Theo Duchen: Brokers of the future will be ‘half human and half bot’ when eTrading

More than two decades ago when Acturis was still being developed in the basement of Theo Duchen’s house, eTrading was not even born yet.

Back then, Duchen and his co-founder, David McDonald both worked as a partners for McKinsey, where Duchen ran the management consultancy’s insurance practice, during a time when most brokers still traded manually.

Having been fascinated by this and “how inefficient brokers were“, the pair set about to change this as the system then was “too cumbersome to respond to the needs of modern insurance”.

And just as the internet was gathering pace, Duchen could see the way things were headed and decided to launch Acturis in 2001 with his cofounder.

Fast forward to now and approximately 55% of brokers that use Acturis’ policies also transact via eTrading.

Duchen says it has been an “interesting journey” watching how the market has evolved in eTrading.

“We can see the mix between insurer portal [extranets] and broker management systems (BMS) and how it is changing,” he says.

”A lot more insurers and brokers are really embracing technology.”

In terms of the future of eTrading, he foresees it expanding into lines such as commercial and speciality, where risk is more complex – much of it is still manual as it cannot be simply underwritten by artificial intelligence (AI).

AI

However, Duchen also feels that as the insurance industry continues to embrace AI, brokers are set to become “half human and half bots” when it comes to eTrading.

With technology such as AI on the rise and the accelerating impact of the Covid-19 pandemic, insurers have naturally started to become more digitised.

For example, it was noted that the pandemic had fast-tracked the adoption and implementation of touchless claims – which refers to a claim filed with very little contact from a human, often via an app – during a roundtable hosted by Future Processing earlier this year (15 June 2023).

Duchen feels that the increasing use of AI will change the way eTrading is carried out.

”The next phase will be more AI, where the brokers are half human and half bots,” he adds.

“We can see the direction of travel now where a lot of the more forward-thinking brokers are starting to build up a little AI or data team, looking at this data, interpreting it and then thinking about actions.

“Automation is going to do more of the heavy lifting.”

’Well-positioned’

According to Insurance Times’ Five Star eTrading 2023 report, which polled 780 UK brokers, eight of the top 10 insurer portals are hosted via Acturis. 

For the seventh consecutive year, Acturis led the charge with a score of 4.13 out of five, up from 4.11 last year. 

Acturis hosts insurer eTrading platforms such as Aviva Fast Trade – the broker is able to log on and transact via the same system.

“It’s what we call multi-channel capability,” Duchen says.

”You have one product and it services the broker system channel, the broker portal channel and maybe other channels.”

The report also reveals that 55% of brokers felt that both BMS and extranets will become more dominant in three to five years. 

However, in the early 2000’s, many brokers did not want to deal with a startup because insurtechs were seen as “disruptors” to the market and the concept of the cloud had yet to pick up pace.

Duchen says: “Now anyone would look back and say, ‘you guys were well positioned.’”

’Tremendous journey’

He also explains that he had to outline to people what the cloud was, as the idea of hosting data online was foreign to most of the insurance market.

The Insurance Times’ Digital Adoption 2023 report, which surveyed 220 brokers, found that 45% of brokers had invested in IT cloud infrastructure, up from 41% in 2022. 

He continues: “At the time it was so hard to get in front of a broker and convince them [of an idea], but the willingness to listen to a startup or insurtech has since changed.

”As I always say, you don’t know what you don’t know. We’ve had a tremendous journey and it’s been amazing.”

Back then, resources and money were also scarce and like any startup, Acturis faced market scepticism.

Starting out in insurance, Duchen trained as an insurance actuary but found it “boring,” which then led him to McKinsey. 

However, he is proud that the business stuck to its guns and pushed forward.

“I could have gone back and got a normal job, but I would have regretted it for the rest of my life,” he says.