01 August 2005
By John Jackson
There have been a number of e-commerce initiatives in the general insurance market in recent years, some more successful than others, but imarket, run by Polaris and which is free to brokers, may prove to be more significant than most.
Backed by six insurers and supported by seven software houses, the system, currently largely for commercial lines products, allows a broker to trade direct from the back office system of its software house straight into an insurer and get quotes and immediate cover in real time for package-type risks.
More complex risks, for example commercial combined, may require an underwriter's judgment, but even here the process is quicker and slicker than on paper, and avoids multiple keying of data.
There was a major breakthrough last month when insurer Groupama and software house Acturis became the first to become integrated into imarket to prove that it works. But too many insurers and brokers lag behind the technology required for the platform.
A big advantage of imarket is that data need only be entered once - by the broker - providing much more accurate documentation, a bugbear for brokers down the years.
According to Acturis, 34% of premiums are spent on policy transaction costs, nearly half (46%) of documents sent from insurers to brokers have errors and 30% of these errors remain uncorrected. The average commercial policy takes 164 days from continuation to cover to the final policy issue date - an appalling performance record.
The ball is very much in the court of insurers to provide an attractive array of products. Unfortunately, for many of them, too many commercial products are still paper-based. This is not what brokers want. But brokers, too, have their part to play - only 8% of quotes they send are via email - unbelievable!
High street brokers are proud of their face-to-face dealings with their customers, but a generation of people to whom Blackberries, iPods and the latest mobile phone gizmo are part of their normal lifestyle are now looking around for insurance.
Customers expect high technology from their broker, competitive products, quick decisions and good customer service. The early indications from imarket are that this is what will be delivered. It is still early days, however. Many more insurers need to come on board, and the system will have to be tested in the personal lines market.
But momentum is building - I hear from an industry source that another insurer has joined imarket and that three others are in an advanced stage of discussions. For the major commercial classes this gives imarket about 80% of market capacity. And already, for personal lines, the system provides electronic cover notes.
Imarket can also help in other areas, for example accounts reconciliation and claims tracking. The only real limit to the potential of this sort of technology is imagination.
Brokers have indicated that they are very keen to go down the integration route, and are impatient to embrace the technological changes. Whoever said insurance broking is dead?
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