Brokers have been warned that increasing automation in commercial insurance and the introduction of innovations like comparative quoting could lead to lower commissions and greater opportunities for direct insurers.

QBE GM Australian Intermediaries Shaun Standfield says brokers need to make decisions about automation of commercial insurance business with their “eyes open to the possible ramifications… and how they may evolve”.

He told the Insight Insurance Brokers Association conference in Hobart that the global trend towards insurance automation gives the Australian industry “the ability to assess the impact of this change in countries where technological advancement is ahead of ours”.

In an obvious reference to the development by broker cluster group Steadfast of its in-house online placement platform, Mr Standfield says insurers are concerned about the development of “multiple technologies”.

“We would like to see industry standards agreed first before embarking on differing variations of placement systems,” he said.

“I believe any advances in automation must work to eradicate activities that don’t add value and not replace the advice component that [brokers] offer clients.”

He says alternative forms of distribution and greater competition in sales will evolve, while automated distribution and standard policy wordings could lead to brokers’ advice being devalued.

“Price over time may become the key focus [for customers] and hence the relationships that we have all worked hard to maintain will become secondary,” he said. “Clients may migrate to direct insurers if we succeed in ‘educating’ them about price.

“With price being the pre-eminent determinant… it is logical commissions would decrease over time.”