New e-trade platform “exceeding expectations” – ERS boss

ERS chief executive Ian Parker has hailed the impact of the firm’s new e-trade platform for delivering a strong start to the year.

The specialty motor insurer began dealing with brokers through the platform in November last year, starting with minibus.

It now has eight products live on it, and Parker said its growth and popularity with brokers had “exceeded expectations”.

“It is a big step forward and has gone down very well with brokers,” he said. “We’re seeing more opportunities to quote than we’ve ever done before.

“Brokers really like the opportunity to put in the details and get the quote out straight away.

Bionic

Parker said it demonstrated that particulary low volume personal lines products were well-suited to e-trading. But he said ERS takes a “bionic” approach – half man, half machine – to business and said underwriters remained very important to the broker-only insurer.

“We still need to refer a lot of the more esoteric risks to our underwriters, so we’re not saying it’s the end of the underwriter,” he said.

“Our underwriters have got specialist knowledge that is very difficult to put into a pricing algorithm, simply because in some of the niches there’s not enough data.”

He clarified that not all products would be e-traded.

Parker added: “We are very much a broker-facing organisation. The relationships we have with brokers are essential to our business.

“We recognise that different brokers have different ways of trading and, for us, we wouldn’t be comfortable making everything an electronically distributed risk or product, so we want both to co-exist.

“If you’re in the mass-market only, like the bigger direct insurers, then they have very few underwriters because they don’t refer much business at all.

“It either fits their pricing or they don’t have the risk appetite to accommodate it. Our business is completely the opposite.

“Our business has a very broad risk appetite and a lot of those risks need to be manually underwritten.”

Growth

ERS last week revealed it made an underwriting profit of £12.5m in 2018, bouncing back from a £12.2m loss the previous year.

But GWP was down by £40m to £330m. Parker put this down to more disciplined underwriting

“We’re very much a margin focussed business,” Parker said. “So if the rate isn’t strong enough for us to feel confident of making our margin, we won’t write the business.

“That’s the philosophy we’ve got as a firm. It means more disciplined pricing, but also making sure we can underwrite at a margin.

“We’re seeing some strength now coming back into the retail mass market, which will probably flow through into the other more specialist niches, so we are looking to tentatively grow.

“But we’ll only grow when we feel confident that the margin is there and the rating strength is there to support our targets, which are very much around the bottom line and not the top line.”