With insurers’ quoting systems improving and business costs showing no sign of abating, brokers are beginning to assess options outside of the traditional panel set up, according to the CEO of Legal & General.
Last week, the insurer
revealed a new online tool that provides a household insurance quote in 90 seconds, by pooling more than 400 data sources. The mobile friendly system asks users five questions – the most complex being how many claims they have had in the last five years – and uses UK land survey data to provide an assured quote.
But while the move may sound more aligned with aggregators than brokers, there is room for the intermediated channel too – so much so that some may even be tempted to turn away from the panel model.
“We have a lot of brokers who are very interested in this, and who are starting to move away from panels,” Cheryl Agius, CEO of Legal & General, general insurance, said at a briefing last week.
“Obviously there’s a cost involved in running panels… but if you consider the potential market [brokers] could serve with something like this, it’s huge. Where they’ve got other parts of their business, for example where they have a large customer base and household is only one of those things, that’s where we’re seeing quite a lot of brokers step away from panels,” Agius commented.
While one specific insurer offering alone is unlikely to sway brokers away from panels, those that are already considering it, for various reasons, may be tempted by improved systems that cut down on time and costs.
“Everybody will have a different strategic reason as to why they might be looking at it, but if that’s the consideration they’re going through, and they have got a large customer base they want to tap into, actually this is what they are in discussion about moving towards,” the CEO explained.
“If [brokers] can see a broader market reach across their broader customer base, that is what’s being considered,” she added.
L&G’s new offering, SmartQuote, has already had a positive reception from both the insurance industry as well some external players who are considering bringing the platform onboard.
Currently, there’s not an equivalent in the UK market, according to Agius, who added that the system is the first step in an ongoing journey of automation that all insurers will have to make.
“There’s a lot of people who are taking existing customer data and trying to make that informed decision, but there’s nothing that genuinely as a brand-new customer, you walk through the door for the first time and have that journey,” she added.
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