Exploring the e-trading landscape: The role of insurer extranets

Every major insurer today has its own extranet portal giving brokers the option to go directly to the underwriter. Although the benefits of e-trading through broker management systems are many, insurer extranets are still growing significantly, with insurers and software houses working closely to provide extensive panel products.

In fact, according to the Insurance Times eTrading Survey 2020, 40% of brokers believe that both e-trading routes will remain dominant in the near future.

So what is the role of broker portals in today’s e-trading landscape?

We are pleased to present the second instalment of our blog series to explore the landscape of e-trading through insurer extranets. Follow us as we dig into the role of broker portals today, analyse the characteristics of a great extranet and look at what the future holds for broker portals.

Is there room for insurer extranets in the modern e-trading landscape?

The imminent demise of the insurer extranet has long been reported. Logic dictates that brokers will switch to comparative trading via software houses rather than trade directly with each insurer.

And yet, the online broker portal continues to play a pivotal role in the e-trading landscape. In fact, we have seen the GWP traded through insurer extranets grow by an average annual rate of over 25% for the last 5 years.

Insurer Portals Premium Transacted

So why do insurer extranets defy gravity?

It is tempting to think that brokers are creatures of habit and keep using insurer extranets above other options simply because that is what they have always done. This is a popular belief but the evidence doesn’t back this up. In fact, where brokers have the opportunity to access an effective panel through their software house, we have seen them enthusiastically switch channels to reap the efficiency benefits.

Instead, the biggest reason is simply that many brokers do not have access to these comparative panels. Either their current software house does not have mature comparative e-trade panels for their markets or they aren’t using a software house at all.

Another key reason is that the volume and breadth of electronic trading is increasing rapidly. A rising tide lifts all boats, but the effect goes slightly beyond that for extranets.

As insurers tackle electronic trading for new product classes or experiment with existing classes, their broker portals provide the perfect channel to innovate outside of the constraints of a comparative panel.

The best insurer extranets provide an easy and efficient way to trade with insurers. They are not going to disappear any time soon.

“Fast Trade is a key platform for Aviva. We recognise the importance of the extranet channel to our brokers and continue to invest, year on year, to provide our brokers with an ever-improving fast, intuitive, reliable and secure way to trade with us” says Derek Cowie, Digital System Manager, Commercial SME at Aviva, on the importance of Aviva’s broker portal.

What makes a great insurer extranet

Not all extranets are created equal. The best broker portals have features that make a broker’s life easier and allow easier communication with a real underwriter. And we have been able to get it right often.

Acturis built, hosts and maintains 9 out of the top 10 broker portals ranked in the 2020 Insurance Times’ eTrading report. In fact, our partners Allianz, Aviva, Home & Legacy, NIG and QBE had a clean sweep on the shortlist for best insurer extranet at the Tech & Innovation Awards 2020, won by NIG’s The Hub.

For outstanding results, you start with an intuitive design. Many brokers will use an insurer’s portal just once or twice a month, so it needs to be clear and easy to use. Potential obstacles come as early as which product class their customer falls into.

A good portal will guide the broker through the journey, whilst making the right information and the right tools available to the broker when they need it.

The portal must be intuitive. If a broker tries a portal for the first time and gets stuck, they won’t return any time soon. On the other hand, if they find it quick, easy and get a good quote, then they will be back again and again.

Hayden Parra, Web Development Director, Acturis

The user journey must be quick and efficient. The best portals will use intelligent forms and external data enrichment to minimise the number of questions that the broker needs to answer. For complex cases, quick indication functionality to inform the broker early on whether the insurer will be able to quote can be a huge time saver.

A good insurer extranet offers much more than just a quote engine. The broker should be able to self-serve mid-term adjustments and renewals, as well as round-the-clock access to documents. It is hard to reap efficiencies from e-trading if you have to pick up the phone as soon as there is a client change.

Finally, it is important to remember that the broker portal is essentially a channel for communication with the insurer. As such, there needs to be support available when you need to speak to a human.

Whilst there are few things more frustrating than an un-manned web chat, a well-supported web chat can be a huge benefit here. Likewise, prompt and clear handling of quote referrals is key and the insurer must have the systems and processes in place to make this as easy as possible.

What does the future hold?

Brokers will naturally lean towards insurer extranets that offer them the best products and most efficient services. As such, insurers will continue to up their game to compete for brokers’ business.

We are already seeing extensive use of third party data enrichment to reduce question sets and improve the accuracy of underwriting. Expect to see this become ubiquitous and to extend into new product classes, delivering efficiencies for both brokers and insurers.

Alongside shortening proposal forms, this data-rich approach will allow insurers to offer coverage much more tailored to the customer. This will include flexing cover limits to match the customer’s needs, tackling under-insurance, and automatically offering relevant upsell and cross-sell covers.

Insurers will make use of artificial intelligence in their referral handling process. At first this will dramatically shorten the waiting time, then it will allow many referrals to be avoided altogether.

Finally, expect to see the scope and breadth of product coverage on broker portals to increase relentlessly. As the sophistication of e-trading increases, it will be possible to bring elements of automation to classes of business previously considered niche or too complex.

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Exploring the e-trading landscape: The role of insurer extranets