David Read says the growth of internet operations will give 'techno savvy' brokers the chance to lay the foundations of our future way of doing business
There is a widespread view that the market is polarising into two camps: relatively simple cover which can be bought on the phone, via the internet or at the supermarket cash till, versus large, more complex covers which demand more underwriting skill from insurers and greater customer understanding and input from brokers.
While this view segments the market quite neatly, it over-simplifies policyholders' needs. Not every customer would prefer to sacrifice human contact for fast, slick, off-the-shelf solutions, or if they do they might not want to do it every time they buy.
Splitting the market into cover which is either expensive to administer but highly flexible, or cheap but totally inflexible, leaves a golden vacuum in between. Large insurers are not best placed to exploit this less definable market, but brokers are.
Using internet-based systems to reduce administrative costs and speed up processing, while still offering their customers the benefits of good personal service, brokers can effectively enjoy the best of both worlds.
While imarket has been lauded as a golden opportunity to commoditise various elements of commercial business, it also offers far greater long-term potential to create the basis for a truly market-style portal, bringing interested parties together.
In the next 10 years, we foresee the creation of a common architecture for connected trading across far more levels. Loss adjusters, surveyors, claims suppliers, accounts suppliers, insurers, brokers and information brokers like Experian will all be exchanging data electronically using the same protocols.
Brokers will take on the majority of policy administration such as mid term adjustments, changes to policy wording and renewals in their own office. A large proportion of our claims staffs' time is currently devoted to helping brokers to track claims. This is usually a transactional area where human intervention adds no value at all and can cause significant service bottlenecks. We need to replicate the tracking success of Amazon or Dell, so brokers can track every stage of a claim online.
At Norwich Union, we estimate we use over 70 million pieces of paper every year on commercial documentation alone. Wouldn't it be far preferable for the environment, as well as the insurance industry, to issue both personal lines and commercial customers with online documentation?
We will not be able to simply take existing processes and replicate them online, however. The most successful e-marketing has always been that which has re-engineered the process to suit the online environment. There will be new rules for a new world.
Apparently, none of us will devote more than 12 seconds to one web page, so this has to affect how we design the new processes online. Rather than wading through, or more commonly, ignoring policy small print, customers will access information through a search function on personalised micro-sites.
Of course, such sweeping changes in the way we do business are likely to take several years. Imarket has proved how challenging it is just to arrive at a common set of standards.
We estimate that, as an industry, we are about ten years down a difficult but exciting road into an internet-enabled future which could take as long as 25 years to come to fruition. As ever, it looks likely to be a case of evolution not revolution. IT
' David Read is head of broker service development at Norwich Union