It seems there is not an insurer in the land that isn't trying to encourage brokers to trade online from the big corporate beasts to the small independent underwriting agencies.
There are obvious cost benefits for insurers as it means they need to employ fewer humans to pick up the phone to answer broker queries and it means, in theory, that fewer man hours are spent on each policy.
There should also be benefits to the broker though. Dealing with any client costs money so when the broker is picking up, for example, 20% commission on a £200 tradesman's policy, it just doesn't make financial sense for the broker to be spending too much time with that client. Securing the cover from the insurer online with the minimum of fuss and time spent appears to be the answer.
This should also create internal efficiencies for brokers. If staff are spending less time chasing up quotes and claims by phone, that means they can be redeployed to alternative, revenue generating roles in the company. The efficiencies created by online trading should, in theory, enable brokers to grow their business. It should allow them to spend less time on administration and to get back to what they do best - broking.
But there still seems to be resistance in the broking sector to online trading. Brokers are adamant that dealing with clients face to face is the best bet and they are right. Building and sustaining a relationship with the client is one of the key roles of a broker - the other of course is finding the right cover at the right price.
I think they are missing a trick though. Online trading must make sense for certain classes of business like motor and smaller SME business. To conduct this kind of business face to face and via the telephone just doesn't make financial sense to me.
It seems to me there is something of an impasse here between insurers and brokers as to the value of online trading. Insurers seem to be convinced; brokers less so. I suspect it could be a generational thing with brokers but then again I could be wrong. There seems to be a lot of interest in social media among brokers so they are obviously willing to engage with advances in technology. Perhaps it is more about the mindset of individual brokers - some will engage with online trading while others will stick to their tried and trusted methods.
If insurers are expecting there to be a sea change in broker attitudes to online trading, then it would not be advisable that they hold their breath - I know of brokerages that don't even have a website.
Change will come, of that I'm convinced but how and when is the big question.
There is one question that keeps nagging me and I have no answer so I would love to hear your opinions: are brokers that insist on face to face broking for all their clients and using the phone to source quotes destined to die out or are they the ones that are keeping the true spirit of broking alive?
Read the latest issue of Insurance Age here
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