Caught in the web

This year, commercial e-trading portal I-market has gone from strength to strength. In January, three of its six founding insurers - Allianz Cornhill, Norwich Union and Royal and Sun Alliance - announced a 10% discount to all brokers using I-market.

In April, underwriting agencies Primary Group and I-prism signed up to the service as Software Solutions Partners began piloting products ahead of an aggressive rollout. In addition, and only last week, insurer Ace confirmed that it was coming on board.

The first product that will be fully operational is shop insurance, so why has the system started here?

Andy Ford, head of business systems and e-commerce at Zurich, says: "Shop insurance is a logical first choice because it is the highest volume package product and can provide a foundation for related lower-volume products later on, such as hair and beauty and pubs and restaurants."

Shops insurance also covers every segment in package insurance, according to Phil Nunn, head of strategy at Norwich Union: "If we crack the standard package then others will be easy as we will already have an idea how it works."

I-market has been promising this all-singing, all-dancing system for some time, so do brokers believe it will really happen this year?

Pros and cons

Eric Galbraith, chief executive of the British Insurance Brokers' Association, says: "There is no doubt that brokers and intermediaries need to maximise the use of technology, and while I-market presents an opportunity to improve the process, it also presents a few challenges."

He adds: "Package policies are an ideal way of underwriting certain standard risks but not all policies are the same and it will be interesting to see the range and depth of policies that can be accessed through I-market."

Jim Noakes, distribution leader at RSA Commercial, admits there are some challenges in terms of getting brokers to buy in: "I agree that some brokers remain sceptical. The principal reason is that until now people have just been talking about I-market and brokers are more practical than that. They ask 'how will this benefit my business today?'."

According to Peter Knowles, strategy and marketing director at Polaris, the portal has seen some positive results: "So far this year we have had a 45% increase in transactions per month and in April this went up another 25%."

He adds that brokers are starting to change their perceptions: "This year at the Biba conference, people were asking how to get the most out of the system, compared to last year when they were asking what it was."

That does not mean all the hard work has been completed, as Mr Noakes says: "A problem is that we have focused on telling brokers about integrated products and we have failed to explain the other benefits that I-market has, such as claims tracking, for example."

Low awareness of its services can be a problem, agrees Brian King, spokesman for Ecclesiastical, an insurer yet to join the portal: "I-market hasn't really raised its profile enough and if it did then more people might join. It has relaunched its website and made it much easier to use, which is a step forward."

According to Ken Hutchinson, e-business trading manger at Groupama, changing culture is also a challenge: "Some people are worried about how this will affect relationships and complex lines but we have found that by putting the more straightforward products on I-market, our underwriters have more time in which to concentrate on the business that needs more care and consideration."

I-market has tried to raise its profile by offering discounts but can this work in the long term? Frank Woods, premium partner distribution manager at Axa, explains: "Incentives make a lot of sense. There needs to be a differentiation for online products and transactions completed the traditional way - a mixture of incentives will be needed to move people over and reducing benefits on traditional methods may be an option."

However, Mr Galbraith warns that the system must also be worthwhile for brokers: "Discounts and incentives to use I-market are only one aspect of its development. There needs to be real benefit to brokers, customers and, of course, insurers for this to be a 'must have'."

Make or break

So will 2006 be the make or break for the year trading portal? Not according to Mr Knowles: "Failure is not an option. After all, what is the alternative to address the cost issues? We have 70% of the market capacity and there are too many stakeholders for it not to work. As many as 83% of brokers that joined after 1 January 2005 are using the system regularly."

According to Richard Crocker, divisional director for distribution for SSP, the market will adapt to make sure the system works: "We have come this far and there has been so much investment in terms of time and money that if brokers don't embrace it now we will have to ask why and do what is necessary to encourage them to use it."

In the end, however, it is brokers that will decide. As Vivek Banga, head of e-commerce at NIG, says: "In the next two years, insurers' extranets, bespoke IT platforms and I-market will be available and brokers will be using them. They will decide what gives them the greatest choice and is quick and simple to use. That platform will be the winner."

As Mr Woods concludes, the more services available on the system the more likely it is that brokers will accept it: "It is critical to get publicity for this, as we can't do it alone. The more software houses and insurers the better, as this will mean we can offer brokers a genuine market, not just an insurers' club."