I initiated one of the very first electronic trading initiatives in the UK Commercial Lines market back in the early 1990's. This award winning project CLEO (Commercial Lines Electronic Office) gave me a great insight into requirements and what does/doesn't work.
Firstly, the buying psychology is different in CL to personal lines. In CL, buyers and brokers are working in a professional capacity and have to show due diligence, whereas individuals buying directly on behalf of themselves can behave in any way they want (usually price driven!).
Secondly, CL is more complex and cover, even in packaged commercial, is sectionalised with more relevant and mandatory add-ons. SMEs need more advice as a result and seek out brokers to give it. That is why brokers have always dominated the CL sector.
Thirdly, comparison quotes in CL based entirely on price is only likely to lead to inappropriate cover and, further down the road, disputed claims.
The answer is to compare on price, cover and Ts&Cs. That is what CLEO set out to do and brokers were expected to respond well to it.
In reality, the professional, top end of the broker market bought it but the bottom end of the market bought our competitor who only compared on price.
So, that tells me that all brokers are not equal. Some add no more value than a comparison site but quite a few do a really good job of advising their clients.
In its new report “UK Commercial Insurance Distribution 2018,” GlobalData examined distribution trends and how purchasing behaviours and preferences are impacting market share. In particular, it took a closer look at SMEs and the growing slice of the pie for “brokers”. For commercial insurance distribution in the UK as a whole, GlobalData cited brokers’ dominance, with an estimated footprint of £1.33 billion in 2017. In terms of business size, brokers are said to be getting a piece of the action in the SME market as well – albeit through other means. “The broker channel had been steadily declining up to 2016, but the emergence of the digital channel in commercial insurance has reversed this,” said Ben Carey-Evans, financial analyst at GlobalData. “Price comparison sites, which are classed as brokers as they refer customers on to insurers, have established a foothold".