy to let guide, draft a tenancy agreement and download an inventory checklist.

Selling LEI
Most SME business is transacted via a broker, so clearly they have a vital role to play. It may be tempting to let the client delete the legal cover, take the cheque and run, but is that in the client’s best interests?

I have sat in brokers’ offices and seen their renewal checklist where right at the end there is a one-liner “Commercial legal expenses, not required”.

At renewal discussions, is legal cover relegated to this tick box exercise at the end of the meeting or is it better to take time to sell the benefits and explain the cover?

Hopefully the answer is the latter option and ARAG can lend a hand with training and advice on sales materials, just ask.

I have run my own business and I would state categorically that every SME should have legal expenses insurance.

For and most importantly against the LASPO Bill

Various government proposals and bills seem to be having a tough time in the House of Lords, not least the rocky ride being shown to the Legal Aid, Sentencing and Punishment of Offenders Bill (LASPO) which proposes cuts to legal aid and sweeping changes to civil litigation.

Currently in committee stage there have already been a few concessions made but with many peers opposed to the Bill the next report stage should be very interesting.

The last couple of weeks have seen a number of articles in the news with varying opinions on the LASPO Bill.

In the Telegraph over the weekend, the Justice Minister Ken Clarke was defending the Bill by highlighting the costs that the NHS pays in success fees to lawyers in clinical negligence cases. According to their figures:

• the number of claims rose from 5,426 in 2006/07 to 8,655 in 2010/11
• legal costs of claimants suing the NHS rose over the same period from £83 million to £195 million
• the cost of defending the actions rose from £49 million to £62 million.

Blaming the compensation culture, Clarke explained that "Taxpayers expect that the system should compensate claimants properly and reward their lawyers appropriately, not liberally.”

On the other side of the fence, the Telegraph article mentions phone-hacking victims like the Dowler family who have lobbied the government with a letter saying that “the changes will make it difficult for any but wealthy people to launch legal actions.”

Similarly, a range of charities, organisations and campaign groups are fighting back against the Bill, including AJAG and the CJA both of which ARAG is a member of.

The latest press release from the Law Society explains: “Peers in the House of Lords will discuss altering the legislation in a bid to eradicate "compensation culture" but the move would instead penalise victims of accidents, fraud, negligence and wrong-doing as well as businesses and even the Government.”

In an article in the Guardian, charities Oxfam and Amnesty International have joined the campaign on behalf of those suffering human rights abuses, warning that, “Victims of oil spills, pollution or land grabs in developing countries will no longer be able to pursue claims in British courts against multinational corporations under [these] legal reforms.”

Another hole identified in the Bill is that of the money saving aspect. Concerns have been raised by many that the calculations haven’t been done and that the cuts in legal aid and amends in civil litigation will cost more than they save. A report by King’s College London identifies that “these changes will incur new costs for the taxpayer by simply shifting the burden onto other parts of the public purse.”

In another academic report, Dr McIvor, Senior Lecturer at Birmingham Law School, accused the reforms of being “excessive and over-zealous”. She advised that “the evidence does not necessarily demonstrate that the primary source of the current high level of costs is the recoverability of success fees and after-the-event insurance premiums.”

What is also surprising about the Bill is the lack of joined up thinking in the government. With Clarke, together with his counterpart, Eric Pickles, continually following the party line about saving money (Guardian article: Eric Pickles: council tax rise a 'kick in the teeth' for cash-strapped residents), if the Bill is passed and legislation implemented then Council Tax will increase. The reason for this is quite simple. Unlike the present system where Local Authorities can recover their legal costs when they successfully defend a claim, under the new proposed system, they will not unless the case is deemed to be fraudulent or frivolous, which is extremely difficult to prove. This Bill is leaving Local Authorities will their hands tied behind their back. One the one hand they will want to defend cases, but on the other they know that if they do they won’t recover costs. Claims won’t reduce, so compensation payments by local authorities will increase, meaning only one thing, a cut in services or an increase in the Council Tax.

With the report stage to come and many amendments expected to be tabled by the Lords to all sections of the Bill, the fight is not yet over for those battling for and most importantly against the LASPO Bill.