While the direct sale of commercial insurance through online channels remains limited, using online platforms to link insurance intermediaries and insurers has become commonplace.
“The ability to quote, rate and submit business online is not innovative anymore. Everybody does it,” said Richard Kerr, CEO of Dallas-based electronic insurance exchange MarketScout. “It's cool, but everybody's cool today.”
In addition to lowering transaction costs, digitizing the insurance placement process enables intermediaries to better segment by areas of expertise and identify business partners that can complement their strengths, Mr. Kerr said.
For example, an independent insurance agent asked to find coverage for a chicken farm can easily partner with a managing general agent elsewhere in the country that specializes in such coverage by using an electronic insurance exchange.
“The differentiator today is all about getting the right product in front of the right buyer utilizing electronic distribution, and the way to do that is through segmentation,” Mr. Kerr said.