At long last, the ability to see inside the “black box” of commercial insurance purchasing has arrived! Like almost everything else, commercial insurance purchasing is going live online. Buyers are seeing the benefits of using technology to improve the cost and coverage terms for their companies.
Sourcing technologies are enabling CFOs and other stakeholders to go to their ipad or mobile device and view the auctioning of their commercial insurance. The benefits just keep piling up because they get all this visibility without compromising coverage, service, or any other aspect of the transaction that is critical to the decision making process.
Imagine a live insurance trading platform. It is already in existence and is actively being built out with all the special needs of commercial insurance brokering. Insurance buyers are now bidding their insurance providers live online using proven auction technology and producing outstanding savings.
Why are the results so outstanding? In the insurance business, the old fashioned RFP is disliked by all because bidders have no visibility to the bidding process or results so they have no assurance that their bids are being fairly measured against their competition. Similarly they have no benchmark by which to gage what adjustments they need to make, either to coverage or pricing in order to become more competitive.
Qualified brokers and underwriters enjoy the opportunity to compete on a level playing field where they can pitch their capabilities in a fair and transparent process. Online auctions bring them a fair shot at securing or retaining business. You also cannot discount the increased energy level that online bidding brings to the sourcing project. Depending on how the auction is set up, bidders can see that they are being outbid by relatively small percentages and respond to the pressure by submitting better pricing. You only need to watch the back-and-forth downward price pressure of an online insurance auction one time and you’ll be convinced of its benefits.
The technology and processes are available today. The transparency and efficiencies this brings will benefit all parties to the process over time.
Online auctions are a major advancement in strategic procurement for buyers of commercial insurance.