Lack of system integration is creating a barrier to e-business in the UK insurance market.

A survey by e-business solutions company IE found that while attitudes to e-business had matured over the past two years, most companies had failed to tackle the technical problems that are holding back the market.

The survey of 30 insurance companies, carried out for IE by Byline Research, found two-thirds of companies were offering one or more e-business services.

Most now offer some form of online quotation service, either direct to customers via the internet or through brokers and agents over intranets.

The report said while there were encouraging signs of progress, the services on offer remained very limited. Typical companies were found to do less than 5% of their business online.

Head of insurance at IE, Terri Sheperdigian, said: “The biggest benefits to insurers and their customers will come from straight-through processing – the ability to link online applications directly to all the back-office systems that support the business.”

“Without this facility, it's impossible to take a consolidated view of the customer or to offer the range of financial services required to win new businesses.”

Around half the companies in the survey did not provide any kind of online connection into their back-office systems and only a third had integrated two or more systems in support of e-business.

Sheperdigian said insurance companies needed integration platforms flexible enough to allow new applications and levels of services to be added in future at a reasonable cost and with minimal risk.