Reportage - specialist products: How practical is it to sell specialist cover on the web?

In a 2009 survey, one broker, when questioned on the need to develop specialist commercial insurance online for the care and charity sectors, responded: "It would be the best thing since sliced bread." Although not quite to the same degree, the sentiment was echoed by a large number of brokers dealing with complex commercial insurance and the lengthy quote-to-purchase process at the time. One year on, and a great variety of commercial products are already available or are in development for web platforms.

Online commercial products are not a recent invention but, until now, the majority has been standard cover for small to medium-sized enterprises. Although perfectly adequate for many businesses, it doesn't meet the needs of more specialised organisations such as charities, care homes or commercial heritage properties. A product that fits the bill for a small corner shop, will certainly not offer sufficient cover for a care home with a large number of residents and staff. It therefore goes without saying that such specialist risks need specialist cover and products. But is it practical to make this insurance available on the web?

Success stories
Developing online products for diverse sectors with an abundance of specialist needs is not an easy task but it's certainly not impossible. The initial success of such products has started to prove the online trading sceptics wrong.

Even in sectors as varied as charity and care, it is possible to identify common risk themes and similarities in requirements. This results in an online product, with some optional covers, that meets the needs of a large number of organisations. In sectors like charity it will, of course, never be possible to provide insurance for every organisation due to its complexity, but online products can certainly create some efficiencies for a large number of groups and the brokers they work with.

In terms of feasibility, there is no doubt that online products and trading platforms offer brokers and customers greater flexibility, speed of service and more control over the whole insurance-buying process. And there are individual benefits for all parties involved.

The efficiencies for customers include less time spent filling in forms and going through responses to find a product that meets their needs. Additionally, online products enable faster quote comparison and allow customers to receive their insurance documentation at the point of purchase.

For the broker, the benefits of online trading are just as clear-cut and could be a major contributor to winning business in today's competitive market. Online trading platforms enable brokers to turn quotes around faster, meaning customers are more likely to do business with them. Round-the-clock self-service quote facilities give brokers more control over when quotes are obtained and online platforms allow brokers to provide customers with their documentation there and then. This means brokers are able to conclude business with customers much faster, leaving them more time and resources to deal with larger and more complex cases that are not suitable for online platforms.

For specialist insurers, one of the key benefits is the increased quoting ability through an instant electronic system. Similar to brokers, insurers' time is also freed from quoting less complex risks, allowing them to underwrite bespoke ones that don't meet the criteria for online trading. With some back-office functions also passed on to the brokers, the insurers are able to return the cost savings to brokers in the form of enhanced commissions - completing the win-win circle for the whole customer-broker-insurer relationship.

Just one option
Not everyone, however, has instantly embraced the new products on the market. There are naturally those out there that question the value for money and benefit of specialist commercial insurance online and it will be the task of niche providers to assure them of the quality of such products and services. It will also remain their responsibility to ensure brokers and customers know that online products are not there to replace bespoke offline cover. The message needs to be clear that online is only one possible distribution route for products on the complex insurance landscape and insurers will continue to provide a variety of trading options that meet the needs of all their customers.

Online specialist commercial products have a market today and they will be increasingly in demand by brokers in the future. Insurers will need to find ways to develop their products in line with these changing demands to remain competitive and meet the diversifying needs of the broker community. The number of products available online is growing rapidly and ones that even a few years ago seemed impossible to develop are now fast securing their place. Making specialist commercial insurance available on the web may not transform how the entire market functions but it will certainly make buying it an easier task for many.

Ian Wainwright is broker sales director at Ecclesiastical Insurance

Find the latest e-business news at broking.co.uk.

Source: Insurance Age – August 2010