Broker and direct insurer set to go ahead with rescue package
Insurance broker Topaz has put together a proposal with a major direct insurer to save broker system provider Brokersoft, which stopped trading last week. It is understood that the mystery backer is Churchill.
The closure has left an estimated 80 brokers without support for their systems and severely hampered their ability to trade.
At the time of going to press, Topaz and its partners had met their prospective financial backers and were waiting for the go-ahead to put an offer to Brokersoft's liquidator.
Topaz managing director Richard Mikula said: "Our meeting was very positive, very constructive and there is scope to move along now."
He added that at this stage Topaz and its partners were simply putting together a financial rescue package that would help them keep the Brokersoft system, and their businesses, running.
Brokersoft director Gary Weatherill said the business had closed because there was "little chance of obtaining target sales ... to meet current and future liabilities".
He blamed broker apathy, their acceptance of poor service standards and a reluctance to bear the short-term inconvenience of switching to a new system for the lack of interest in his company's products.
He also accused Fortis Insurance of failing to help Brokersoft develop its full cycle electronic data interchange (EDI) offering. Fortis has developed EDI compatibility with other broker systems.
He said Groupama's decision to make EDI on new motor business mandatory by June 2001 could not be achieved in time, which meant the loss of more orders.
One broker, who asked not to be named, said insurers who insisted on EDI were being anti-competitive.
He said that stance would force brokers who wanted to deal with them to use only four or five larger software providers, at the expense of their smaller rivals.
Groupama Personal Insurances director of sales and distribution Jon Morrell said this was not the case because the vast majority of intermediaries already had EDI facilities.
"The facility is widely available with the large software houses and we are working with a number of the smaller software houses to ensure that they have the same facilities available in line with our timetable," he said.
He said the introduction of EDI applied to new business submitted after 1 June and that any existing business would be dealt with using traditional methods. "If that date can't be achieved ... there's no reason why we can't complete those [EDI] developments with other smaller software houses subsequent to that," he said.