For insurers it’s a no-brainer, but can smaller brokers make e-trading work for them?

Broker e-trading is set for a boom in 2012 as insurers ramp up their offerings.

Today, AXA reveals its plans for 2012 with four new products launching immediately and another 10 hitting brokers’ screens by the end of the year.

Watch closely for RSA and NIG, who will unveil their products this year, probably sometime during the spring.

Meanwhile QBE has former RSA SME chief David Greaves building its e-trading proposition.

Aviva and Allianz are well established with their propositions, and they’ll no doubt be looking to get as much full-cycle capability into their products as possible.

To its credit, Groupama looks well ahead of the game on e-trading, but you’d expect that from a SME broker-only insurer. The insurer push into e-trading should help to save them money and free up resources to attack the higher premium business. This is likely to put even more pressure on the ferociously competitive mid-market space.

The logic of e-trading is undeniable for insurers. But for brokers, especially smaller ones, the push into e-trading is likely to lead to looser and more isolated relationship.

Most insurers, under pressure from a soft market and a squeeze on expenses, just don’t have the resources or desire to foster close relationships with smaller brokers, as the premium income is too small, even if there are some juicy profit margins. Notice the way RSA cut loose 200 broker relationships to throw resources at the top earners. The key to winning over hearts and minds will therefore be in the simplicity of the e-traded products, but perhaps more crucially, the quality of back-up support.

For example, RSA has a Glasgow-based team that will service brokers with E-promise, and AXA has the Bolton-based National Training Centre. Those without responsive and quality back-up support are likely to find themselves sidelined, no matter how well their products are designed.

JLT’s time is now

JLT is flying once again, with 7% organic revenue growth reported for last year. JLT has already overtaken Willis and Marsh in the UK. The key to its success, like Hyperion, is having a strong footprint in emerging markets.

Last year also saw JLT’s conglomerate parent Jardine Matheson raise its stake in the broker. That move has poured some serious cold water on any prospective bid from Aon or Marsh. The days of JLT being a smaller player vulnerable to a bid from a bigger broker are truly over.