News...
Biba Conference Special 2009
Broker
Technology - Setting your sites
07/05/2009
With the internet often being the first port of call
for customers researching a business, Edward Murray questions why some companies
are failing to grasp the opportunity of an online presence.
Advances in technology have given birth to some of the stiffest challenges
ever faced by the broking market, but it has also been these developments
that have offered the solutions needed by brokers to take on their newest
rivals. However, questions remain as to how well the broker market is exploiting
the potential benefits offered by IT.
When it comes to assessing effective use of IT, the most obvious place to
look is at a firm's website. Most would now agree it is commercial madness
not to have one. The internet is the first port of call for anyone researching
a business or a product and not having an online presence will raise doubts
in a client's mind.
Even though a firm may not do any business through its website, not having
one will immediately put clients off. When it is possible to get a simple
shop-front website up and running for a few hundred pounds, there is no financial
or commercial reason why brokers should not have something in place.
Buckland Harvester is an excellent example of a broker that has taken the
time to revamp its online presence, while at the same time opting not to conduct
its business online. The broker also has a financial services arm and communications
director Adrian Stewart says the website needed to give a very clear flavour
of the overall company - letting people know what it does and how they could
get in touch.
He explains: "While the existing website was satisfactory, in many ways,
the deficiencies lay in users not being able to identify personnel, specific
specialities and a uniform corporate message."
Meriting an online presence
Mr Stewart adds: "We have resisted the temptation to allow users to buy
online as we much prefer face-to-face dealings. While we appreciate that other
brokers and product providers offer customers the opportunity to buy via websites,
as a commercial firm, we see this as more the domain of brokers and providers
who major on personal lines or basic life assurance products."
Many firms may indeed feel that their commercial lines focus does not merit
an online presence. But again, even though they may not conduct their business
online, without a website they will be alienating potential clients - making
it difficult for others to find out about the firm, what it has to offer and
what it could do for them. Passing up on these opportunities in such a competitive
market is surely not the wisest option.
IT has also made it a lot easier for firms to market themselves and this is
another area where Buckland Harvester has seem significant growth.
Mr Stewart says: "Over the past year or so, we have communicated with
professional connections, mainly accountants and solicitor firms in Manchester
via e-mail, using monthly news updates, that feature topical issues."
In turn, he says this has significantly raised the business's profile in the
local area and also driven a lot of new business.
Brokers also need to ensure they are making the most of the IT they have.
Jonathan Davey, Director at software provider SSP, comments: "Most brokers
can get more out of their systems in terms of the way they use them. We can
normally show them new ways of doing things, as well as different things that
they can actually make the system do."
The key point for brokers is that without having to revamp the IT they are
using, it is likely they could squeeze more from it. By creating operational
efficiencies, firms can cut the amount of time it takes them to do things
and improve the overall performance of their business. Whether it is producing
documents in a more efficient way or using the system to automatically carry
out certain tasks at a future date, this can all help create a firm that operates
at a higher level, both in terms of internal efficiency and the level of service
it offers clients.
For firms to really get a grip on their internal activities and improve them
significantly, the first thing they have to do is get an understanding of
what it is they are trying to achieve. If firms have an understanding of where
they want to go, then it also becomes a lot easier for them to speak with
IT firms and ask them for help in getting there.
It is equally important for brokers to focus on structuring their data. According
to Michael Graham, Director at software provider Sequel, "It is as dull
as it sounds but it is fundamental." If brokers do not collect and store
their data in a consistent and effective way, then retrieving it, using it
and analysing it becomes impossible. The principal is no different to keeping
and maintaining complete and well-ordered paper files, but the benefits of
doing so in an electronic environment are much bigger.
Storing data properly
If data is stored properly, it can be accessed and used by numerous people
at the same time and can also be analysed to huge commercial advantage. Firms
that do not take the time to make sure they are doing this are giving rivals
a significant head start and will find they ultimately become completely hamstrung
and incapable of operating, let alone competing.
Paul Ring, managing director at software firm Websure, comments: "Reducing
manual effort can enable the skilled resources to concentrate on bringing
in the business, rather than the administration of it. Technology gives administrative
savings, allowing more time to be spent on other aspects of work."
Turning the attention back towards the internet, there are ways in which brokers,
who do not want to trade online, can still use the web to generate business.
This is particularly true for those who have specialist scheme business.
Mark Armitage, Managing Director at Power Place, the online trading platform
owned by Towergate, comments: "If a broker is providing for care homes
with one scheme, from one provider then it is easy to offer an online model."
Although the broker may not initially be looking to move online, the point
is that using a simple scheme to create an online presence can create a number
of advantages.
In the first instance it opens up a new distribution channel to the firm and
broadens its reach to the market. In turn, this will create a stream of new
leads to follow up and potentially convert. Once the broker has secured a
new client through its online scheme, it is then possible to speak to them
about all of the other lines of cover on offer. In this way, brokers can take
a very small part of what they do online, and use it to create leads and convert
clients to their wider offering.
It is relatively inexpensive for firms to take a single scheme online and,
if it is in a niche area, then it is not going to create the kind of volumes
that will swamp the broker or affect his ability to provide an excellent service.
As such it seems this is an approach many specialist or commercial brokers
could employ.
While some brokers continue to see the aggregators as a threat, many have
turned to the aggregator sites and tried to piggyback upon the IT they have
put in place, the marketing spend they have at their disposal and cash in
on the huge volume of potential customers they drive to their sites every
day. Michael Lynch, Head of E-commerce and Marketing for intermediary Kwik
Fit Insurance, says the firm has been working with aggregators for over six
years and has sought to develop and maintain its technology to ensure its
compatibility with their systems.
However, he accepts the cost involved in such an approach is not one that
all brokers can subscribe to and also points out that the aggregator space
is already heavily polluted with key brands and sub brands, making it extremely
difficult for anyone new to muscle their way in.
Commenting on one other danger he sees in working with the aggregator sites
he says: "Companies failing to build brand awareness are in danger of
becoming overly reliant on the aggregators and bigger brands." In turn
this may lead clients to question the role of the smaller broker and what
it is they are actually adding to the process.
Significant benefits
Clearly, working with the aggregators is not all bad news and there can be
some significant benefits. However, it is true that the relationship will
only work if both parties know what to expect and have taken the time to line
up their offering accordingly.
Jeremy Moll, Commercial Director at Compare The Market, says generating strong
sales requires a strategic approach. It is not necessarily about being the
cheapest, and he says research shows that 50% of visitors to the site do not
buy the lowest quote. He comments: "It's about having a competitive,
appealing offer, and often a recognisable brand. In addition, it's vital that
the journey for customers that click through to buy the product is a simple
one. We find that brands with a short and easy buying process benefit from
significantly higher sales than those who haven't focused on this element."
The truth of the matter is that no matter what area of business brokers are
involved with, using IT effectively is going to play an increasingly important
part in their business. Whether it is making internal systems work better
or using the internet to drive or transact more business, IT will be central
to the future success of the broking market. Most firms have realised this.
The challenge they now face is working out how to harness the benefits on
offer.
