Since its 2003 launch, the Imarket electronic trading system has defied sceptics and has signed up nearly 70% of the UK's brokers, but the challenge is to get brokers to keep using it. Emma Jones reports
The number of transactions made via Imarket has more than tripled in the past 10 months, according to the latest statistics from provider, Polaris.
In April, 25,000 individual transactions - which includes quotes, emails and click-throughs - were made on the Imarket website.
This compares to just 8,500 in July 2005 and represents a 25% increase month-on-month.
There has also been a "small" increase in the number of quotes being made via integrated software houses in recent months.
So is Imarket finally taking off?
Peter Knowles, strategy and marketing director at Polaris, is upbeat: "The key difference is, at the Biba conference last year brokers were asking, 'What is Imarket?' But this year it was, 'How can I make the most of it and what are the benefits for my business?" he says.
But Knowles admits: "Yes, it has taken a long time and yes, we probably did raise expectations too high when we launched in 2003, but we have built something complicated. The good news is, it is working."
Improved transaction volumes have been attributed to an increase in product lines from insurer and software house integration.
Phil Nunn, head of e-strategy at Norwich Union, says he expects the number of registered brokers on Imarket to double as "integration matures". He says: "The tipping point, if we don't reach it by the end of 2006, will be by the beginning of 2007.
"As [software houses] get into integrated trading, you are going to see block business moving away from manual to the electronic way of trading."
Mike Dodd, executive director of software house, Sirius Financial Systems, says the advantages of trading via Imarket speak for themselves.
"Trading standard SME business takes about nine re-keys, 45 days to deliver (in a world where we want things instantly) and a cost of 35 pence in every pound to do that piece of business, which is not sustainable in the longer term.
"If brokers are not using e-trading, and in particular Imarket, they won't be able to do that kind of business in three to five years' time."
In comparison, Dodd says systems such as Imarket provide a single entry point, deliver within seconds, and cost 10 pence in every pound to do business.
With more than 2,250 broker firms now signed up to Imarket and about 50 new brokers joining every month, Richard Crocker, divisional director for distribution at SSP, believes brokers are finally buying into the industry portal.
He says: "There has been a lot of scepticism because brokers have seen a lot of initiatives come and go in commercial lines trading and they were fearful that this would be another.
"But, now there is so much momentum with all major software houses behind it and real activity happening. Brokers are now thinking that this initiative is here to stay and it is going to work."
According to a recent market survey, more than a quarter of SMEs would consider changing brokers for better online services. Half of those asked also said they wanted to access "far more information" online; only 20% thought their broker had an online service and 100% felt that that service was "extremely limited".
Mark Coffer, managing director of broker Marrs Insurance, agrees that Imarket is the way forward. But he believes it needs to follow a "common sense" approach.
"What tends to happen is that innovation comes in, changes are made... but, like mobile telephones - where you make the mistake of getting an upgrade and then spend hours working out what the new phone does - I think that's the way things are going to be with online services.
"It would be nice if they [Imarket] could do a series of personal visits, if that could be afforded, so brokers can get up and running [and learn how to] use it on a day-to-day basis. Once you've started doing that then brokers will be more inclined to continue using it."
So where does Imarket go from here? Crocker says it is now up to insurers and software houses to continue the momentum.
Polaris hopes to see more insurer products in the software house systems, adding more insurers onto the Imarket panel, addressing the layout and length of quotation forms and developing new services such as electronic cover-notes and electronic document delivery.
Crocker adds: "The danger is, if we don't see a good product roll-out this year, brokers will become sceptical and switch off.
Once that happens it will be very difficult to win them back." IT
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