Brokers still hoping the internet is just a passing fad should take a look at Screentrade. This Misys-backed system for selling general insurance over the internet is about to come of age, as a £1 million national advertising campaign extols the virtues of web-purchasing.
With many of the nation's leading insurers signed up to Screentrade and offering car, contents and travel insurance, it is clear that those who dismissed the Misys initiative were guilty of wishful thinking. The brand promotion about to hit the streets will propel Screentrade into the national consciousness and encourage every consumer to give it a go. "Brand" is the key to just how successful Screentrade might become – it is only through a credible brand that internet sales can be built. Rest assured that Misys and its insurer partners will be investing very heavily in brand promotion.
Personal lines brokers must react to this threat. They have to exploit the internet themselves – and with so many insurers out there, all offering different quotes even for "commoditised" products, great opportunities exist to banish consumer confusion.
This is just as true for commercial lines brokers. We report this week on a classic case of how intermediaries can exploit the net. Paul Robertson of Midway Insurance Services has devised a way of selling a schemes service for blocks of flats on the internet. Other brokers can tap in a client's details and very quickly produce a competitive quote.
Of course, getting this far, and going further, is not a cheap option. Robertson spent around £300,000 on his site. Our technology correspondent, Ross Hall, says an intermediary may not see much change out of £4 million for e-commerce start-up costs.
"Option" is the wrong word, in truth. The internet will become as much a part of life as the telephone, and intermediaries have no choice but to adapt.
Costs will fall quickly, but the crucial thing says Hall in a paper he is delivering at an insurance congress in Bournemouth today (and which will appear shortly in Insurance Times) is that it is no use just using the internet to replicate existing business practices. According to Hall, "this negates the real benefits of e-commerce, which are when the client is in control and the intermediary's costs fall dramatically. When the client is able to administer their own policies, doing anything from a quotation for temporary cover to performing a mid-term adjustment, an intermediary's costs fall to between one-tenth and one-twentieth of the costs in the real world."
There are many other business implications for intermediaries who launch into web selling. Once they start down this route, the chances are that they must completely reinvent themselves.
These are the biggest issues currently facing the broking profession, but getting through the crises of the day is still the number one priority for too many people. That thinking has to stop.
