The key to good e-trading

Commercial insurance e-trading continues to attract sustained investment, even though it is still restricted mostly to simpler 'package' products. There are multiple options in this arena and brokers' choices have an impact on the efficiency of their business processes, as well as the product features offered to their customers.

Logically, quotation systems that are integrated with a broker's back office ought to be the sensible option because they offer choice and one-time only data entry. However, as several insurers offer products on such systems, are we likely to see a paring down of cover features and subsequently the creation of value products to ensure that the lowest premium quote is offered on-screen in order to secure business on price? This already happens in the personal lines market and experiences of what works best in the personal lines electronic comparative quotes environment are likely to be applied to the commercial insurance market too.

Insurer extranets allow greater product customisation and rating. However, brokers need to visit several sites to secure comparative quotes and this will inevitably mean re-keying policy data on nearly each occasion. In the absence of structured time and motion studies, it is difficult to estimate how much time is lost. Some brokers' employees can navigate their most-visited extranet sites very quickly, however, it is reasonable to assume that the process takes a great deal of time. The issue, therefore, is whether or not that additional staff time expended is justified if the product is more customised?

It is not difficult to scope the ideal offering: it should be integrated, have multiple products and allow tangible customisation. As with any evolution, until we have a handful of systems offering this - while trying to increase the boundaries of what can be e-traded in the commercial market - brokers may have to keep trying multiple systems, both comparative and extranets, in deciding for themselves what works best for different products.