Comparator models for commercial lines pose a risk to the intrinsic value brokers give clients, according to QBE GM Australian Intermediaries Shaun Standfield.

He says the emergence of such sites threatens brokers if they fail to respond in a considered fashion, but brokers can influence how the technology is introduced.

Comparators drive down profitability and can make clients believe price is the only factor in choosing cover, Mr Standfield told an insurance brokers’ conference in Singapore.

“I question [their] application to commercial classes of insurance, where understanding commercial clients’ specific needs is crucial,” he said.

Urging brokers to recognise the benefits of using the models, Mr Standfield says they can receive multiple quotes from a single data entry, leading to time and productivity gains, and comparators can work well if wordings are the same across participating insurers.

Underwriters can save costs, use the technology across differing distribution networks and may cut commissions.

However, brokers’ incomes may fall as price becomes the only issue, and comparators may harm brokers’ ability to differentiate their businesses.

“The value of advice and awareness of post-claim assistance may be lost if we educate the next generation of insurance-buyers that it’s all about the price,” Mr Standfield said.

Underwriters’ profits may also come under pressure. And if business is automatically remarketed each year, customer loyalty will diminish and retention rates may fall.

Mr Standfield says brokers using the sites should ensure there are a limited number of underwriters on each product panel, with agreed contract terms of use for all of them, which will protect how and where the sites are rolled out.

“You need to know how renewals are marketed each year,” he said.

Brokers should also consider how a site will cut costs and improve profitability.