Insurers are offering cash incentives to brokers to use Imarket, but is this an admission it has limitations? Liam Vaughan reports
The decision by the major insurers to start offering lower rates for brokers transacting business via Imarket should come as little surprise to shrewd observers of the e-trading portal.
Norwich Union, Royal & SunAlliance and Allianz Corhnhill this week announced they would drop 10% from premiums for all business transacted using Imarket, with Groupama and AXA likely to follow suit.
The software houses - in particular pack-leaders Sirius and Acturis - are also promising to install the requisite software and show brokers how to use it free of charge. However, while the moves have been widely portrayed as a 'gentle push' in the right direction, there have been murmurings behind the scenes of a creeping sense of desperation.
Over the past three years insurers, software houses and Imarket founder Polaris have kept the market up to date with every new product, feature and safety certification associated with the platform. The concept being to provide a portal for brokers to key in details of commercial risks which will then be forwarded to a range of insurers for quotation and acceptance within minutes.
For auto-rated products (such as tradesmen) the client could potentially be on cover within 10 minutes of walking into the broker's office.
Yet despite the rhetoric the number of policies actually transacted via Imarket remains pitifully low. What has been touted by some as a panacea for SME insurance and the future of commercial lines broking has started with less of a roar than a whimper.
Reputations are now at stake. As Mike Dodd, chief executive UK systems at Sirius, says: "It has to happen now to make all the time and investment worthwhile."
So what stands in the way of Imarket realising its potential?
For a start, the number of products currently live is limited to office, tradesmen and shop policies with only two to three insurers offering comparable products for any one risk.
Theo Duchen, chief executive of Acturis, says: "The products currently available through Imarket represent nothing squared of the total business for the average broker which may explain why there hasn't been a huge rush to get involved.
"However, once the number of insurers and, more importantly, the range of products available increases, so will take-up. I firmly believe the addition of commercial combined and fleet policies will lead to a groundswell."
Another issue is that Imarket is only geared up for new business. Renewals and mid-term adjustments - the life-blood of most brokers' revenues - are not available using the portal in its current form.
Insurers and software houses shout about the benefits of Imarket for brokers: single key-ing of risk information, end-to-end connectivity, massively reduced error rates, built-in compliance.
For simple, off-the-peg SME business, brokers can arrange cover within minutes, theoretically leaving them hours and hours to chase new business that would otherwise have been spent on paperwork.
But some brokers have genuine concerns above and beyond the software's limitations.
Bob Pluck, director of South Essex Insurance Brokers, says there is real concern within the market that when a broker forwards information via Imarket to a host of insurers, those insurers can then store that data for use at a later date or even sell it on.
He says: "It is becoming a regular feature of our industry that leads are bought and sold and have intrinsic value even if an insurer doesn't want to underwrite a risk at that time. Why should we pass that on to insurers?"
There are also doubts about how Imarket can facilitate schemes business. If Imarket essentially commoditises SME business by making comparable quotes possible using set data, where does that leave unique schemes?
According to Pluck: "What about situations where brokers have a specific relationship with an insurer to underwrite a certain type of business at preferable rates? It is difficult to see how Imarket can deal with that."
Questions too long
And despite claims that Imarket saves time, some brokers maintain the question sets that need to be completed for any risk are too long.
Ian Mantell, premier of Manor Insurance Services, said: "The questions are some of the most convoluted I have ever seen and that is why I won't be using it. It is unfortunate that insurers decided at an early stage they would go back on their word to keep it simple.
"For brokers that know their stuff Imarket is a waste of time. It is clear when taking details of a risk which writers would be competitive and it is quicker and easier to go to those insurers direct."
It would seem then that despite the level of expectation around Imarket, support from the broker market is far from unconditional. The common line that brokers are slow to take up any new technology fails to take into account that there are some genuine grievances about the running of the project so far.
Grant Ellis, chief executive of Broker Network, says: "The next year or two will be make or break for Imarket. It is not helped by the way every decision has to be decided by a committee.
"Currently the main benefits are for the insurers but until brokers can see real value for them then the project is destined to never get off the ground." IT