Open GI defiant amid Aviva's cheaper e-trade offer

Software houses will overcome the threat of cheaper policies available through insurer extranet sites.

Nick Giddings, chief marketing officer at Open GI, made the vow following Aviva’s move to make motor, van and home policies available to brokers cheaper on its own Fast Trade site than available through software houses.

He confirmed Open GI had spoken with Aviva about the move before it was announced, and that he expected the Fast Trade offering to mostly target smaller regional brokers without a software house.

Giddings said: “Aviva are going to have an overhead for distributing in this way via their extranet.

“They’ve got to maintain the extranet, and the EDI (electronic data interchange) charges per policy are not going to be that much more.

“The broker that chooses to get a slightly better rate, if it is a better rate, on an extranet for a white van man customer isn’t necessarily going to be getting an amount that an end consumer would necessarily even notice. We’re not talking big differences.”

Efficiency

He said the impact of Aviva’s decision would not be felt by the software houses, and that he didn’t interpret this as a disruptive move against the software houses by Aviva. He sees it more as a way Aviva refreshing their distribution routes for smaller brokers.

Giddings added: “A broker’s duty is to their customers and to conform with regulatory requirements they need to find their customers the best product.

“But they want to do this in an efficient way, and the most efficient way of doing this is putting it through a quote engine rather than going to different insurer extranets.”

He said he didn’t expect other insurers to follow Aviva’s suit in offering personal lines products cheaper on its own extranet site, due to the increased overheads.

But even if they did, Giddings thinks the core distribution model for major brokers to access insurers would continue to be through the software houses.

“If the saving to the consumer warranted them rekeying the information then it would make sense. But the saving doesn’t warrant it.

“The distribution insurers get from software houses is critical to them too. It’s the only route many of them have to market.

“The fact that the Fast Trade offering is available to all brokers and not just the ones that don’t have a software house is what has led to this debate.

“But the brokers that do all the volumes through software houses would never consider rekeying that information somewhere else, especially if it was only for the sake of a nominal saving.”