Survey: What direction should commercial and agricultural insurance e-trading be taking?

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Brokers explain how providers can improve the commercial e-trading experience for a survey conducted by MS Amlin and Insurance Age

Twenty years ago, commercial e-trade was but an idea, a dream of how this market could operate more efficiently and effectively. A better experience for everyone.

Today, that dream has been realised only in part, as the response to the Insurance Age e-trade survey shows. But while significant progress has been made towards fulfilling that early potential, tensions and limitations remain at its heart.

To gauge the state of the traditional commercial e-trade market today and to understand how it is faring in more complex sectors, Insurance Age asked brokers across the country to critique their experience of commercial and agriculture e-trade.

The research shows that insurer e-trade platforms are delivering for brokers but there is still some way to go in striking the right balance between the competing factors at play – speed, accuracy, breadth of appetite, service and, of course, affordability. 

But when asked to rank the most important factors when placing an e-trade risk, there appears to be a distinct difference in broker priorities between the commercial and the agriculture markets.

Differing priorities
For commercial risks, breadth of cover, lowest price and ease of use of the e-trade platform were the top priorities with claims service coming in fifth. In contrast, in agriculture, claims service, breadth of cover and access to knowledgeable underwriters were cited as the top three ‘must haves’ with price coming in joint fifth.

“That doesn’t necessarily surprise me,” says Terry Poulter, senior motor underwriting manager at MS Amlin.

“Farmers rely heavily on their vehicles to make a living and you have to have a claims team that understands that industry, how they work and how they submit claims.”

Debbie Airey, CEO of CCIB Country and Commercial Insurance Brokers, agrees but suggests insurer claims services aren’t matching the front end digital process which may account for its higher ranking.

“The biggest problem in our sector is the motor claims,” she says.

“It’s the complexity of the equipment – you can’t just take a combine harvester to your local garage and insurers could be doing more to improve that service. They need to go more digital in their claims, allowing customers or brokers to send in photos and videos for example.”

But it would be misleading to look at the results and assume commercial brokers don’t care about claims – they do, but its lowly ranking probably says more about the competitiveness of this market than anything else.

“It has always been price driven but more so now,” says Catherine McCoy, package underwriter for SME at MS Amlin. 

“There are more online markets and it is even more competitive because of the state of the economy with everyone looking for that super deal. You can lose a risk for £100,” she adds.

But for some brokers, it is hard to choose what is most important. Everything is a priority.  

“You could probably take four out of the top five and score them equally,” says Gallagher’s MD of small business and personal lines, Gareth Birch.

“When we are selecting insurers for the panel, all of those priorities would be weighted equally. If you want to build a long-term relationship with clients, you have to deliver on the promise that you have made. We wouldn’t work with an insurer that is full on price and cover but limited on claims.”

This ‘everything is a priority’ attitude comes through elsewhere in the research. Reducing human contact to speed up the process is vital to brokers, but they also want the personal touch and contact with underwriters when they need it.

Need for speed

In agriculture, 25% of respondents are getting a quote back in under 10 minutes, which seems pretty good going. But for a full 50%, it takes between 10 minutes and an hour to get a quote and for 17.5%, that wait is longer than two hours.

The picture is quite different in commercial with the vast majority, over 80%, getting a quote in under 30 minutes with one broker managing to secure a quote in under 60 seconds. A mere 5% are experiencing a wait of over two hours in this sector.

While insurer systems, by and large, seem to be getting it right in terms of speed, but when a risk doesn’t fit into the digital box, the process starts to slow down.

In commercial, where you would expect greater pace, 65% of brokers report waiting an hour or more to hear back from an underwriter on a referral. And in agriculture, it’s even worse with a full three-quarters of respondents waiting over an hour and nearly 60% waiting two hours or more.

“I’d like to think that I’d get a response in about one or two hours, especially with how accessible some insurers are,” says Andy Partridge, regional director of PIB’s small business unit.

He says that while response times have become an issue for his team, he puts this down to the Covid-enforced changes to ways of working rather than any inherent inefficiencies in the system. And he predicts that the frequency of referrals will reduce as underwriting appetite increases.

“The acceptance of the market is starting to increase and push the boundaries of what can be done on e-trade,” he says.

But until those boundaries are reached and breached, a tension exists between a desire for no-touch submissions and a need for access to experienced underwriters. And it may be the case, particularly in agriculture, that this tension will never be resolved.

“There are more referrals in agriculture simply because farmers tend to diversify. They might have a glamping site, a farm shop, host experience days or they may have non-standard buildings or unusual livestock,” says Jo Waters, development manager at Land Based Underwriters.

“It can be a hindrance. Where you are trying to create a minimal touch product, it stops being minimal touch where people have to get involved which can mean it is not so cost effective when you have to get underwriter involved.”

But getting the underwriter involved needn’t mean slowing the process down according to MS Amlin’s Andrew Sajo, business development manager.

“An insurer may have a lot of SME underwriters but they have to refer up so brokers can’t speak to the right person. Our brokers can speak to Catherine [McCoy] and Simon [Fuller, mini-fleet product leader] who know the guides inside out,” he says.

“We are constantly investing our time and money on developing products on the platform to make them as automated as possible and referral free as possible, so we have time to deal with the risks that need attention.”

But will these efforts be undermined by an emerging nervousness in the midst of the business interruption controversy?

“Potentially. There is no doubt it is an area where there is inevitably and rightly an increased amount of attention. Customers have additional questions that they may not have spent time probing in previous renewals,” says Gallagher’s Birch.

“The nervousness has increased,” agrees MS Amlin’s McCoy. 

“It could simply be that people are sitting at home and they want the human interaction, but I have noticed more and more referring to us in the last few months, just asking to check something.”

But McCoy thinks this could also be attributed to new users of e-trade, forced into the digital realm by the lockdown. And while responding to these referrals takes time, it is time that seems to be well spent for all parties.

“The importance for me is more the ability of that response, being able to bounce a question off someone if we get a ‘maybe’ response to a submission. Each risk is different and it’s all part of the process to making the sale,” says PIB’s Partridge.

And as MS Amlin’s Sajo says: “It’s an education piece around learning the system and the more brokers ask, the less likely they are to ask in the future.”

Future focus
But what, if anything, does all this tell us about the current state of play in e-trade and its future? The research seems to show that the basics of streamlining the quote process is, on the whole, being delivered but referrals are the fly in the ointment. 

The problem is that brokers want fewer of them, but they also want underwriters available as and when they need them. Which creates a tension for insurers looking to reduce costly touch points in the process while maintaining the all-important relationship.

“It will always be about the relationship,” says CCIB’s Airey. “The people who do well on e-trade still have to have a relationship with the underwriter.”

Which is something that has not been missed by MS Amlin. 

“The team we have is very experienced. They are proper underwriters at heart and one of our strengths before digital was having that relationships with brokers. So, when we built the system, we wanted to replicate that relationship as much as we could,” says Poulter.

It would appear that the decades-old dream of streamlining and automating commercial insurance of all sorts is still some way away. And judging by the results of this survey, it may be that this dream, this vision, was wrong all along. No matter how digital our markets become, it seems that the human will always have a role to play. 

Q&A 

MS Amlin's Terry Poulter and Catherine McCoy on human engagement in commercial lines e-trading and what the future holds for the market  


Brokers have highlighted the lack of human engagement in commercial lines so has the automation of risk placement in this market gone too far? 

We know brokers like the consistency and speed in decision making that etrading brings. That said, human engagement is still critical to the process.

At MS Amlin, our focus is on utilising underwriter talent efficiently and enhancing that talent through the use of technology. Our brokers guide us as to the extent of human interaction they need throughout the lifecycle of each individual policy. This varies per brokerage, the individual and of course the complexity of the risk. 

We feel it’s important to allow our brokers to lead us in this respect, even if they just wish to phone to check that we have received their risk and that we will be responding to them within the hour  

Is agriculture e-trade, as the results seem to suggest, lagging behind its commercial cousin?  

We believe that the agriculture market has been underserved in this regard for some time with the majority of agricultural insurers well-established and reliant on legacy systems. 

Due to the complexity of these risks, we see few new entrants resulting in less disruption than in commercial markets. 

In addition, building a digital platform for the agricultural sector is much more complex than for a commercial motor product. There is far more variation of vehicles to insure, each having their own unique type of exposure which needs to be considered when building rules and pricing. 

In our experience, most insurers tend to capture data at policy-level. For this reason, they simply don’t have the granular level of detail required to underwrite effectively. 

Brokers complained that there was not enough human contact in commercial e-trade while agriculture brokers complained there were too many referrals. Is it possible to find a middle ground in both e-trade markets?  

Commercial e-trade is mostly being channelled through established high-volume distribution platforms which requires an obvious balancing act to meet broker expectations. 

We kept this in mind when developing our Countrywise platform. We wanted to replicate the normal broker / insurer trading relationship as closely as we could, whilst delivering all the efficiency and speed that a digital solution brings. 

This was achieved by having our underwriters and key brokers heavily involved throughout the design and test process. We are also able to continually refine our product to reduce referral numbers and deliver the best outcomes in the shortest time.

Our within one-hour referral commitment and webchat option maintains the speed of response whilst allowing the broker to have influence over the outcome. While we pride ourselves on quick response times, we also pride ourselves on developing and maintaining the personal relationships that are so important to this market. 

What will the agricultural and commercial e-trade markets look like in five years’ time? 

The argument for a digital solution in the agricultural sector was compelling, as such, we expect a number of our peers to follow suit during the next few years. In five years’ time we will see ourselves moving into different areas of mini fleets, including larger sized fleets, offering complimentary service propositions and effectively using telematics. 

However, the market won’t grow without brokers using these e-trading systems, so adoption is key to future success. Over the course of just the last three months, owing to the pandemic, we have spoken to more brokers who had never used online platforms than ever before. 

An increasing number of brokers are heading online to seek solutions for their SME clients. Our world is changing, and the insurance industry must evolve along with it and constantly look for ways to improve the accessibility to products for both our brokers and clients.   

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