Consider a commercial insurance broker the next time you buy insurance online, until a recent resurgence of interest due to new online commercial products, they have not had a good Internet experience.
Brokers provide service, knowledge, quality products, claims help and advice as well as comparing insurance quotes, qualities that are rare or missing in the alternative self-service world of the online price comparison websites.
When direct personal lines cover became an acceptable method of selling and delivering insurance via the Internet, the soothsayers of business doom were crying the tolling of the death knell for the insurance broker as a profession. Even more so for the business insurance specialist intermediaries.
Commercial insurance was notoriously difficult to provide auto-quoting underwriting systems for and it was believed by the mandarins that commercial policies could not be sold online to an ignorant public.
It was imagined that all insurance business would be dealt with direct either by phone or online and the broker trade would decline.
What these people failed to realise at the time though, was that the broker business model, one based on comparing covers and tailoring policies to suit individual needs, was a time tried and trusted method that would re-emerge online as the peoples favourite method of buying insurance, albeit in a new bigger form of the price comparison site.
Commercial insurance price comparison websites were then predicted to replace the broker, as in effect they are providing the same comparative quotation service as the brokers but on a much larger scale.
Commercial Insurance Brokers realised that they were missing out unless they embraced the comparison site competition. Many of the larger and more Internet savvy brokers decided to take on the comparison sites and offer comparison websites of their own, often with great success.
They took their back office comparison systems and web-enabled them to provide a user-friendly interface. The larger commercial insurance sites now rival the big four price aggregators and many offer a wider range of covers.
With the ability to offer specialist products a broker has an advantage over a price comparison site, however many Specialist schemes from commercial insurance brokers can now be found on price comparison sites. You will often need to look deep and really research the market of quotes offered, to find them though.
Although many smaller brokers have signed up to the large price comparison websites, when you search for their products you are rarely shown these offerings. This is because many brokers have put tight underwriting criteria to the type of business they want from the comparisons site.
Often these restrictions mean that the price aggregator cannot quote their policy because of the restrictive terms imposed.
All online commercial comparison websites suffer from rigid acceptance rules defined by the underwriting company.
The fact that if for example, an office does not reach strict security requirements, then the office package comparison system is algorithmically instructed to decline the business.
Computer says No!
Consequently when the comparison sites quotes compared are returned to a prospective buyer, they are usually displayed in the order of cheapest first, showing those without any endorsements or cover restrictions.
Those smaller but maybe more relevant schemes that are maybe slightly more expensive or need some adjustments to the information entered to quote, are not getting a look in against the large insurers who can compete on price.
Many people, especially small businessmen on a tight fixed budget, mistakenly believe that the cheapest insurance is sufficient for their business needs.
This is particularly true of the sole-trader or self-employed tradesman who resents being told he must have public liability insurance to work on a building site for example.
His likely first port of call will be a search engine followed by a big brand price comparison site looking for the best deals.
Most commercial insurance brokers do not want this type of cheap liability business anyway, which is more trouble than it is worth if there is a claim.
They do want good bona-fide small business and registered companies for which they have the advantage over the price aggregators of offering not just specialist packed policies for shops,office, restaurants, pubs and commercial property but also a human face.
Today, more and more trade specific packaged policies are appearing on commercial insurance websites each month as bringing the product to market becomes easier.
Online brokers can offer telephone help, callback services, claims services, market knowledge and advice over price, human versus computer or simply just service. All things that are missing from the price comparison sites.
The new online commercial broker is taking back the initiative and levelling the playing field for the distribution of Insurance on the Internet.
On the whole the future looks rosy for the forward-looking broker who is willing to adapt and change from his Main Street outdated business practices and embrace the Web for all its potentiality.
On a cautionary note, many a local broker with traditional product offerings who does not adapt, will not be found by the general public and his market reach will always be local.
The Internet has allowed online commercial insurance brokers to introduce specialist risks and cover to the business market that would probably not previously been aware of the policies.
It has also spawned new risks itself such as cyber risks cover, professional indemnity and liability for consultants in every IT and online profession, and even commercial property insurance for web server farms.
The local broker is now international if he has the placement facilities.
Niche brokers with niche schemes are now providing these services to new global markets.