It’s no secret that e-trading, and technology more generally, has changed the face of insurance and the wider business landscape. The personal lines space in particular has undergone significant change in recent years as commoditisation and aggregators have loomed over the shoulder of brokers’ intermediary role. But when it comes to commercial lines, are brokers still running the show?
“Commercial lines e-trading in the intermediated sector is in a completely different position in terms of maturity compared to personal lines,” Adrian Coupland, SSP customer and marketing managing director, told Insurance Business in an interview. “Personal lines commoditisation and electronic trading is the norm and has been for five, six, seven years. There has been a need to drive efficiency through that channel,” he said.
But in the commercial lines market, there is still a huge way to go when it comes to driving automation, efficiency, and effective trading through the industry, he said – though that may be good news for brokers.
“The platforms can support commercial lines e-trading as well as they can support personal lines e-trading, but the customer demands are quite different,” Coupland commented.
Insuring a factory or a hairdresser’s salon is inherently a more complicated process than taking out a home contents policy, and clients are still seeking out the advice of brokers in droves.
“The products are far more complex in the commercial space, and therefore what’s happened is certainly a lot of the commercial lines products and insurers have been less pressured into driving e-trading through, because actually insurers still use intermediaries for commercial lines,” the SSP exec said.
The evidence seems clear: brokers have retained dominance in the commercial lines space, with far more business going through their channel than goes direct to insurers.
“So, as a result of that, process drives demand, and actually there is so much business in commercial lines which is still not electronically traded,” he noted.
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