Phil Bayles speaks to Insurance Times about how the cheaper personal lines products will help brokers compete with the direct market

Aviva’s move to make personal lines policies cheaper to brokers through it’s extranet could drive down charges asked by software houses.

Phil Bayles, Aviva’s managing director of UK intermediaries, says the plan to offer home, van and motor policies through it’s Fast Trade platform was geared towards allowing personal lines brokers to compete with the direct market.

The policies can be offered to brokers at a cheaper rate via Fast Trade because Aviva doesn’t have the software houses costs.

Bayles denies that this move was an aggressive one against the software houses. But he says a positive outcome for brokers could be that it forces software houses to reduce their charges, allowing insurers to offer cheaper policies.

Bayles said: “It’s a competitive market and software houses have a position in the distribution chain which they can use to drive their revenues.

“If software houses feel the need to become more competitive about the fees they charge, because there are alternatives that don’t use them, then that’s a good thing in my eyes.

“Having an alternative to a software house delivered price is good because it creates competition around the cost of delivery.

“All we’ve done is create a bit of competition around the cost to transact in personal lines.

“That competition should benefit brokers in terms of trying to be more competitive with the direct model, which is the real threat.”


Open GI’s Nick Giddings explained how software houses would overcome the threat of extranets offering cheaper policies. 

Giddings said using Fast Trade would mean extra rekeying for brokers, with the only benefit being a nominal saving. 

Bayles said cheaper policies available on Fast Trade would mostly be accessed by regional firms rather than larger firms with bespoke models of doing business.

Bayles said he expected brokers to continue using software houses, and that Fast Trade could complement this by giving brokers another choice.

“Broker personal lines is quite a challenged environment particularly on motor,” he said. “The price differential may be small in some cases and bigger in others, but there’s likely to be a price differential.

“Whether that’s enough for a broker to hold on to a case they wouldn’t have held onto otherwise, maybe it will, maybe it won’t – it depends on what the size of the gap is to start off with.

“But the point is this isn’t about us trying to disintermediate the software houses. It’s about us trying to put our best possible prices in the hands of brokers, and to give them a choice.”

Bayles confirmed there were plans to eventually start rolling out other personal lines products through Fast Trade to help brokers compete with the direct market.

And he added: “We will continue to work very closely with the software houses, they’re very important and they haven’t done anything wrong.

“But we will also continue to strive to get the best possible prices in brokers’ hands so that they can continue to compete.

“Their biggest competition is not other brokers, it’s the direct model and we’re trying to help our brokers compete with the direct model.”