SYSTEMS SCENE

It remains a sad fact of life these days that the honest and law abiding citizen not only has to fund their own life style, but also those who do not believe in, nor have any desire to follow such principles.

This is particularly so in the case of motor insurance where the Road Traffic Act requires insurers to provide indemnity, not only to their own policyholders but also to third parties where a non-insured motorist is negligent. Uninsured and untraced drivers kill 160 people and injure 23,000 every year.

The total cost of these claims is only partially covered by the levy insurers have to make to The Motor Insurers' Bureau. In many cases an insurer has to fund the claim without any recourse to the MIB. Currently it is estimated that uninsured driving is costing £500m every year, adding around 10% to every motor insurance premium.

At last technology is beginning to play its part in addressing the problem in the form of The Motor Insurance Database (MID). Initially insurers were required to provide details within 14 days of each and every private motor vehicle they insured, but the period has now been reduced to seven days.

Commercial and Fleet business was always going to prove more difficult to address; simply because insurers generally do not hold the specific vehicle details required for the database to function - such as the registration details. This has now been overcome with fleet managers being made legally responsible for the provision of data. There are now over 35m vehicles registered on the database.

Figures recently released by MIB show how the database is beginning to have a real impact on the number of claims made as a result of accidents involving uninsured motorists. They fell by 5.8% in 2007 and by almost 10% since 2006, in financial terms a saving of at least £3 0m a year.

What is even more encouraging is that in 2007 the police seized over 150,000 uninsured vehicles, one every three minutes, of which 40% were disposed of or crushed. In total over the last two years the police have used MID data to remove over 200,000 uninsured vehicles from our roads. This is likely to increase from 2009 when Continuous Insurance Enforcement will be introduced making it an offence to keep a car without insurance, whether or not it is being used (unless a SORN notice has been filed).

These figurers can only improve still further now that fleet and commercial motor vehicles have been added to the database. This will give the police greater confidence in checking vehicles. They will no longer face the possibility of time-consuming enquiries into a suspected uninsured vehicle only to find that it was correctly insured after all.

It will also make it even harder for those hell bent on continuing to drive uninsured. Just how many of them started to drive vans instead of private cars knowing full well the details would not be available to the police via the database?

With the fleet policyholder being made responsible for updating the database you would have thought that their job would be made as easy as possible. However, as usual when it comes to IT, insurers have not agreed a common solution.

Some insurers have arranged for the information to be sent direct to the database, some via the broker, others direct to themselves. With some insurers there are even different rules depending on location or type of policy! The only technology involved in some cases is the scanning of a manually completed template which is then sent by email to the insurer.

A number of commercial policyholders and brokers, especially where large fleets are involved, will therefore be finding compliance with the requirements difficult, costly and timeconsuming. They need to explore the benefits of making the process as seamless as possible.

The problem is that a number of diverse systems are involved, but there are software houses with experience in this area. One such company is Kewill. Many insurers and software houses are already using Kewill InsuranceXchange (KIX) technology to overcome connection and data conversion issues.

One leading personal lines insurer currently works with Kewill to not only send electronically the required data to MID but also to receive alerts, to manage any exceptions, and for confirmation the data has been accepted. There is no reason why similar assistance cannot be provided for commercial motor. For example Kewill could assist fleet managers. They could access a personalised Kewill portal to upload relevant data automatically from their existing fleet management system. Kewill will then convert (if not already in the required MID format) and then connect to the MID, monitoring for any exceptions.

So the message is clear. An IT solution is possible. Not only will it simplify the whole process, it will also monitor that data is reaching the MID within the stipulated time frame, thus avoiding the possibility of action being taken for non-compliance with the law.

Finally on the subject of the MID, readers may be interested to know they have recently introduced a very useful website; www.askmid.com where motorists are able to check that the database has correctly registered their vehicle as being insured. If confirmation is not forthcoming then the motorist should notify their insurer immediately.

Towergate join Countrywide

Towergate Underwriting has joined Countrywide as their seventh Strategic Partner thus increasing the range of specialist and traditional insurance products available to the network's 700 members. They join existing members Allianz, Axa, Fortis, Groupama, MMA and Zurich.

James McCaffrey, sales director underwriting, Towergate Partnership says, "The partnership between Towergate and Countrywide not only increases the network's offering to members, it enables us to expand our offering to the widest range of intermediaries. Towergate are committed to the broker market and will be working closely with Countrywide to further develop the product offering to members, including access to Towergate's haulage division via the Countrywide Fleet team."

Mark Ryder, commercial director, Open International says, "When Towergate's acquisition of Open International was announced we were approached by a number of members asking when they could gain access to Towergate's products. We are delighted to now be able to provide a comprehensive range of benefits to members including increased commission levels, access to specialist products, Partner Broker and Countrywide Club deals and a dedicated team for members."

Ryan opt for Acturis

Ipswich-based Ryan Insurance Group has chosen Acturis to assist in driving forward its expansion in the commercial sector. All 31 members of its commercial team will use the system to trade with its key commercial insurers, with connectivity and compliance being at the heart of the initiative.

Speaking on behalf of the group, Tim Ryan, managing director comments, "We are committed to our independence and continued growth through our reputation for servicing our clients well. Our purchase of the Acturis system is tangible evidence that we are prepared to invest in our future and we look forward to being able to trade with our key partners in a connected and compliant way."

Open GI eAggregator solution

Kwik-Fit owned Express Insurance and Gocompare.com are generating thousands of motor insurance quotes a day after going live with Open GI's new fully hosted eAggregator solution.

eAggregator complements Open GI's ecommerce solutions, eStarter and eBroker, allowing brokers to seamlessly connect their Open GI quotation engine to aggregator sites. Gocompare.com is the first aggregator to be linked with many more in the process of signing up to take advantage of Open GI's panel of brokers. Since going live with the solution, Express is generating over 17,000 secure quotations a day. Full integration with the Open GI back-office system coupled with competitive pricing and the ability for the consumer to link directly from the quotation on the aggregator site to the broker's website without the need to re-key quotation data has had a major impact on the company's online business.

BIBA calls for tougher aggregator regulation

No doubt many brokers will be heartened by the news that the British Insurance Brokers Association is calling on the FSA to urgently review its Conduct of Business Rules for electronic introductions. This follows the findings of independent research into price comparison websites. The research raised concerns that the current FSA rules are not appropriate because they were finalised prior to the development of aggregators.

The research found that over half of the buyers interviewed did not fully understand the differences between each policy offered and 84% said that the details of insurance policies offered via price comparison websites can be confusing. In addition it also found that many sites use assumptions as the base of their quotations which can lead to consumers purchasing an inappropriate policy.

Eric Galbraith, BIBA chief executive, says, "I believe the regulator should now look again at developing more appropriate regulations to ensure that consumers are being afforded suitable protections. There are still too many people logging on and making a decision solely based on the price of a policy rather than the protection it offers them and potentially buying an inappropriate policy. Insurance products are complex and it is important to understand the cover they provide. Brokers are professionals trained to help. Aggregators and technology are developing rapidly and consumers must be sold the right policy."

(There's more comment about price comparison websites in this issue - see page 16)