The Knowledge - e-trading: Simon Ball interview

How do you find yourself at PowerPlace?

It’s a relatively small and incestuous industry, and I’ve had various discussions with the guys at Towergate about life and e-business. We are all learning and figuring out what’s going to work. I was delighted when they gave me the call.

Tell us about your background.

I have a background in technology and e-commerce, did some work in commercial lines and saw the opportunity: I raised capital to start an online marketplace with parallels to PowerPlace. The noticeable difference is that it focused on selling direct to SME customers. Still, many characteristics of what we tried to achieve with Coverzones are relevant to PowerPlace.

What went wrong with Coverzones?

The reality is that we and our investors didn’t have the financial reserves that were necessary to build the business and create the momentum that you need to be successful. That’s one of the fundamental differences with Towergate.

Towergate has the financial horsepower and long-term view that is needed to build a successful business. The resources are available to do the job properly, and do what’s necessary to make this business a success.

What does success look like?

Success will equal significant growth and significant change.

Towergate chairman Peter Cullum has been very vocal about his focus on PowerPlace – was that an important factor for you?

It’s a key reason I’m here. Peter Cullum is one of the stand-out characters in this industry and someone whom I admire immensely. Layer onto that a passionate belief in the value that this business brings to the marketplace, and it’s a powerful combination.

How has the market developed since you began working in e-commerce in 2005?

We are in the early stages of online distribution and that’s an opportunity. I’m impressed by the amount of column inches dedicated to SME and e-trading. It’s front of mind as a discussion, but it’s the beginning of a journey.

Has the commercial lines sector been too slow to adopt new technology?

Some mistakes have been made in the dash to go online, and that has had an impact on commercial lines. There are mistakes that everyone recognises in personal lines, and so everyone is anxious that we don’t take out the value in commercial. So yes, it’s been slow. Is that a bad thing? I don’t think so – if it takes a bit longer to get it right, then fair enough.

Should brokers remain at the heart of commercial lines transactions?

It’s a question of segmentation. At one extreme, you have someone buying a liability policy for £100 while, at the other end, someone might be spending £100,000. How on earth can you view those as the same? At £100,000, the need for interaction, risk assessment and advice are fundamental. That’s what the broking community does extraordinarily well.

How far will e-trading go in commercial lines?

When I first got involved in e-commerce, people used to say that no one would ever spend more than £20 online. They might buy a book, but never a piece of fine art. But you know what? Today people are spending hundreds of thousands of pounds online. I’m not smart enough to tell you where the limits of things will be in five years’ time.

Are brokers put off e-trading by the complex question sets required by insurers?

At the micro end, we have a less complex requirement, and therefore less a complex question set. We have much more complex requirements at the larger end, but the process can evolve quite naturally, from complete automation through to online activity followed by interaction.