Hitachi Capital’s brokers are treated as equal partners
MORTGAGE STRATEGY - 16TH JULY 2007
I was interested to read Simon Burgess' unusual take on our contract negotiations as expressed in his recent letter (Mortgage Strategy July 2).
Maybe this is not surprising given that our mortgage payment protection insurance is probably the best value in the market and the fact that Burgess approached us to talk about becoming one of our product re- sellers.
To put the record straight, there is a distinction between brokers who deal directly with Hitachi selling our product face-to-face to their customers and a company such as Britishinsurance.com which sells both directly to consumers online and also acts as a re-seller - in effect a wholesaler, selling our product on to mortgage brokers.
Our legal contract with re-sellers is different from the one we use when dealing directly with brokers. A re-seller's contract is bespoke, reflecting the additional work it does on our behalf such as collecting premiums, issuing policy documents and conducting mid-term policy adjustments.
As with any wholesale relationship, Hitachi is by its nature once removed from brokers selling mortgage payment protection insurance to their clients. We therefore have a duty to protect consumers and our introducing brokers from contractual breaches that might be committed by re-sellers. Our contracts reflect this.
As each contract is bespoke, it will usually be subject to negotiation and revisions before each side agrees on the final wording and signs it. But in this instance we did not get past the first draft because Burgess seems to prefer conducting contract negotiations via the media.
With regard to the concerns raised in Burgess' letter, let me be transparent and assure all our brokers that they are treated as equal partners.
Our contracts state that ownership of customers remains with introducing brokers and we will pay commission while policyholders are with us.
We welcome brokers giving appropriate advice to their clients on the suitability of our product.
I will be providing Britishinsurance.comwith copies of our standard broker contracts which should put Burgess' mind at ease.
Steve Lawler Divisional managing director Hitachi Capital Insurance Europe By email
