The total volume of EDI broker transactions has fallen dramatically suggesting a growth in the direct insurance market
The latest figures on electronic data interchange transactions reveal the growing strength of the direct insurance market.
The total volume EDI transactions has fallen dramatically, according to survey by Instep, which monitors EDI trends.
The figures, which cover 2006, indicate that the total volume of household new business transactions via EDI fell from over 1m to under 500,000. Commercial vehicle new business plummeted from around 1m to less than 330,000.
Motorcycle new business was the only category to see growth with the number of EDI transactions rising from 238,514 in 2005 to 335,297 a year later.
One of the explanations for this shift is the continued growth of the direct market, which is taking business away from brokers, with a consequent impact on EDI transactions.
Instep conducts regular surveys of insurers to monitor trends in EDI across motor classes (private car, light goods and motorcycle) and household insurance.
As a percentage of total business, the survey reveals that EDI is the most established way of doing business particularly in the motor market. The results also show a growth in the use EDI in the household market, where it is less popular. The number of household renewals using EDI grew from 18% to 32%.
Of all the insurers who participated in the survey the most dramatic results were recorded by Groupama. In 2005 just 0.5% of new motorcycle policies were processed using EDI but this figure leapt to 81.6% in 2006.
Andrew Goldby, motor director, said: “Basically EDI just makes things a hell of a lot easier."
"It makes the whole process faster and more efificent,” he added.
The results also show trends in the percentage of EDI transacted via the main software houses. In the private car and light goods market, SSP maintained its strong position, processing 30% of all EDI cases.
But Open GI, which gained ground in motorcycle and cemented its position in household insurance, where dismissive of the results of the survey.
Mark Ryder, commercial director at Open GI, said: “Instep’s EDI survey is based on a limited number of EDI carriers and therefore does not represent the whole market.”
