In Focus: Technology and schemes


Eleanore Robinson examines how new technology is impacting on the schemes market for brokers.

The role of technology has never been more important in business and the schemes market is no exception.

Data, e-trading and social media are all powerful tools that can help grow schemes and ensure brokers stay one step ahead of the competition.

But does using technology have its limits and can it, if used incorrectly, actually cause harm to a business?

Drawing parallels with the recent US election result, David Sweeney, managing director, insurance, at Brightside Group, said social media was becoming increasingly important.

He said: "Generating leads through personal recommendations will always be vital for a broker but publicity, endorsements (‘likes') and comments from social media are now becoming increasingly important.

There are lessons too from politics, where social media has become a key campaigning tool. In the US Presidential race, Donald Trump bypassed a critical mainstream media to speak directly to 15m followers via his twitter feed.

"In an era where customer loyalty is at a premium, especially in personal lines, creating relationships with customers is a sort of modern Holy Grail.

"Furthermore, recommendations that come through social media can reduce the lead generation cost. Trump spent far less than Hillary Clinton on advertising."

Yutree Underwriting - established less than five years ago - used social media to build its brand. Director Laura High explained: "As a new schemes business, increasing our brand profile featured heavily in our early plan.

"Technology has enabled us to do this far more quickly than we could have done 10 years ago. Twitter, Facebook and LinkedIn have all provided an unprecedented reach for our product launches, technical pieces, blog posts and press releases."

She continued: "There are pitfalls to using social media for business but, in our opinion, as long as you have a strategy, remain aware of regulatory rules, engage with followers, are consistent and maintain your brand voice and identity then social media is a vital part of promoting schemes."

High added that the next stage for Yutree would be to use technology to automate all of its scheme policy document production. This will lead to efficiencies which will enable us to focus on our underwriting, relationships and sales efforts.

She said: "We do not sell our products online and our proposition is based on strong relationship management and traditional underwriting principles.

"Whilst this sounds old-fashioned, it is technology that has underpinned our delivery of this proposition and, without it, we would not have achieved the success that we have to date."

Richard Brunger, schemes product manager at insurer LV said technology was playing an ever increasing role in its schemes underwriting strategy, from initial research to full scale scheme management.

He said: "At LV we are always looking for brokers who are able to bring expertise to their chosen sectors, and the use of social media or electronic marketing is an excellent way to get the product to market.

"We are also finding more brokers offering full cycle selling, via website or extranet sites, which enables today's more technology-conscious client to buy their insurance 24 hours a day, seven days a week."

Simply Business built its own technology to streamline the process of developing and testing schemes, so set up can be achieved within days. At the same time, it says it can carry out the process with tailored journeys and rating models.

Chief technical officer Lukas Oberhuber explained: "At every stage we take a customer-first approach, and this is reflected in our tech capabilities, which allow us to provide extremely specific products to a wide range of customers through mass customisation, while keeping the cost of managing the schemes under control.

"Technology helps us to build successful schemes because it helps us know our customers."

He continued: "We are constantly looking at a huge and ever-growing range of data points, and through these, along with real-life interactions through our contact centre, we can build a picture of our customers and prospects that enables us to build schemes that cater for the extraordinary diversity of the UK's small businesses.

"We're well on our way to becoming a truly data-driven company, helped in part by our in-house analysis system AERIE, which has had a major and quantifiable impact on the business through significant increases in monthly written premiums, better reporting to partners, and improved insight for our insurance teams."

From an insurers point of view, increased technology gives LV the ability to undertake improved due diligence on new opportunities, Brunger added.

This means it can be more confident on a book of business from the outset and, therefore, hopefully not have any future surprises. It also enables LV to accurately map weather issues - one of the industries major challenges - much more effectively.

Brunger said: "Technological improvements in full cycle management of schemes can allow the broker's system to liaise directly with the insurer's system.

"This negates the need for bordereau submission in some cases and can provide the ability to automatically provide risk data without manual intervention. This allows us, as underwriting businesses, to highlight potential problems earlier and solve them faster."

Brightside's Sweeney argued that relationship management now extends well beyond online purchase alone, with customers expecting not only to buy online but to be given great advice too, so the provision of advice will increasingly transition from the telephone to the internet.

He said: "Client portals, where customers can store their documentation, ask for advice and track their claims are now ‘de rigeur.' The next step is for apps to be developed that allow mobile access to this information.

"But with advantages come potential pitfalls, such as the risk of innocent non-disclosure if the information is not completely clear."

Sweeney added: "For sure, traditional telephone brokers will continue to play their part as there will always be customers who prefer to speak to someone than buy online.

"In Brightside's experience, higher value clients are more likely to use a call centre as they want to talk to someone who understands their risks."

Oberhuber, however, said the most significant potential pitfall, would be a lack of buy-in when investing in technology.

He said: "All too often, tech is looked at as a cost, rather than an investment. In order to make it work, you need the best people - and if you don't have those people, you're not going to get your return."

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