Technology is great at introducing jargon, both new and old words that can be used in an endeavour to link business with technology. Some words in the era of ebusiness are less obvious but any company director who cannot say that he is web-enabled might find his golfing mates scoffing at his lack of forward thinking.

It is now seen as imperative to be able to identify oneself as an attacker or a defender. What the defenders – the traditional bricks and mortar companies – are probably fearing most is that without a strategy for their products in the ebusiness world, somebody with the right online solutions will take their business.

Not all businesses are under attack, but the general insurance industry as a whole is. This is because internet companies are establishing groupings of various types of business which appeal through their portal or exchange to an individual's many tastes.

In the world of ecommerce, the big internet service providers, portals and exchanges are starting to sweep ahead. The development of exchanges for internet business is one of the most serious challenges to the insurance industry, which sees itself as supplying a personal service but which has not really got its online strategy under way.

Clubs of users
There are, according to the Gartner Group, 30,000 exchanges being developed globally. Some of these will fall by the wayside, but most of them are being funded by venture capital running to millions of dollars each. This money is not being spent for fun.

Collaborative business over the web gives opportunities for companies to provide clubs of different users for their products. Amazon has, through its profiles of customers and the books they buy, been able to provide a profile of the customers that can then lead onto offering the customer other services which would apply to them. For example, if an individual is found to be buying boating books then they might need marine insurance for their boat.

The problem for the specialist insurer is that its business could be attacked by an internet supplier. How, therefore, does an insurer respond? Well, there is a good chance that any major insurance company has already decided on a strategy to keep itself ahead of the game.

Insurers are now starting to develop their own defensive strategies. These include creating their own non-core activities and biting back into the new entrants' markets. Direct Line has leveraged off its own brand and developed, a site that sells cars.

Prior to its merger with Norwich Union (NU), CGU was involved in a series of joint venture deals to provide various internet services. And NU is moving into banking.

The third-party business model is developing because of the opportunities offered by the internet.

Similar to the development of out-of-town shopping centres, where everything you want or did not realise you wanted, is on sale, the exchange or portal will give you access to a multitude of buying opportunities.

Not everybody will want to buy their services through the internet and it does have its shortcomings. However, like many new technologies, this particular one is here to stay and some 30,000 exchange developments cannot be wrong. The technology is creeping up on us all and the tide cannot be turned back.

The bottom line is that the technology is here to stay. It might start slowly but the money men behind the web ventures do not usually back a bum steer. If you have not considered how your business is going to react then start soon. It is already almost too late.

  • Roger Foord works as a consultant for Roger Foord Associates and can be contacted on 020 7891 2701.