Customer experience

Most Americans will never forget where they were when they first heard news of the September 11th terrorist attack. For 62 Allstate claim handlers, they will remember they were attending training workshops at the carrier's

Unlike other types of insurance claims, individuals who file a homeowners claim know that cash reimbursement is imminent. Even the promise of a claim payment within 48 hours isn't swift enough to satisfy an individual who has been forced from their home.

When one of its Web or application servers crashes, executives at Fireman's Fund Insurance Co. may have to cope with business down-time, but they can at least eliminate one major headache-they won't have to repair it.That's because the Novato, Calif.-based property/casualty insurer inked an agreement in October that some consider a watershed event-an outsourcing pact involving an internally operated information technology division.

The insurance industry received repeated criticism for failing to develop e-business capabilities quickly enough during the dot-com frenzy. Now, it appears that insurance companies are catching up with competitors in other sectors of the financial services industry.That's a conclusion of a recent survey of 150 North American financial services organizations conducted by Chicago-based research and consulting firm Andersen (formerly Arthur Andersen).

It's been a tumultuous year for Safeco Corp. In January, former CNA executive Mike McGavick was named Safeco's new president and CEO. In July, Michael LaRocco was appointed president and chief operating officer of the insurer's $2.6 billion personal insurance business. And in September, Yom Senegor, from Accenture, was named CIO.

Insurers such as Seattle-based Safeco Corp. and The Hartford Financial Services Group, Hartford, Conn., are providing Web-based tools for agents to target key prospects (see pg. 28). Many insurers are also using the Internet for target marketing by building portals for specific affinity groups.For example, The Prudential Company of America launched www.prufn.com for the affluent community; Farmers Insurance Group launched teachers.farmers.com; and Metropolitan Life Insurance Co. has a Web site for parents of children with special needs.

In its most basic form, Webster's dictionary defines "customer" as "one who buys goods and services." In many businesses across Corporate America, this definition-however vague-serves as a roadmap to a more holistic internally developed interpretation.

Over the past four years, independent surveys that measure and project online insurance trends have delivered what's become a recurring diagnosis: When it comes to the functionality of their Web sites, carriers remain a step behind banks and brokerages.And while two new reports conclude that carriers have made strides in narrowing the Internet gap, the reports also highlight the industry's continued e-business shortcomings.

Life and health insurers to date have been slow to sell policies online. But within the next four years, carriers will sell $12.8 billion in life and health products on the Internet-up from $1.1 billion last year.That's the conclusion of a forecast released by IDC, a Framingham, Mass.-based technology research firm. The growth in online life and health insurance sales will be spurred by several factors, according to IDC.

Although insurers are just now wading into the Web-based small business insurance market, research indicates this approach has great potential to improve carriers' revenue streams.There are an estimated 5.7 million small businesses in the U.S. with annual revenues between $50,000 and $500,000, says Matthew Josefowicz, an analyst with New York-based Celent Communications. He is the author of a recent report, titled "Web-Enabling Small Business Insurance Policy Origination."