Broker software has a long and expensive history of failure. IT wannabees have not served the market well and brokers have not made themselves heard, says Elliot Lane
When Lord Poole decided some years ago that Ockham, now Highway Insurance, should invest in a broker software system, he decided to elicit some advice from various IT consultants.
Poole's raison d'etre, at that time and throughout most of his insurance career, was to experiment with ventures and ideas that would keep his interest. He told the consultants that he wanted Ockham to create its own internal system and that he was willing to invest millions "as a hobby".
But one of the consultants (still well known in the industry today) advised him that it was folly to pursue the investment on such a basis. It needed time and commitment and without those "you are going to lose your shirt", he told Poole.
So Poole ignored the warning and invested in a new company called New Millennium Technologies (NMT). Roughly £10m later, the rest, as they say, is history.
Many of the directors behind NMT had worked for Penta Technologies, another broker software company acquired by Misys in the mid-1990s.
The system developed by Penta and NMT was the brainchild of IT guru Steve Andrews and was successful. But in both cases the companies involved fell into financial difficulties because the business model was inept.
So after ten years of innovation, where is the software for insurance brokers today? Brokersoft's failure in April 2002 left brokers stranded, and this was coupled with the continual problems surrounding other systems.
Brokers don't want much - ask any personal lines broker and the criteria he seeks in a software system are simple: a quote engine which accesses all the insurers' policies and quotes; a system that is Windows compatible; and, lastly has EDI processing.
NMT promised all this, but went bust. Brokersoft got halfway but never quite developed EDI.
And now, Cox Retail has them both... plus Brokersure.
According to brokers who use Brokersoft, Cox had promised to integrate the system, but, instead, is encouraging them to convert to Brokersure, which is internet based.
To the chagrin of the industry, only one software house has the full capability to fulfil broker needs. And it is the most despised -
Misys. Why is it hated so much? Because of the price and lack of service - fundamentally because the company is so big.
But Misys has the money and the business acumen to survive. It only needs one company, and many think if Cox can finally achieve EDI for the Brokersoft system, it could clean up and dominate the market.
Cox's Neil Utley has a challenge on his hands - to integrate three disparate systems. The same predicament scotched CSC's chances of dominating the market and could drain Cox of millions of pounds when it needs it most.
Someone needs to reboot the market... fast.