UK software company 5GM is to challenge the dominance of the insurance industry's Wise trading system with a bespoke software package that can be bought at a fraction of the price.

More than 40 insurance companies are subscribers to the Wise world-wide system which records their email transactions at a cost of between £2,500 and £100,000 a year, depending on the volume of mail sent. Members include brokers Marsh and Aon and most Lloyd's insurers.

Emails sent outside the Wise system are potentially vulnerable to interception as there is no inbuilt secure pathway on the internet for their safe delivery.

However, 5GM's Mail Enterprise email security software, launched at the Windows 2000 show at London's Olympia on November 22, costs £1,995 per company. There is an additional charge of £30 per email user.

Businesses that have signed up for 5GM's email application include the Royal Mail and the Inland Revenue.

Robert Zysblat, chief executive of 5GM, believes his system could eventually replace the insurance industry's Wise electronic communication platform.

He said: “While there are other applications that provide some of the features of 5GM's products such as encryption and document archiving, few provide the comprehensive set needed to establish legal admissibility when sending and receiving electronic messages.”

In addition, the software company said its software is cheaper than many other personal computer based email security systems because it is installed on a company's computer server or internet gateway.

Kevin Ashby, chief executive of Wise, which runs on a not-for-profit basis, said comparing the comparative cost of the two systems was not accurate.

He said: “It is nice to be mimicked after Wise has been on the market for 15 months. But most competing solutions work only for one party to a transaction. Wise covers both parties through a binding agreement and maintains a centrally-held record of sent and received insurance transactions.”

Wise, like the 5GM system, works from a company's email server.

Zysblat acquired the basis of his email security software from National Westminster bank last year during its lost takeover battle with Royal Bank of Scotland.