Our Head of imarket, Simon Bloomfield, shared his insights delving into why e-trading makes sense for brokers and insurers in his recent article for Open GI:
Over the last 10 years we have seen the level of Commercial Lines business traded from broker systems through imarket increase five-fold to now more than 500,000 policies annually and around £400m of GWP.
There are lots of reasons why we have seen this occur:
Let’s break these down a bit further:
Many years ago, Polaris did a study with brokers where we validated the amount of time a broker would spend searching the market for a new quote. While broker systems like Open GI may pose more questions than an individual insurer’s extranet, inputting data across multiple extranets is time-consuming and the time saving from their broker system could be put to better use.
I recognise that not every customer’s needs will be met from the panel on your system. However, most’s will be, and for some marginal cases, being able to evidence when the market is not prepared to quote isn’t necessarily a wasted effort. If the customer wants to know why the more specialist markets are being considered, it is easy to demonstrate.
Not every quote will give immediate terms the first time, and as we see the market increasingly looking to digitally trade more complex business, we will see referrals increase, but that’s something to welcome. A temporary intervention at the quote stage to ensure a risk is understood by the insurer will typically mean subsequent transactions for mid-term adjustments or renewal will be more straightforward.
Equally, for a broker being able to get documentation immediately and being able to close off the case with their customer quickly reduces the need for adding this to their ‘to-do’ list.
Polaris brings insurers and brokers’ systems together to establish standards for each digitally traded product class, such as those integrated with systems like Open GI. This is less critical for a niche product with one carrier, but for more widely traded products, like Tradespeople and Property Owners, it’s important that we have a market agreed question set so there is consistency in what brokers ask their customers and what insurers provide.
Brokers working on their Open GI system are asking one set of questions to get multiple quotes. We know that insurer extranets questions may be asked differently to reflect different insurers’ risk appetites and therefore a broker would need to be confident they had accurately answered the questions on different platforms or risk possible detriment to the customer at a later stage.
Another way that Polaris has helped is by working with the insurer community to create a consistent Live-Chat solution, used by six major insurers. This means if you aren’t sure as a broker, you ask the insurer to clarify, straight from the Open GI system, with the chat routed to the right team within the insurer. What helps with contract certainty is that the broker gets a transcript of the chat at its conclusion, so there can be no confusion over the point queried.
We all know that historically waiting for a manual quote to be returned from different insurers was a painful exercise. Equally for the insurer working out how to spend their finite underwriting time to maximise the chance of securing the business can be a challenge and may mean not every quote is responded to.
It is a simpler process for the market now when so much business can be quoted through platforms at any time.
Earlier, I mentioned that Polaris now see over 500,000 policies traded through imarket each year and this growth shows no signs of slowing down. In Polaris, we recently spent over £1.5m upgrading imarket to ensure it is fit for the next 5-10 years of digital trading growth.
Equally, we know that some brokers are making their products available directly to their customers and digital trading is a great enabler of that process. A word of caution is to ensure that when a broker does this, they make sure that the insurer is aware and recognises this method of trading. As an example, it might be sensible when a customer wants £10m public liability cover for an insurer to offer a broker £5m, as the broker can then source the other £5m through XoL, but would a consumer spot this if this was returned on a broker website? I am certainly not saying don’t do it, but the level of explanation needs to be much higher on a broker’s own website than on a system a broker uses.
The benefit of using your Open GI system for comparing quotes is that you can see side by side how different terms and conditions from insurers compare to what the customer requirements were in the first place.
That makes it much simpler to have a discussion with your customer about whether to go for the cheapest quote, which may have less cover, or a more expensive option that may have better cover. Critically, it takes your discussion with the customer into best value, which ultimately is what meeting customer needs is all about. It will also be simpler to check the market at future renewals as the data is already in your system.
The broker also has available details regarding the basis of their advice. I’d imagine that doing this across multiple extranets, aside from the time spent and the different questions used, would add to the complexity of the role a broker performs for their customers.
What we always have in this market is a chicken and egg situation, where an insurer is looking at their finite change budget and making decisions about where they will get the best return on their investment. We have seen that the more products there are on a system, the more brokers are likely to use that system, and equally the more likely insurers are to deploy additional products to that system.
So, to get the benefits I’ve outlined across your product range with your chosen carriers, vote with your keyboards. Use your platform and you start a snowball effect. I’m sure this will take time, but why wouldn’t a broker want these benefits, which won’t even cost them any more money, as it is part of the broker system they already use.
Read the article on Open GI here
