Think Tank: Debate points at a gradual transition from paper-based business
Insurers and intermediaries are no closer to fully embracing online business in the immediate future, according to the latest COVER Think Tank.
Debating the recent progress in online protection business, guests argued that it is unlikely the industry will abandon paper-based business entirely, with some guests suggesting the transition is further away than some may think.
"Maybe in a long, long time things will change, but certainly not now," said Diane Whicher, director for Whichers IFA.
Whicher argued the industry would not experience a complete move towards e-business because conducting transactions online makes it impossible for advisers to build a proper relationship with clients.
"Normally you have to build a rapport with your client and you cannot build that rapport when you are working on a machine - you need to be talking to them and noting things down," she said.
Providers agreed. Sue Wilkinson, head of life and health propositions at Abbey for Intermediaries, admitted there are many hurdles to overcome before the industry operates a paperless service. "Until we are that far advanced in the future where everything is stored in a microchip, I think there will always be a need for paper," she said.
However, Wilkinson did not dismiss the idea that the industry may one day solely conduct web-based business. "I would not like to say longer term what may happen, but it depends on what time scale we are talking about. How far into the future do you want to look?" she questioned.
Also taking part in the debate, Richard Verdin, sales and marketing director at Direct Life & Pension Services, argued that a recent Ombudsman case proved that the industry is not ready to be wholly web enabled.
Outlining a recent Ombudsman ruling, Verdin quoted a case where a customer bought life assurance through a bancassurer, which resulted in a disputed claim about non-disclosure.
"The Ombudsman ruled in favour of the client and said they should not be expected to understand the implications of what they are getting themselves into.
"The Ombudsman has just set back the whole industry with that judgement," he said. Commenting on the current evolution from paper-based new business to online services, Verdin said he could not see any winners. "I think the way it is currently employed means it is likely to involve more losses for the customer, the adviser, the insurer and the reinsurer," he concluded.
