Survey: Rebuilding trust in commercial combined

Commercial combined etrade was meant to simplify placement. Instead, brokers say rigid systems, slow referrals and automated declines are making one of the market’s most important products harder to trade. Martin Friel reports.

Commercial etrade was supposed to make placing risks quicker, cleaner and more accurate. For many products, it has done just that, but a growing number of brokers say the journey for commercial combined is uneven, with systems that promise efficiency often magnifying complexity.

To understand where etrade is letting them down, Insurance Age, in a survey commissioned by Dual UK, canvassed 150 brokers across the country, reflecting activity not just from nationwide brokers but from regional markets including Scotland, the Midlands, North West and South East. The headline results show that slow insurer service and automated declines are the biggest frustrations for most (57%), while almost half (49%) highlight a lack of insurer flexibility, and a third describe the whole process as being ‘quite difficult’. 

Commercial etrading has evolved since its advent in 2005, but broker confidence has not kept pace, especially in a product as broad and nuanced as commercial combined. It remains one of the cornerstones of the UK broker market, covering a significant proportion of the economy – everything from manufacturing and construction to motor trade and real estate – but this breadth is also its challenge. 

A cornerstone product

For Lee Tetley, managing director for SME at JM Glendinning, this complexity makes full digitisation difficult. “It is a mainstream product, but when you pick it apart it is a complex product and I don’t think it lends itself well to etrade,” he says.

“More modern business practices, such as remote work, shared premises and digitised operations have left many commercial combined wordings and processes looking a little dated. Trading it online only really works when you have a general or more traditional business.”

This is reflected in the proportion of commercial combined risks that brokers place online – just over half (53%) place between 11–50% online, while only a fifth (21%) manage to place up to 75% of their commercial combined business via etrade channels. Tetley says his own reliance on etrade is a lot less than 50%, and the rigidity of systems is a key reason for that.

“I understand the desire to use drop-down answers, but many times you would like to detail a specific feature of the risk,” he says. “But the minute you do that, more often than not, it creates a referral.”

The referral ‘black hole’

The referral process is often where the etrade approach falls over, but brokers are wary of trying to force a risk into pre-determined boxes: “You could run the risk of non-disclosure that way, but they have built a system that doesn’t want a fully fledged, nuanced disclosure,” Tetley explains.

Lee Davey, executive partner for SME and schemes at Partners&, sees the same tension across his national footprint.

“Etrade is fantastic until it isn’t, and it is often rigid and context blind,” he says. “But an underwriter can process the nuances in seconds. Without empowered underwriters behind the scenes, brokers will just go round the systems looking for the right answer and that can result in misrepresentation of the risk. I think the industry has lost the art of conversation to a degree.”

More than half of brokers surveyed told Insurance Age that slow turnaround times are a major problem, with Tetley saying the referral process can be like entering a “black hole” where response times take anything from 30 minutes to two days. And as Davey points out, this doesn’t only create frustration for brokers, it creates churn in the market: “If you can’t get an empowered underwriter quickly, you will move on to another insurer, and insurers are quietly losing business this way.”

Our service delivery is what sets us apart from competitors, so declines and slow responses restrict us as brokers.

Janine Packman, Tricketts Insurance Brokers

Automated declines are another top frustration, as they often shut down cases an offline underwriter would willingly consider. Tetley describes a familiar pattern: “Some insurers will decline on etrade but not make it clear that they expect you to ring and speak to an underwriter. When you meet someone from the insurer in the real world, they may say we should have called them as they would have underwritten that. But the stance on declines differs for every insurer, which makes it difficult for brokers to know which way to turn.”

And Tetley isn’t alone in this. Simon Bennett, commercial director at BDH Group says: “In the past, once a case was declined automatically, the decision was final. There does now appear to be some inconsistency in insurer messaging with some advising they are open to trade and are reviewing automatic declines.”

Janine Packman, managing director at Tricketts Insurance Brokers, describes automated declines, which are “often generated from system quirks, errors and differences in how insurers collate information” as “laboursome and time-consuming” to correct or refer, and can reflect badly on the intermediary. “Our service delivery is what sets us apart from competitors, so declines and slow responses restrict us as brokers,” she says.

Signs of progress

Despite these widespread frustrations, progress is being made. Lisa Toms, branch director for SME at Howden, reports service improvements when insurers back their portals with real people.

“All the easy stuff has been digitally traded for the last few years now,” she says. “The more complex stuff – much of which sits in commercial combined – is what we have left and our strategy is to get as much of it as we can traded online.”

Her team currently places around 39% of these risks digitally, but if they are to reach their ambition of pushing that figure towards 70–80%, there will have to be some fundamental changes to the way this product is currently traded online. And it would appear that change is afoot.

“Some insurers are setting up underwriting teams behind their systems and, while it’s not perfect, we are heading in the right direction. Historically, the lack of flexibility on these platforms was a big issue, but we have educated our teams to understand how each insurer approaches these risks and how their processes are built, and we’ve found that insurers are becoming more open to receiving more information.”

Pricing and coverage

The results of the survey reinforce the importance of these developments. While brokers rank price and breadth of cover as their highest priorities when trading online (both 77%), direct access to underwriters (45%) and underwriter empowerment (29%) are still hugely important considerations. Like insurers, brokers want to harness digital efficiency wherever they can find it, but they also want judgment, conversation and timely human engagement.

As Tricketts’ Packman says, “I like an open-minded approach with a desire to understand and write business, rather than one ruled by the parameters and restrictions of the computer, which often says ‘no’, or an underwriter who delays making a decision by asking additional questions [unrelated] to the risk exposure, only to then decline. A quick yes or no allows us to either pursue or move on to a new market and reduces time-wasting”. 

While many insurers may struggle to deliver on these fronts, MGAs score more highly, with 17% of brokers rating MGA service as ‘excellent’ compared with just 6% for insurers. One MGA – Dual UK – has taken the position that human judgment is essential if effective and consistent service is to be delivered in commercial combined.

The MGA has deliberately positioned itself in what it sees as an underserved mid-corporate gap – typically firms with premiums of £10,000 to £50,000 – where risks are too complex for etrade but too small for the full corporate treatment. Managing director of P&C and Social Care, James Ramira, believes the market has inadvertently created a no-man’s-land where risks are slipping through the cracks.

“Etrade is difficult for commercial combined and I don’t believe in trading this product in this way,” he says. “When you see small wrinkles within any risk, it has to come off etrade. If you are above a certain revenue size, it has to come off etrade. So there is a gap between etraded vanilla risks and full corporate underwriting, and it’s underserviced.”

We are focused on delivering a service-led proposition, driven by empowered underwriters who are accessible to brokers.

James Ramira, Dual UK

Dual UK’s answer is a consciously traditional approach – empowered underwriters, regional offices, and a high-touch service model.

“A broker can quickly get an answer from us,” Ramira says. “Whether that’s a yes or a no, you communicate it clearly and you do it quickly.” He stresses that this is not about rejecting technology, as Dual UK has invested heavily in rating tools, data ingestion and case management, but human underwriting judgment remains central to the proposition: “I don’t see how everything can be etraded,” he says. “The risks are going to get more complex and I think systems are going to start to struggle more and more to manage them.”

Dual UK’s approach is supported by a growing presence in the regions, as Ramira explains: “We are focused on delivering a service-led proposition, driven by empowered underwriters who are accessible to brokers. We are bringing that proposition to more and more brokers across the country, with operations in Bristol, Manchester and London, and we will branch out further in the future.

“We want to be really close to those regional brokers to service them properly and ensure we can support them in winning the business they are targeting.”

Brokers highlighted persistent coverage gaps in certain areas such as flood, storm, business interruption, cyber and construction risks. Tetley thinks part of the issue lies in translation as every insurer has created a question set that conforms to their appetite for specific risks.

“That can work well on their own trading portals but when they go on one of the software houses, they have to make their question set align with the majority, and that is where systems can start to distort insurer appetite,” he says.

BDH’s Bennett sees a similar issue with trade classifications: “Standardised trade lists can be restrictive,” he says. “We’d like to see more trades available, the ability to enter multiple trades, or even provide our own descriptions to better reflect diversified businesses.”

Tricketts’ Packman finds certain sectors more troublesome than others. “Most risks can be placed, however not necessarily competitively. Woodworking, waste, plastics, food manufacturing and any properties with composite panels are always challenging to place competitively,” she explains.

A hybrid future?

While broker frustrations with etrade are real and often entrenched, the resistance isn’t to the technology but to how it is applied. They want digital tools to work as they are designed to and they want those tools supported by responsive people, flexible underwriting and systems that can capture nuance, rather than suppress it.

As Ramira argues: “Regionally, every broker is just happy to speak to an underwriter. They want to talk to people, and the ability to do that sits at the heart of our proposition.”

Commercial combined is too varied, and too dependent on understanding how businesses operate, to rely solely on automation, so a hybrid model now seems to be the way forward. Digital for speed and handling the straightforward risks, and empowered underwriters for the complex and the unusual.

The firms that successfully combine digital efficiency and technical expertise are the ones that will be able to rebuild confidence in commercial combined, and create a trading environment that matches the expectations of modern brokers and their clients.