The insurance industry as a whole has traditionally been a paper based industry, vast amounts of information are communicated between the parties involved using this cumbersome method. Often this results in duplication of effort and there is of course increased opportunity for error.

For this reason, there is much that can be achieved by the introduction of IT into the industry at the point of sale, but it is only recently that the industry has embarked on the required technological revolution.

Ten years ago Direct Line used computer system and up-to-date call-centre technology to revolutionise insurance sales. By using technology which was already available they launched 'hassle-free' motor and then household insurance. Savings made by going direct to the customer, and by careful underwriting, have been passed on to the customer. This competitive pricing and high profile advertising have resulted in these insurers becoming household names. Needless to say, this successful format has been quickly imitated with specialist direct insurers being joined in the market rapidly by most of the large personal lines insurers and some new names to the industry such as Virgin, who are using their high profile and name awareness to reach, they hope, a new market for savings, investment, health and life products.

Call-centre technology is now sophisticated enough to enable the operator to be provided with the policy information relevant to the caller identified by the telephone number from which the call has been made. The same operators can be used to answer calls from a number of sources. For example a company may have sold a product via a number of routes, perhaps affinity groups, which have branded the products their own. By identifying the number called, the operator can answer 'XYZ pol' rather than 'ABC pol' although the same people are answering all the calls and are employed and trained by the insurer and not the retailer.

Brokers need to fight back against the impact the direct writers have had on the market and they too have an armoury of technological aids with which to do this. On top of those technological advancements which have enhanced all office environments, such as electronic mail and advanced databases, the intermediary now has sophisticated quotation and administration systems, electronic data interchange and the revolutionary Polaris solution.

These products provide the intermediary with the advantages of the direct writers along with advice and experience. Electronic data interchange (EDI) enables an immediacy not available previously. Quotations can be produced instantaneously without inputting basic information such as name and address more than once, if then having made the choice the customer wishes to go on risk immediately, he can do so, by inputting any further information required and having it validated immediately. If required a cover note can then be produced and the risk may be accepted there and then. This has impacted on the motor insurance industry already and household and commercial products are ready for launch.

EDI has accelerated the system which could often be frustrating when having made a choice and filled in a proposal, a customer found his risk was not acceptable to a company and the process needed to be started all over again.

Polaris is a company sponsored by six major insurers who recognised that within the industry there was a considerable wastage of resources and duplication of effort which is completely unnecessary. The result was the development of market standards for insurance processing and information, delivered through the 'Productwriter' toolset. This enables insurers to send out one update to all participating software houses rather than different ones to each. As there is a standard tool set, there is a reduced requirement for checks to be made to each update, thus amendments can be promulgated quickly and efficiently and the savings made as a result of this could provide brokers with competitive products to compete with the direct writers. The personal lines system is now beginning to have an effect and it is hoped that the commercial lines system will soon follow.

There has been a very limited exploration of the possibilities offered by the technology kiosks by insurers, although there has been some limited usage. These would provide a link either via the Internet or a networked computer. Some are manned by experienced staff to assist customers, whilst others provide the public with access to quotes at hours at which most brokers offices are closed, again this can compete with the availability of the direct writers. The other benefit of technology kiosks offering Internet access is that it makes available the technology to those who do not have the facility in their own home.

The Internet is now being used to a limited extent as a retail outlet. Websites are appearing from major insurers and brokers. The sites vary in content and format and are designed to fulfil a number of different functions. This may be a simple online brochure which merely provides information about products or the company or generic information on line. Other sites enable users to request quotes. In their simplest forms, these may request information which is to be typed directly on screen onto a form or to supply information in an e-mail which can then be used to produced a quote to be posted to the Internet user. The more sophisticated systems produce quotes on line to be followed up by e-mail or telephone contact.

In addition, some sites really use the facilities offered by the Internet , moving pictures, attractive pages and opportunities for interaction. Direct Line and Norwich Union have exploited the possibilities providing attractive and offering sophisticated friendly sites.

Many companies also offer novelty pages with games, competitions and children's activities. Commercial Union give information about London's Burning (the television programme they sponsor along with the CU round the world challenge yacht race). Sun Alliance give information about EastEnders and fire marks, whilst Legal & General have a section devoted to the weather.

The changing face of the insurance client will also impact upon the market. The public are now moving away from visiting their broker for all their insurance needs. Customers are now becoming cost conscious especially in certain areas of insurance, for example, motor insurance. This was the first area in which the direct writers concentrated and it is the first in which the intermediary market is concentrating its efforts in order to compete.

Exclusive consumer research undertaken by MAPS highlights a lack of familiarity with electronic selling of insurance although, those products already successfully sold by telephone, proved slightly more popular. There are a number of factors which might contribute to this, the newness of the medium for selling and the cost and availability of appropriate equipment. People do not think about buying insurance in the same way as they might about buying a television or a holiday. The expense of the product bought means that many people who are unsure would prefer to buy from a broker or other advisor where there is a face to face relationship established for the sale.