Etrading rather than ‘e-transacting’ needs to be the focus moving forward if insurers and brokers are ‘to really develop a meaningful understanding of the business and opportunities’
It’s undoubtedly been a difficult year thanks to the ongoing Covid-19 pandemic, which has driven a migration across society to online ways of working - a trend reflected in this year’s Insurance Times etrading survey results.
The past year has, therefore, seen insurers - supported by software houses - push bigger and more complex risks into etrading channels.
Simon Bloomfield, head of imarket at Polaris, said: “The low hanging fruit - like shops, offices and tradesmen - is a well-trodden path, so we’re seeing much more complexity coming into etrade, like commercial combined [and] mini fleet.”
However, this year’s etrading survey showed that brokers are waiting longer for etrade referrals to be cleared. According to the survey of 850 brokers, average times have increased across the board.
The most typical wait was a day, cited by nearly a third (31%) of brokers, compared to 20% in last year’s survey.
And the proportion of those waiting two days or more has nearly doubled from five to nine per cent from 2020 to this year.
The increase in the proportion of those waiting for half a day for a referral was less marked, up from 17% to 19%.
However, reflecting this picture of longer waiting times, the proportion who wait only an hour on average has nearly halved from 9% to 5%.
These figures are in line with the survey’s finding about brokers’ expectations about how long they are prepared to wait for a referral to be processed.
For example, 32% of brokers expect to wait one day, 19% will wait half a day and 11% are prepared to wait one hour. Only 6% regard two or more days as an acceptable waiting time for a referral, according to the survey.
These stats demonstrate that the pace of referrals has “really slowed down”, said Savan Shah, head of research at Insurance Times.
In particular, feedback from surveyed brokers showed that smaller firms feel they are being kept waiting while insurers process referrals from their bigger rivals, he noted.
Jaime Swindle, managing director of Bravo Networks, recognised the frustration with referral waiting times highlighted by Insurance Times’s etrading survey.
“It isn’t a surprise that there is a huge amount of frustration coming out in the results, especially after the exceptional circumstances of the past year with the move to working from home and lockdown, a total shift in engagement and operational pressures across the board,” she said.
Changing circumstances
So, does the picture of slower referral times highlighted in the survey reflect the peculiar conditions of the past year, or instead mirror deeper shifts in an etrading landscape that is handling greater volumes as well as bigger risks?
One factor that can’t be ignored is the rapid adjustment to remote working in the early days of the pandemic.
Thomas Stuart, insurance development director at Acturis, said: “At the start of the first lockdown everybody’s productivity took a downward trajectory, at least temporarily, but that effect is lessened as time goes on.”
Ian Newman, head of SME strategy and development at Covea Insurance, is pleased with the “really positive feedback” about how the insurer has managed referrals over the last year.
It is important to remember the contribution of etrading to keeping the insurance show on the road during the past year, added Bloomfield. “Insurers and brokers have been pretty resilient during the pandemic because of etrading,” he said.
Referrals, however, are an “essential” element of commercial etrading, he noted.
Homes for square pegs
In addition to the operational pressures that working in a pandemic involves, the risk landscape has heightened over the last 12 months as part of the hardening market, said Swindle, who ran etrading for NIG before moving to her current role.
The push by insurers towards etrading has heightened expectations among brokers that their referrals will be handled speedily and efficiently.
Bloomfield defended insurers, despite the survey findings, arguing that they are generally doing a “decent job” in meeting brokers’ expectations.
Brokers should look back five to 10 years when etrading was much less common, he said. “If doing commercial combined, you would maybe get a response a week later.”
Referrals become more of a requisite on what are “by definition” more complicated products, which will have an impact on referral response times, Bloomfield acknowledged.
More complex risks will be less easy to fit into neat boxes defined in online question sets, which may be a factor on referral times as more of this business is etraded.
Stuart said: “We all know not every business fits into a neat little category - referral is about things that don’t fit square pegs in square holes.”
And accommodating the products from a range of insurers within a standard question set for a particular product line can be a “really tricky” balancing act, Stuart added - “it’s like squeezing the balloon. If you squeeze the question set down, it will balloon out referrals, but if you make the question set big, you are going to have to ask more data upfront”.
Speeding up
However, a bit more time inputting data at the initial stage will work out better in the long run, said Bloomfield. “Most brokers want contract certainty - they would rather be sure that customers are properly covered and not have problems at the claims stage.”
Plus, for him, it is important not to fob off brokers by referring quotes that should be declined at the outset.
AXA is working with Polaris to create industry changes to question sets – these are designed to speed up referral times.
AXA believes the Quick Decision capability on its extranet for more complex risks creates clarity on the risks more likely to referred because it allows brokers to include additional notes and materials for insurers’ underwriters to assess.
These features are designed to help speed up the internal consideration process so that faster decisions on cases can be made.
Covea, meanwhile, aims to empower its experienced trading underwriters to ease the referral process by offering added flexibility on premium and terms. Newman said: “The trading team are there to deal with referrals and ensure we’re adding value for brokers, not wasting their time.”
The key feedback from Bravo’s brokers is that the process should be etrading, not “e-transacting”.
Swindle explained: “Whilst this may be more efficient, it creates a far more transactional relationship and restricts the opportunity to really develop a meaningful understanding of the business and opportunities.
“Digital has a huge part to play going forward, but to be successful it needs to support those personal relationships that will always be the driving force behind our industry.”
No comments yet