Do you know what an insurance AR is?  Well, if you are a worrying about impacts to your income as a property managing agent, following changes to insurance sales regulations, it could pay to find out.  You could consider selling insurance in-house, using Gauntlet’s AR appointed representative option.  This article tells you how.

Property managing agents may be feeling the pinch sooner rather than later.  The rewards earned from having a relationship with a insurance broker, one who was willing to divvy up their commission in return for referred work, is likely to end. The new ‘permitted insurance fee’ on which the Government is consulting, could lead to a significant income drop for property managing agents.

But as one door closes, another can open, if the property managing agent is astute and willing to invest in a new way of doing things.

Selling insurance in-house as an AR (appointed representative)

A property managing agent could actually create their own insurance division and offer better value insurance options to the leaseholders they handle.  By earning a fair and not exorbitant commission, placing business directly with an insurer, they could continue to generate income from insurances, in a totally honest way and also in a manner that best serves clients.

To do this, the property managing agent would need to appoint a fully trained insurance salesperson, who understands rules and regulations applying to insurance and who also has the technical expertise to select the right policy for each client.

But, of course, that individual needs to be regulated, as this is a financial services transaction and in a sector regulated by the Financial Conduct Authority (FCA).

For that reason, there would need to be an ‘authorisation’ for the insurance salesperson to transact insurance on the property managing agent’s behalf.

How to authorise your own insurance salesperson quickly

Gaining direct authorisation from the FCA would be costly and time-consuming,  Even if that were achieved, the volume of business going through the books might not be sufficient to attract insurer agencies and then the objective of offering real choice to leaseholders and tenants would not be achieved.

Luckily, there is a very easy way to meet the goals of the property managing agent, in terms of not losing insurance income, but also satisfy the requirements of leaseholders, who want fairly priced insurance and a range of products from which to select when deciding how best to have their property safeguarded.

The answer lies in having the insurance salesperson become an AR  (appointed representative), working under the FCA authorisations of an AR principal.  They become part of the principal’s network and abide by its compliance procedures.

How the Gauntlet AR Network stands apart as an AR principal

If this is done through the Gauntlet AR network, there are tangible benefits.  Gauntlet is unique as a network, having its own direct sales team and being a commercial insurance broker in its own right.  Its direct sales team is heavily involved in commercial property insurance, so able to mentor and nurture any AR wanting to focus on this sector.

Having a direct sales team, as well as AR brokers across the country, means that Gauntlet’s buying power with insurers is significant. It benefits from excellent rates from insurers, which translates into highly attractive premiums that could be passed on to leaseholders.    In addition, it has access to over 200 insurers and facilities, which means that the box of leaseholder policy choice can be well and truly ticked.

How would this insurance arrangement work for a property managing agent?

The property managing agent would not need to create any cost centres around the employed appointed representative.  All administration, compliance, accounting and IT, not to mention professional indemnity cover, is provided by Gauntlet.  The AR arrangement sees Gauntlet and the appointed representative business splitting the commission earned on transactions, which would leave the property managing agent with more than enough income to be satisfied with the arrangement.

Gauntlet’s managing director, Roger Gaunt, says, “We know many property managing agents will have concerns about the financial losses they will incur when they cannot earn money from broker partners.  By looking at things differently, appointing an in-house insurance sales-person and having them operate as an appointed representative, they need not relinquish income in the way they fear.

“The arrangement can provide leaseholders with much more competitive premiums than they have been used to, plus a wide choice of options, so it’s a win-win for everyone, just as the legislation intends.  We expect to be talking to a number of astute property managing agents in the near future and welcoming new appointed representatives who are working in the property sector.”

Once on board, the insurance salesperson would be able to tackle any sort of insurance business that made sense, looking potentially beyond the current client/property portfolio and at different types of cover that could be sold to any business or individual.  It can become a profitable in-house income earner.

If you are a property managing agent wishing to discuss the possibilities of this part of the AR (appointed representative) opportunity with Gauntlet, please email RogerGaunt@GauntletGroup.com

Photo by Tierra Mallorca on Unsplash