Not many brokers would say ‘no’ to saving money while improving customer experience. Yet, when it comes to E-trading, many are doing exactly that. It’s not for every customer, every risk or every broker. E-trading isn’t going to replace every other channel and it wouldn’t be in the interests of insurers, brokers or, most importantly, our customers for it to do so. But many are missing out on a valuable opportunity, especially in the SME market.
SMEs have more choice than ever before in how to purchase insurance. Intermediaries continue to be a vital part of this, even while technology changes the way customers want to receive services. As an industry, we have to understand customers’ priorities and deliver a service that suits them. Running an SME is a full-time job and they need easier, faster access to relevant products at the right price. They want value from broker and insurer. That’s where e-trading comes in.
E-trading offers a way to reduce costs by streamlining the parts of the business that can be standardised and liberating time to focus on parts that can’t.
E-trading doesn’t just mean quote-and-buy via insurers’ extranets because, while they deliver many benefits, they only provide one quote at a time that can take anything up to 12 minutes to complete. Using software houses to get quotes from across the market enables the broker to input risk details once and get many quotes, saving a lot of time. It also cuts transaction costs for both broker and insurer, easing pressure on margins. The increased flow of data means insurers can enhance products more quickly, reacting to changing customer needs and improving claims processes too.
IT investment isn’t just a way of reducing cost and resource. It is an opportunity to focus more attention on service too. New channels can bring down transaction costs, giving insurers and brokers more time to focus on helping small firms to grow through more meaningful advice and support – much of which can itself be delivered digitally. Not everyone wants to seal the deal with the click of a mouse. Many still like the reassurance of a handshake – and brokers often feel the same way. It is a feeling we understand and it isn’t incompatible with e-trading. Using telephony or webchat is appropriate where a broker needs a little support to e-trade but we will all benefit if e-trading becomes more common, supporting other channels with a fast, efficient alternative.
Talk of the demise of brokers in the SME insurance market has been exaggerated, but more adaptation is needed. E-trading is a huge opportunity to achieve that. If insurers can learn to embrace technology, anyone can.
This article originally appeared in Insurance Times on 2nd April