“This is a direct channel to customers.”
These words, from Travelers Europe CEO Matthew Wilson, might strike fear into the hearts of brokers. After all, with the launch of its online platform aimed at offices with fewer than 10 employees and less than £2.5 million in revenues, there is an obvious thought that this is yet another big brand looking to grab market share from a broker (see Travelers unveils online platform for small business insurance
Wilson however, offers another viewpoint – he believes that brokers will never lose their place in the market to a robo offering.
“I can’t see why brokers will ever lose a foothold to an algorithm based system that asks a set series of questions,” he said.
“When it comes to larger business, I am a big supporter of having an intermediate for a sale. Those deals are complex and there are lots of different insurance policies you can buy, there are implications based on who you’re dealing with – there are lots of things to consider that your average businessman or woman wouldn’t understand.
“However, at this end of the scale, with micro businesses with less than 10 employees, the complexity is less and the need for advice in terms of a face-to-face meeting is not there. I don’t think the majority of the people who use this system would see advice as something they’re willing to pay for. In addition, if you’ve got premiums of less than £1,000 then there is only so much advice that anyone can afford to provide.”
Certainly a handful of insurers have dipped their toes into the SME space. Allianz
has enjoyed an increase in sales from its Allianz
Business Services Ltd offering, while Direct Line For Businesses has around 400,000 direct policies. However, rather than seeing this as a threat to brokers, Wilson believes that internet offerings actually represent an opportunity – especially with the idea that small pieces of business could eventually grow into an account needing a broker.
“There are already brokers offering their own platforms and online platforms are helping to break down a boundary,” commented Wilson.
“So far they (customers) haven’t found an insurance company they trust – the industry as a whole has not got the best reputation. So I think what they really wanted was plain simple language they could understand around a subject matter about which they may not know a lot of detail, but if the transparency was there then they could make an educated decision without making it a full research activity for a week before they understood everything there is to know about insurance.
“They want to learn what they need to know about insurance without doing a degree in it.”
What do you think of insurers going direct with online platforms? Are they a threat to brokers? Leave a comment below with your thoughts.
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