PMI brokers want efficiency, accuracy and security, so where is market support for a single portal providing access to all insurers? Alistair Sclare investigates
Successful competitive markets are efficient. They are characterised by the quality of service provided, the ease of communication between the various parties to any transaction, a reduction in mundane and repetitive tasks, their cost-effectiveness, the consideration each party gives to its trading partners and their compliance with whatever rules and regulations apply.
Put simply, successful markets solve problems, not create them.
Sad to say, the healthcare market - in particular, the intermediary sector of the private medical insurance (PMI) market - is not as efficient as it could be when judged against these measures.
In this economically squeezed environment, it is hard to imagine this having anything other than a detrimental effect on PMI brokers - and in turn, their customers.
One good example of this is that the intermediated market does not exploit the full benefits of e-trading. Some good examples are being developed, but most give little consideration to the value chain or the universal benefits of market co-operation. The most obvious example of what could be done is the development of a single portal for the request and provision of quotations in the SME market.
There are some interesting initiatives from individual insurers. As this is written, one carrier is launching an app for quotation production from an iPad. It can be used in front of the client, which is wonderful if you are a sole agent of the insurer concerned. But surely, to do their jobs correctly, brokers need access to more than one quotation from one insurer?
Should all in the underwriting market produce apps so that an account manager can sit doing quotations in a client's office? No. Good idea as it is, this development, like so many others, suits only one party. Instead of trying to make the market more efficient, it seeks to create a competitive advantage within the existing inefficiencies.
Perhaps it is time that the market addressed the wider problems. The current system involves numerous insurers all keying in large amounts of data, making mistakes then keying it all again if we are successful in writing the business. It is time-consuming, costly, prone to errors and the use of an app makes little difference.
It would not necessarily be simple to produce a single portal for quotation production, but the technology has been in use for many years in other classes of business. It is also extending into more complex commercial insurance covers, so it surely cannot be beyond us to adapt that technology to fit the PMI market.
Commercial combined policies are a great deal more complex than a PMI policy, so if they can do it, so can we. What is more, Healthcode have already done most of the work, so let's not kid ourselves that it is too difficult or cannot be done. There are other reasons why it is not happening.
One option, many solutions
When it comes to efficiency, the reasons for using a single quotation portal are pretty compelling.
To gain some idea of the administrative burden that using separate insurer portals can impose, consider the workload of a typical broker conducting 150 market reviews each month to ensure that clients are getting the best deal on their group PMI business when they renew.
If the broker contacts eight insurers in each case, that is potentially 1,200 instances of uploading quotes and 1,200 visits to get the responses, as a minimum. Scaremongering, maybe, but what is the alternative? Just ask for fewer quotations? That would hardly be in the interests of the customer and it would not leave the broker feeling secure that he has all the quotations his competitors might have.
