Ahead of a week-long ‘Polaris at 30’ series Insurance Age caught up with managing director Vivek Banga to run the rule over the history of e-trading developments and what is coming next for brokers.
Polaris was founded in 1994 with digital trading platform imarket rolled out by the insurance industry-owned organisation in 2004. Banga took up his post in early 2019. With over five years in the role and a CV full of digital expertise from both sides of the broker and insurer fence, including at Gallagher, Brit and NIG, he is ideally placed to reflect on the changes over the decades.
He recalls commercial lines extranets beginning to emerge 20 years ago. “Debates such as extranets versus software houses picked up about 15 years ago and it’s interesting that it is a topic that is discussed even today,” he said.
“E-trading focused roles were getting created and a small community of like-minded people working on these developments was emerging.”
In 2023 a total of £394m in premiums were placed through imarket, up 21% year-on-year, as policies broke through the half a million barrier.
It may now be of considerable size but Banga acknowledges that initially there was widespread scepticism about e-trading, especially on commercial lines.
He said: “It had to do with the number of risks that could be electronically insured, the lack of homogeneity, which would make rating models unworkable and the role of broker advice.
“There was also a perception that a better rate could be obtained by brokers by negotiating with insurers manually.”
In his view mainstream brokers pushed hard for the adoption of e-trading and the dial gradually began to shift, with personal lines going electronic first.
“By the mid-noughties those left behind were already becoming the outliers,” he said.
The evolution of e-trading has been constant and continues to this day.
Banga said: “In the last five years, we have seen increasing rating sophistication, rating of ever more complex business, the growing use of machine learning for rating algorithms, APIs making the integration and usage of third-party data sources easier, and simple, trading facilitating technology like our Live-Chat service making a big impact.”
In 2022 use of Polaris’s Live-Chat service, which allows brokers and underwriters to exchange extra information about a risk and keep it within digital placement platforms, leapt by 16%.
Last year the growth accelerated again with a 25% hike in chat volumes to 296,821. He said: “Cloud-based computing is also increasing capacity and security.”
The Polaris boss believes consolidation has definitely supported the growth of e-trading so far, especially in commercial lines.
“As brokers have grown through M&A, they have become more focused on streamlining their processes and benefitting from the operational efficiencies that e-trading invariably brings,” he assesses.
“Tech developments have made it possible to become more ambitious both on how and what is traded electronically. Regulation plays a role too and compliance is easier to demonstrate digitally.”
In the 2023 calendar year Polaris invested £1.5m in imarket and over £1m in ProductWriter. And, he suggests, if anything, the evolution of e-trade is speeding up.
“We’ve moved from carbon paper to where we are now in 30 years,” he said. According to Banga the changes over the next 30 years “are likely to be just as seismic”.
That is not to say there aren’t frustrations in the market. Brokers often bemoan a ‘computer says no’ outcome in dealings with insurers. “Perhaps because our industry’s e-trading environment has been around for a while now, getting numerous systems to work together has not always been an easy task,” Banga said.
“Perhaps because our industry’s e-trading environment has been around for a while now, getting numerous systems to work together has not always been an easy task,” Banga said. “The burden of legacy systems is real, especially when books and brands are merged through consolidation. There are also cost barriers to the deployment of new products, which can create an artificial ‘glass ceiling’ on insurers’ distribution ambitions, and limit how much is traded and in what manner.”
Delving into the aforementioned acceleration and “seismic” changes Polaris expects market usage of its Standards and rating engine ProductWriter to remain high – and that it will continue to be shaped by the industry via its advisory groups. “Meanwhile we expect trading volumes via the imarket gateway to continue to grow, supported by our fast growing Live-Chat service,” Banga said. “We expect the boundaries of e-trading to keep getting expanded both on complexity and average premium of what is being traded.
“Most of all though, we expect to continue to do what we’ve done over the last 30 years – to support the market in trading digitally more effectively and efficiently. We evolve with the technology, with our clients, and with insurance customers.”
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