After years of resistance brokers are become more trustful of technology, but the take-up is fragmented. John Hancock explains why.
With technology, it seems quite normal to hold conflicting views: we love what the kit can achieve while hating the demands it makes on how we work. But are these contradictions getting in the way of brokers making the best use of technology?
A recent survey by internet solutions provider Pancentric found 98% of the 400 brokers who replied believed that technology will play a bigger part in their future business.
Yet while 30% of respondents were interested in using technology as part of their new business promotion processes, only 15% actually use it. There seems some conflict between what people say and what they do.
Jeff Ward, sales and marketing director at TriSystems InfoBahn, comments; "The London market has (hitherto) resisted (technology based) change but now it's all up for review and is changing whether (participants in the market) like it or not."
Fortunately, there is evidence of changing attitudes. Gina Cook, business development and relationship manager at solutions provider SSP, has found: "The most pronounced change in broker requirement over the past two years has been in relation to ebusiness.
"Brokers understand that the internet is an important trading channel which they need to consider in addition to their traditional business model."
As is often the case, both comments seem correct. The take-up by brokers of technology-based solutions is fragmented, driven as much by the development of new technology-based business processes as by desire for change.
In the retention and growing of client value, email technology has revolutionised the newsletter format, while a properly equipped website can add a great deal to a broker's accessibility and, therefore, the likelihood of inquiries from potential new clients.
Debbie Baker, business unit director at insurance IT services provider Kewill, explains: "Brokers need technology to sell and service wherever and whenever it's convenient to their clients."
The main challenge for a broker is to enable data interchange internally and externally. There is also the difficulty of combining the old with the new to get an integrated system.
Simon Hughes, sales and marketing director at Open GI, sums up the situation: "Brokers can use technology to support their businesses in a number of ways: to streamline processes, improve efficiency, reduce costs, exploit new distribution channels or provide regulatory support."
But if, for instance, a valued customer does not wish to be communicated with by email, the broker cannot force them to do so.
Of course, it's worth brokers regularly updating their understanding of customer needs and preferences, which may have changed in the past few years.
Dave Jones, director at Cornwall-based broker Mountguard Insurance, sees inconsistencies on both sides of the fence. "Even with the launch of Imarket," he comments, "there are still insurers that have to be approached through their website or by email, fax, even telephone.
"It would be cost effective (for us) if insurers could agree a single communication and interface standard."
Brokers tend to use packaged solutions from a variety of providers including some of the newer ASP (application service provider) solutions or MSP (managed service provider) solutions from providers, such as Kewill.
And there are an increasing number of solutions that have been designed with broker needs in mind, such as Enabler from Pancentric and Imarket.
But even specialised solutions can pose user problems and the popular ones, it seems, use mainstream products such as MS Word and Excel for appropriate tasks, thus avoiding staff having to learn multiple ways of performing the same function, such as writing a letter, through different solutions.
So, why are brokers not using technology to the full? Peter Knowles, strategy and marketing director at Polaris, says: "The problems may be a suspicion of technology and continuing to be reasonably successful without it - which cannot last."
Simon Fenn, marketing director at Pancentric, believes: "There is a traditional approach of face to face business but that generation of brokers is moving on now and newcomers to the market are much more open-minded about technology."
Some of the inconsistencies mentioned above deter users as well as a concern that a client's claim might be refused because of errors arising in the technology.
Finding the time to train on new technology can be difficult while running a small broker. Brokers face a bewildering choice of technology solutions while they may not feel adequately equipped to choose.
One technology expert summed it up as a pot pourri of solutions from the leading edge to the "bleeding awful". It seems that some brokers, in trying to overcome the choice problem, prefer to buy through a vendor that knows their business and needs.
Alex Letts, chief executive of electronic trading service RI3K, says: "Brokers are caught between a rock and a hard place. They have to support their existing infrastructure even though they know that they could do so much more efficiently with better, newer solutions."
Of course, technology companies also must compromise to resolve the conflict of brokers needing a bespoke solution and costs that can only be kept down through using a broadly applicable solution. Plus, of course, there are different broker operating models which will skew technology priorities.
A call centre based operation will have different needs to a service-based commercial business.
We are living in interesting and exciting times as far as broker adoption of technology is concerned.
On the one hand, everybody knows that technology is tied to future profitability but, on the other, we have the contradiction of differing rates of broker take-up for a variety of tasks.
Some industry standards would make life easier all round. Providers would then have to distinguish themselves by functionality and quality of service.
That, combined with a growing proportion of brokers being technology savvy would help avoid any predatory operator from outside of the market leveraging a solution that works to cherry pick the easiest and most profitable work.
After the experience of direct operators, brokers should understand the risk.