Online insurance broking has gripped commercial and personal lines in the UK, but Australian intermediaries are still resisting despite clients taking to the internet in droves.
Global insurance software house SSP found that brokers are increasingly using the web to deliver a 24/7 service to UK customers and that those who placed their niche products online found it boosted their client base and made it easier to work with other brokers on a wholesale basis.
Last April, Elliott Insurance Services partnered up with CGU to launch an online platform for tradesman product All Trades Cover. Despite the platform being relatively new, up to 40% of those that click for a quote advance all the way through to buying the policy.
CEO John Elliott said brokers risk losing business if they don’t embrace the web as their clients do.
“The UK market is quite different to the Australian one because of the growing acceptance of aggregators,” said Elliott. “But brokers here have an opportunity – before aggregators come in – to govern how they deal with clients online. Brokers should embrace it and start thinking of ways – outside the traditional square box – to make services available to clients online 24/7.”
While it may be difficult for brokers to compete with insurers in personal lines in the online space, business could be won in commercial lines such as SME, professional indemnity and general property.
“It’s difficult to compete in personal home and motor but having Compare the Market in Australia could be a sign that we are ready for the online world,” said Elliott. “We need to change our mentality as to what an online client wants because what they require is not the same as what the face-to-face client wants.”
However, some brokers believe commercial lines are far too complicated for the online space.
“Face-to-face business will always be more popular than online” Colin Cowden, executive chairman of Cowden, said. “I don’t see that changing. Customers value the advice given by people rather than having to go online. Commercial lines is far too complex.”
Cowden conceded that the aggregator model in the UK had resulted in the growing popularity of web-based business but that it was not without its problems: “The UK aggregator model is undergoing some stress at the moment and that makes Australian underwriters hesitant,” he said. “There will be some take-up, but it will be marginal.”