BMC insurance is trusted by thousands of climbers and mountaineers to get them out of sticky situations. But the credit crunch means that travel insurance costs are rising across the board. The BMC insurance prices have gone up and there has been discussion on this in the UKC forums. Why have they risen? Are the new fees justified?
Several interesting questions have been put to BMC CEO Dave Turnbull such as this from Tom Briggs:
"Can you confirm whether or not BMC members' subscriptions subsidise the travel insurance policy?"
To which Dave answered:
"Not really Tom. Subs are separate, the BMC makes a % on each policy sold and this funds a fairly significant proportion of our work for climbers and walkers. Without this income we wouldn't be able to do anything like as much as we do at present - so it's really quite important."
"We were with our previous underwriters, Fortis, for about ten years. About six months ago they announced that they were considering withdrawing from our scheme, which meant we had to find a replacement with the help of our brokers, Perkins Slade. ACE soon emerged as the preferred choice and we've spent the last three months negotiating details.
This change of underwriter was triggered by a few trends and one-off occurrences over the last few years – some specific to the outdoors world, others an unavoidable consequence of the financial crisis.
Firstly, whilst most of our policies seem to have been priced about right we've had a few surprises and some of our cover has become unsustainably good value (i.e. cheap compared to other insurers). We've attracted inflated numbers of older people, snowboarders and people heading to North America and polar regions; claims for these categories tend to be expensive – hence the new loadings to reflect our recent claims history. In addition, we managed to hold our rates pretty much level for the last three/four years instead of raising them yearly; this has been good news for people over the last few years, but the downside is that the recent increase may seem relatively high. Having said that – to give a few cost comparisons of our most popular products – a 12 month European rock climbing policy has gone up from £107.78 to £117.60, and a 9 day European Alpine & Ski policy has increased from £45.05 to £52.50; so we're not necessarily talking big bucks.
Recent claims experience
Secondly, we've had several particularly large claims: a big bill for a rescue from Antarctica, several high-cost snowboarding claims from the USA and some sizeable hits from accidents on cruise ships. These claims weren't from our core members going climbing, hill walking or mountaineering, so we've addressed this by introducing a detailed questionnaire for polar regions, increased loading on snowboarding and by making it generally more difficult for 'non-mountaineers' to access our scheme.
Global financial crisis
Thirdly, and most importantly, the Travel Insurance sector as a whole is suffering the hangover of the financial crisis. The industry is anticipating significant price hikes across the board – but because of our annual review date – we're one of the first to introduce the new rates; we expect others will follow. The increases are driven by the weakness of the pound against foreign currencies – overseas medical bills become much more expensive when paid in pounds – and the fact that medical costs in the USA have been spiralling out of control even further.
So where does that leave us? Prices may have gone up but many of the key aspects and underlying principles of BMC insurance remain unchanged:
Fully comprehensive cover for reliability & peace of mind
No matter what happens to you, wherever you are in the world, you can rely on BMC insurance to get you home. Our cover is fully comprehensive and ACE is a quality set up with a long-term commitment to mountaineering. For emergency situations they use a company called First Assist. Our in-house insurance experts (Ray and Jim) have visited the First Assist operation and returned very impressed – if you get into trouble in the mountains, make no mistake, BMC insurance will get you home.
The BMC works for hill walkers, climbers and mountaineers, and in the current financial climate that's where we are refocusing our insurance – not on gap year trips or snowboarders. And, unlike other companies, we're still offering mountaineers cover in all countries and at any altitude.
Profits ploughed back into mountaineering
A key point in all this is that the profits from the insurance sales go straight back into our work – looking after climbers, hill walkers and mountaineers interests, and safeguarding access to the mountains. No other provider can make this claim.
BMC customer service – second to none
Finally, we're convinced that the BMC customer service and support team is second to none. If you've got any questions then please ring the office on 0161 445 6111 (9-5, Mon-Fri); you'll get straight through to a real-live person (Jim, Ray, Hannah, Clonagh, Arun, Simon or Lynda) who'll be able to explain all the details of the new scheme. Collectively they've got 77 years of experience working for the BMC so they 'know their stuff'."
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