The internet could be just what the insurance industry needs to kick it into the 21st century, making things clear and simple for the customer....
The insurance industry today is being dragged forward by a remorseless paranoia about what the future holds. There have been countless studies on the subject, but the impact of the internet is clearly becoming huge.
On top of that, high street retailers such as Tesco and Marks & Spencer want to grab market share from traditional providers and have the brand and resources to do it.
Within just nine months, for example, Tesco is already believed to have become Green Flag's biggest affinity client.
Last week, during an Experian one-day conference, the company's head of insurance solutions Avis Easteal, explained how the new arrivals are succeeding.
She said: "New entrants will not have the legacy and they want to make it as easy as possible for people to buy insurance."
The future of bulk insurance, either via the internet or big-brand retailers, will rely on two things: simplicity of products and access to knowledge.
The Experian conference featured two of the most interesting figures in the insurance industry: Roger Smith from affinity portal provider, Xelector, and Nick Southan from ETC.
The great leap forward
ETC managing director, Southan, said: "When we were researching the insurance market prior to launch, the majority of consumers said they wanted the same thing: choice, easy-to-buy insurance, control and value.
"The insurance industry has inherited over-complex processes. I don't understand how 1960s technology can work with today's technology, let alone tomorrow's."
Xelector is a company seeking to provide branded services to affinity clients. Whereas ETC provides IT and consultancy to big brands, Xelector wants to be an intermediary in its own right, working behind other brands.
Smith said: "This is the future. Organisations such as ours can come along and provide insurance in the company's name."
But the key is information.
Smith believes the internet will enable underwriters to glean detailed information on customers who come to it via various companies. For example, if Yahoo motor insurance policyholders have higher claims costs than Freeserve policyholders, then an underwriter could increase premiums accordingly.
Big retailers also have massive databases on customers, and the internet will provide them with greater ability to monitor what their customers are doing.
For brokers and intermediaries to fight back they must first learn to fully exploit the client information they already possess as well as relying on the information provided by companies such as Experian.
In a risk management session in the afternoon, speakers warned the companies had to use their information to avoid losing customers too.
John Castagno, managing director of Legal & General, warned that companies had to use their information to ensure their policies were still suitable to the customer as part of a "lapse management" process.
Two information strategists from The Redeye Consultancy urged insurers and brokers to put a value on the customer rather than the individual transaction.
They said firms had to use their information about each customer to help them set the prices of products in terms of how much that customer is worth and how much he or she would pay overall and not just use single-product underwriting criteria.