Without imarket - Crushed by the wheels of industry

The imarket portal is the e-trading solution that has been developed for the industry, by the industry. It has the potential to be the starting point for all commercial business, large and small, between insurer and broker. However, with continued hesitancy by some brokers to adopt the technology into everyday trading, will the level of take-up ever justify the expenditure? If not, what would the world be like without imarket?

Picture the scene - a small to medium-sized enterprise customer is looking for an alternative quotation. As his broker, what do you do? Fill out quotation forms and fax copies to all the insurers you transact SME business with, or phone around? Time is running out. The customer needs an urgent response and you are still waiting for all the insurers to provide quotations. You are under pressure to deliver. The quotations come in piecemeal. You have to go through each one to find the closest match in terms of the customer's cover and premium requirements. At last you have a solution that fits. The customer, however, has already found another solution.

The alternative is that you have had to spend the money to invest in your own technology, a solution not always available to the smaller broker. This can be the reality of life without imarket.

The traditional insurance model for the sale of smaller-end business is also under threat from new entrants, such as banks and direct writers. To succeed in the SME arena, it is important that brokers meet the challenge of controlling costs, improving service and achieving a faster turnaround of documents and quotations. imarket is the industry tool to help deliver this.

A recent survey by Professional Broking indicated that brokers are in broad agreement that there is a desperate need for a technological solution to enable them to trade efficiently with insurers. imarket is the strongest and most robust answer the industry has to offer. It is the principal e-trading solution that has been developed with both insurer and intermediary benefits in mind.

Brokers cannot afford the sceptics the luxury of saying, 'I told you so'. imarket is, and should always be, regarded as an integral part of normal insurer and intermediary trading.

As insurers, we need to support this. Our message should be that the intermediary model is the principal distribution route to market; imarket investment and other initiatives emphasise commitment to providing innovative solutions for cutting transactional costs for all parties and this is a natural extension of an already successful relationship with intermediaries.

Requirements for success

The analogy of a football dream team illustrates the requirements for imarket success. Brokers are required at the frontline to tackle and win business, while insurers and software houses each play their part as the supporting back-line and midfield respectively.

Eight major insurers and two underwriting agencies are now imarket members and although a healthy percentage of brokers have already signed up, there is still a long way to go before the community as a whole demonstrates a willingness to support the services available.

Chris Hanks, commercial general manager for Allianz Cornhill, says: "While I would usually advocate a contingency plan in most scenarios linked to risk, for imarket we should only consider further development and growth towards our mutual goals. imarket is a team effort."

Since January 2005, 83% of the 2500 subscribed brokers have become regular users of imarket and are enjoying the benefits. "For products at the smaller end of the market, it certainly helps to drive a lot of wasted administrative time out of the day," says David Williams, partner at Moscrop, Robinson and Chadwick. "The technology is proving popular, especially with my younger staff. They can obtain quotes for me now in a matter of minutes."

Although the benefits are already proving tangible for some, others yet to try imarket still question its merits. Simon McGinn, North and Midlands trading director for Allianz Cornhill, comments: "Hesitance is understandable but the solution has now been delivered. Brokers cannot afford to let insurers interpret the lack of universal adoption to mean there is a lack of requirement."

Those who see imarket as an outside bet have cited the following reasons for their hesitation.

imarket data-capture screens are not as short as brokers would like and are generally longer than that available from an individual insurer's extranet site. However, given that the forms are an amalgamation of eight insurers' questions, it is a significant saving compared with entering data on to multiple systems. To improve the user experience, work is under way to design a new quote form.

Is it the lack of personal contact and the impact that this may have on service that is keeping some brokers away? Insurers have a need to release their skilled underwriters from routine work.

It is not about reducing the numbers, it os about focusing on the right activities. Allianz cornhill believes that imarket will not hinder relationships with SME brokers but enhance the service that can be offered. If a broker has an unusual or complex case, they can call us and reach a skilled underwriter who is available to make underwriting decisions and is not tied up with administration tasks.

imarket supports the development of trading relationships where it matters. It will never replace the interaction between brokers and underwriters within the industry but it will replace unnecessary administrative-based tasks.

There is also concern that removing direct contact with the underwriters will reduce the ability to negotiate a premium. However, this has been pre-empted by several insurers, which have in turn used differential pricing through imarket to take into account the cost of distribution and provide flexibility of pricing to the broker.

Is new technology itself a hindrance to the success of imarket? Traditionally insurance has been focused on relationships and the move to a technology-based solution can be uncomfortable. Although one-to-one training by Polaris - the company behind imarket - is impractical, it is creating some 'how-to' demonstrations to guide brokers through the user experience of a typical transaction. Getting imarket integrated with brokers' own back-office systems will also make the transition easier, as brokers will be using imarket services through a system that is familiar to them.

Administration processes

Insurers and brokers cannot afford to continue with intensive administration processes for SME business. imarket is the market's answer. If it does not succeed, insurers will still have the requirement to streamline their SME processes. This is likely to be satisfied by using their own online systems, which will not translate into any efficiency savings for the broker. imarket is now the only market-wide channel in which both parties can achieve benefit.

The extension of the imarket web browser route to software-house integration shows that imarket has been developed to collaborate with and recognise the role of the broker in the SME market. Brokers must reaffirm this position themselves to be ready for 20% of SMEs considering changing broker in the next 12 months for a cheaper premium and 61% of businesses considering going direct.

To succeed here, brokers need to focus on their advisory role and value-added activities that differentiate them from the direct channel, not on administration and re-keying required in the world outside of imarket.

In the lead-up to 2007, it already seems as though imarket is near a tipping point. Individual transactions are increasing each month and insurers are implementing plans to roll out further products and functionality.

imarket is a solution that is evolving. The first half of its development has already happened and the seemingly impossible has been delivered. Eight of the UK's major insurers have agreed the standards and delivered the technology.

The second half involves further roll-outs but, more importantly, requires a culture change. Brokers need to grasp the opportunity of being actively involved in a solution that is still being developed and rule themselves out of being an unnecessary cost in the chain to further commoditise commercial products.

If this initiative fails to succeed, brokers will be forced to invest in their own technological solutions just to meet the entry requirements to play in the SME market. With Acturis estimating that a 30% cost reduction in administration time is achievable for brokers using imarket and the costs being born by the insurers, no party can afford for this to fail.

Could imarket's failure also push broking into the realms of only being viable at the larger end of the scale? Only time will tell. But with the support of brokers and insurers, imarket will become the trading gateway for all those in the market who are serious about surviving and thriving in the SME market.

FIVE EASY STEPS TO IMARKET REGISTRATION

One: Check that your company is not already registered with imarket at another office or location, and that you have authority from your principal/director/partner to register with imarket.

Two: Make sure you have the following details to hand: your agency numbers for each of the insurers you wish to trade with; your company VAT registration number where relevant; and the name of the principal/director/partner who authorised the registration.

Three: Go to www.imarket.co.uk, click on new user/register and click to accept the terms and conditions.

Four: Enter your company address and contact details and your name and contact details.

Five: Select the insurers you wish to trade with and enter your agency account number for each insurer.