Insurance through platforms on the rise


By Krystine Lumanta

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A growing proportion of risk cover arranged through financial planners is being written on platforms, according to Investment Trends research.

The “July 2013 Planner Risk Report” found that last year on average, 34 per cent of new risk premiums were written via platforms whereas this year the number was up to 39 per cent.

The report, released in August, also found that where planners used platforms for writing insurance business, flows tended to be more concentrated to the insurance provider.

“Typically planners use 3.4 insurance providers each and their most used one gets 64 per cent of the insurance premiums they write,” Investment Trends senior analyst Recep Peker told financialobserver.

“However, for those who use platforms for writing insurance the flows are more concentrated where the primary platform gets 73 per cent of the flows.

“The reason for this is that for most platforms there’s a limited choice of insurance providers and because more business is being written on platforms this year, compared to the previous year, it becomes more important for insurance providers to be on platforms.”

In response to whether the trend for on-platform insurance premiums would continue, Peker said there were definite efficiencies in writing insurance via platforms, such as administration and saving time, although access to multiple insurance providers remained a key issue.

“The main factor inhibiting insurance business being written on platforms is the limited range of insurers on offer,” he said.

“Planners continue to ask for choice of insurers on platforms mostly because they feel this allows them to provide the best for their clients.

“When we asked planners what can platforms improve to specifically help them with their risk business, 48 per cent said they wanted to be able to select from a range of insurers.”

Other enhancements planners listed in relation to insurance were for processes to be easier, including increasing or decreasing cover online, enabling electronic signatures and allowing direct communication with underwriters through the platform.

The most widely used platforms for writing insurance were FirstChoice and BT Wrap, the report said.

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