As technology develops and becomes more sophisticated, portals have become essential tools in the daily life of an IFA. Johanna Gornitzki takes a closer look at how they work
As intermediaries entered the 1990s, they not only witnessed the development of more refined products but also saw the dawn of an important tool; the portal.
In the past, intermediaries wishing to obtain a quote for a specific product would have to phone up various life offices.
While this may have been a somewhat more intimate way of liasing with insurers, it was a time-consuming way of gathering information.
Luckily for advisers, a number of providers acknowledged this, and after a bit of tinkering, the first portal was eventually developed in 1991.
Launched by The Exchange, this groundbreaking videotext service, now called Exweb, soon became a popular tool among the IFA community.
Now, 14 years later, Exweb is no longer the only player in the market and is today competing with the likes of Webline and Assureweb for a share of the adviser marketplace.
As well as these portals, which are open to everyone in the market, there are also a number of portals restricted to members only - Bankhall's IFAengine being one of them.
There is also another portal, called MediQuote, which has been developed to satisfy the needs of private medical insurance (PMI) intermediaries.
Despite the cascade of portals that have entered the arena, Exweb still holds the prime position, and is currently providing about seven million quotes per month.
This is way ahead of the other portals, with Webline and Mediquote only providing 1.
7 million and 5,000 quotes per month, respectively.
Ralph Tucker, portal marketing and services manager at The Exchange, admits the portal's market lead is to a large extent, due to the fact that it was the first one to launch.
"Historically, we were in a monopoly position," he says.
However, Tucker argues that the increased competition has only been positive for the portal.
"Now with more portals in the marketplace, we have to develop and improve in order to take our market position very seriously," he says.
How they work Most of the portals provide similar facilities, which generally include offering quotation services and new business capabilities.
In plain English, the portals receive the required quotations directly from all the providers signed up to their systems.
These are then shown as a list of quotes on the screen, allowing advisers to compare the different offerings.
But while price guidance is the main purpose of portals, most of them also have links to research engines, such as Synaptics or Defaqto, which allow the user to compare the actual product and the provider.
Although portals in essence provide the same variety of services, the different portals - like any other business - try to put themselves forward as unique in one way or another.
Webline, for example, prides itself on the fact that the portal is fully online, and suggests that its smaller size has many benefits.
"With some of the portals you have to download different components. That is not the case with our portal as what we are offering is fully online. The fact that we are a smaller company, compared with some of the other portals, also means that we can react much quicker to new developments such as product launches," says Matt Humphrey, clients and operations director at Webline.
The Exchange, on the other hand, argues that part of Exweb's success is due to its sheer market size, with the portal covering a total of 45 providers and 290 different products, including protection products ranging from term assurance, income protection, critical illness (CI) to multibenefit protection links.
Trying to compete with both portals, Stephen Wynne-Jones, portal product manager for Assureweb, says it offers single company quotes, something that no other portal is currently doing.
"The service gives the user the ability to produce complex, multi-benefit illustrations, directly on the portal, without the need to enter individual provider websites, such as Friends Provident's select protection fund," explains Wynne-Jones.
One portal, which until now has not experienced any competition, is MediQuote.
At present it is the only portal that provides comprehensive PMI and cash plan comparisons for individual and group business.
It currently has 13 providers on the portal, however BUPA, which is by far the largest PMI provider in the UK, has so far refused to sign up.
Speculation suggests that this has made it difficult for MediQuote to successfully run its portal.
Rob Norledge, director of MediQuote, disagrees.
"From our usage numbers it is clear that we provide a worthwhile service," he says.
Regardless of whether or not MediQuote is finding it challenging to operate without support from BUPA, it will soon have to dust off its offerings and make sure they are exactly what PMI intermediaries are looking for, because in a few months' time it will no longer be the sole provider of PMI quotes.
This follows the revelation that The Exchange will add on a PMI quotation system to its portal before the third quarter this year.
Tucker says the move comes in an effort to round up the portal's offerings, and adds that they have already been in talks with several of the major medical insurance providers in the UK.
And while refusing to comment on whether BUPA has signed up or not, something which would give the portal a clear advantage over MediQuote, he says: "You need the bigger players there so you can support the small players as well." The Exchange is currently the only other portal to be launching itself into the PMI sector, however, others also seem to be considering the option, and Wynne-Jones admits that Assureweb is "certainly looking at it." Obstacles There is no denying that the launch of portals has made life a lot easier for IFAs.
Not only in terms of time saving but also in terms of removing the amount of administration work that is needed in order to register with individual provider extranets.
Unfortunately though, there are still a few areas where they have not quite managed to succeed.
Portals are, in general, fantastic when it comes to straightforward and simple products such as term assurance or CI cover.
However, as soon as an adviser wishes to look at more complex policies, problems arise.
As Linda Tyson, policy adviser at LifeSearch, explains: "While it is relatively easy to compare life and critical illness prices on portals, it can be more difficult to compare the price of more complex products such as income protection, on portals alone.
"Portals are good at comparing single contracts but when it comes to a combination of benefits, these quotes need to be obtained from the life office," she adds.
Portals also lack the ability to compare menu products and 'mix and match' quotes.
Wynne-Jones believes this is because that area is just too complex.
"You could end up getting yourself into a situation where you no longer compare apples to apples." Agreeing with him, Tucker even believes this issue is so problematic that, "whoever cracks it deserves a knighthood." Another thing to keep in mind is that while the portals describe themselves as being impartial, the way they charge providers for putting their information on their sites suggests it could be disputable.
The price intermediaries pay for accessing the portals is fairly transparent, with The Exchange and Webline charging £14 and £10 per month respectively and Assureweb being free of charge.
The amount portals charge the different providers, however, is slightly hidden in the dark.
One way they receive some of their revenue is by charging per successful quote.
The more quotes a life office make, the more money for the portal.
This could imply that portals are less interested in encouraging smaller insurers to join than bigger ones.
This would effectively lead to a situation where intermediaries using the sites won't be able to obtain quotes for all the products in the market.
With this in mind, advisers should not rely too much on the information obtained from portals.
"A portal is fine as a starting point, but with pretty much every case you should look somewhere else as well," suggests Peter Chadborn, financial adviser at Chadborn Baker & Kearle.
He adds: "If you just go on price alone you don't give any value to your clients, and you would fall into the same bracket as supermarkets." That said, portals are still extremely useful tools and to survive as an adviser it would be the natural evolutionary thing to use a portal.
However, to remain an adviser in a true sense, they also need to compliment the data gained from portals with information received elsewhere.
COVER notes
• There are three main portals for protection intermediaries; Exweb, Webline and Assureweb °¥ There is currently only one PMI portal in the market, which is MediQuote.
• They all offer quotation services and links to research companies.
