Wayne Jefferson: ‘ETrading will ultimately become more complex’

As insurance risks become more multifaceted and ”insurers widen [their] product footprints”, it is inevitable that “eTrading can and will ultimately become more complex”, according to Wayne Jefferson, head of eTrading at software house Applied Systems.

Speaking exclusively to Insurance Times, Jefferson was sharing his insight after Applied Systems secured second place in the publication’s Five Star Rating Report: ETrading 2024, published in May 2024.

The annual report, which this year was based on a survey of more than 700 UKGI brokers conducted between January and March 2024, ranked Applied Systems second out of four software houses reviewed by the research.

Posing the right questions

One service metric explored in Insurance Times’ report is usability and trading ease.

For Jefferson, this comes down to having the right question sets available.

He explains: “We have to try and create a flexible approach where there’s a balance between usability and accommodating data requirements for complex products. 

”We don’t want unwieldy question sets that become way too complicated for a customer and put them off eTrading.

”At the same time, we understand that some insurers – because of the sectors they are working in – might want to ask some more innovative questions as time moves forward.”

Around 42% of the UKGI brokers polled by Insurance Times rated Applied Systems’ question sets as “good”, 23% said they were satisfactory, while 12% thought that the question sets were poor. A minority (4%) stated that the software house’s question sets were very poor.

Jefferson says that Applied Systems continuously reviews its question sets in “an ongoing process” with brokers and insurers.

He continues: “We try to make [our question sets] as universal as they can be for a particular risk, but inevitably, you may have a broker that has a more specific scheme in a certain type of industry and, therefore, they require something more unique.”

Tipping point

Jefferson notes that there is still a great deal of business that is not eTraded. This includes “huge and complex” risks, such as British aerospace.

Applied Systems liaises with brokers to continually review question sets for non-eTraded risks too, making sure these also meet market requirements.

For Jefferson, the “tipping point” between eTraded and non-eTraded products will continue to move, but some products – such as tradesman insurance or property owners’ cover – will generally be traded digitally.

This contrasts statistics from the Five Star Rating Report: ETrading 2024, which found that 67% of respondents would place more business via Applied Systems if more product types were available. A further quarter (24%) noted that they would place more business via Applied Systems if existing products were eTraded more effectively.

Achieving balance

Other findings from this year’s report include a reduced product decline rate and similarly reduced referral rate on products eTraded via Applied Systems – 20% of broker respondents observed this trend across both metrics.

Jefferson explains: “We work with insurer partners to try and influence that because the rating and decline rates are obviously all managed by the insurer.

”A decline rate – that depends on the broker. If the broker is putting in risks that aren’t acceptable, then insurers are going to choose to decline them as they don’t want to take that risk onto their books.”

In terms of providing training and support, 36% of respondents said Applied Systems was good at this. Around a third (30%) said the software house was excellent here and 11% noted it was poor.

Applied Systems has an online university that includes learning tools and videos – this launched in 2021. It also has a support desk, which is available 24/7.

Jefferson adds: “We have spent a long time training our own staff and making them as capable as they can be. We make sure that we recruit industry focused people, not just technically focused people. We have to have a balance.”