Technology, commoditised insurance products and threats to one-on-one business relationships provided a thread of concern at a Melbourne breakfast seminar examining the state of the insurance market.

The breakfast, hosted by the Australian and New Zealand Institute of Insurance and Finance, also heard that the commercial market, while still soft, has bottomed.

But forecasts varied on where it is headed this year.

Geoffrey Ferguson, GM Placement Services Southern Region at major broker Marsh, says competition, fuelled by growth initiatives, should keep premium revenues flat.

He says that apart from moves by insurers into different market segments and new ventures, the quest for growth may see a rise in merger and acquisition activity.

Darren Maher, GM Corporate at CGU Insurance, says “current news” suggests the commercial cycle has bottomed, although it’s still soft.

“There is an expectation in the industry that prices will start to increase in 2010,” he said.

Both speakers expressed personal concern over rapidly changing relationship models with clients and the way the insurance industry does business.

Mr Ferguson says “beer coaster business transactions” have been consigned to history, but he is personally concerned about the commoditising – and dehumanising – potential of trading platforms and other technologically driven changes to business processes.

“For me, the insurance industry has always been a personal business,” he said. “The best things are always done person-to-person, broker to client, or broker to client or insurer.”

Mr Maher says the industry is starting to see a merger between e-commerce solutions for personal lines and SME portfolios and more traditional hands-on portfolios such as industrial special risks, professional indemnity and liability.

“As more premiums are transacted by e-commerce the SME segment will become increasingly commoditised as switching costs become much lower,” he said.

“The challenge for both brokers and insurers is how we differentiate our products and service offering so we can deliver real, tangible benefits to our customers.”