AN: Why is it worth writing about a company that only employs eight staff?
PS: We are a new company but we are expecting to be a substantial player in a short period of time. New companies have new ideas and do new things. The e-commerce market lends itself to our sort of operation and I believe we can make a difference to the implementation in the market of your readership.
So what exactly do you do?
We are a new software house. We supply software to an insurance provider that wishes to trade standardly– rated risks via e-commerce.
Our software allows an insurer to design an insurance product (primarily but not exclusively, commercial insurance) and publish it to his e-commerce site quickly and with limited (or no) IT involvement.
And how much does this cost?
It is impossible to comment on cost without having details of a specific requirement. However, there are people who believe that e-commerce is a cheap route. Certainly there are substantial corporate cost savings to be made from e-commerce transactions.
But I remember when client/server technology was introduced, many of my IT colleagues claimed that the technology would be far cheaper. We failed to deliver on that promise. E-commerce technology demands systems that are far more robust and scalable than any systems we have developed do date. These systems will lead to cost savings. However, the basics of systems development remain and, unfortunately, IT staff who understand e-commerce are in short supply.
The only wholesale broker I know to have developed his own on-line product said that it cost him around £250,000 and took around two years. How does your solution compare to that?
Our system will be produced quicker than that. Technology has moved on enormously in the past two years.
And the money?
The cost of developing the solution is not strictly relevant to our customers. Our product will be charged primarily on a licence fee.
So would you say £250,000 was expensive or not?
I wouldn't want to comment on the cost of another solution, particularly if I haven't seen the quality or scope.
Where do you see yourself in the market?
I believe there is currently no product available internationally with the scope of our product.
I hear that the solution is quite similar to that of Benfield Greig Interactive. Is that a fair evaluation?
Our service is quite different to BGIL. I understand that BGIL offers, in effect, a bureau service, including some services. We provide software that will empower a company to develop its own e-commerce service.
Which customers do you have so far?
We have just agreed a deal with Lloyd's managing agent, SVB, to manage and develop its e-commerce systems.
Which other customers do you have?
I'm afraid I can't comment. Unfortunately.
What about numbers of customers?
We have signed three deals and are involved in advanced negotiations with a number of others.
And are these customers brokers or insurers?
The main interest to date has come from insurers. I have had conversations with brokers and there is undoubtedly an opportunity for them to utilise the technology. It will be interesting in the next few weeks to see how the power shifts between the respective sides. I think that the shake-out, at least in the commercial market, will lead to a clear and satisfactory resolution whereby the broker is clear to sell the insurance and have the administrative burden removed from him.
So does that mean brokers having to share commercially-sensitive information with an insurer?
The technology allows both to decide exactly how much information the wish to share.
Client poaching is one of the most contentious issues in the insurance industry today.
For as long as people have been in business there have been good and bad relationships.
The technology can support the transacting of business, fortunately there will remain the human element to establish mutually beneficial business relations.
When customers use your system, can they have their existing products placed upon it, or does your system require the creation of completely new products?
They will be able to place their existing products on it. However, people may feel that they want to redesign their products for e-commerce. We can advise people on what will and will not work over e-commerce.
People will also want to consider how an existing product may compete with the current channel.
There has been a lot of talk of new entrants in the insurance market. Is that something you see?
New entrants are a major threat to the established companies. The large players are struggling to adapt to the new technology while protecting their existing channel and market share.
It is likely that in some major classes of business the leaders in five years time do not exist today. And of course the winners will be driven by the marketing strategy and the technology.