Distribution

Back in the prehistoric 1990s, The Hartford Financial Services Group applied technology the old-fashioned way. It used a vertically oriented approach to solve problems in discreet business silos.Today, the $15-billion investment and insurance company is taking an enterprisewide viewpoint when it applies information technology. This new approach ties together disparate information technology offerings, simplifies some of the complexity of e-business and makes it easier for distributors to sell and service The Hartford's insurance products.

Over the past year, The Hartford Financial Services Group has launched several technology initiatives aimed at making life easier for distributors. Those efforts will continue this year as new features and functionality are added to The Hartford's eService and eSales programs.Last year, the company introduced the industry's first premium audit search tool available to agents through the Internet. This online tool augments the company's policy, billing and claims service capabilities available to agents through its Electronic Business Center (EBC), a secure Web extranet built exclusively for independent agents that represent The Hartford. Using this tool, agents can use the Internet to quickly determine the outcome of a commercial customer's audit and the reasons for any premium adjustment.

The insurance industry has made great strides in recent years in transacting insurance electronically. Yet there is no doubt that the barriers that still exist, whether real or perceived, must be toppled to allow insurers to join other industries in the pursuit of technological advances that provide greater choices and better service.State insurance regulators have taken the lead in addressing the barriers to electronic transactions. In the last few years, clarifications regarding electronic transactions were reviewed and guidelines issued with the release of a model bulletin by the National Association of Insurance Commissioners (NAIC). The NAIC model stated that electronic transactions should be treated no differently than paper transactions.

Annuities have been a mainstay product in banks since the 1980s, and over time, many providers have tried to push into the crowded channel. Has it gotten too crowded?Given the litany of failed bank-channel programs-Sage Life and Massachusetts Mutual Life come to mind-that litter the annuity battlefield, the answer looks like yes.

When insurance carriers talk about an insurance-sellingprogram designed around "bricks and clicks," it usually implies that services are offered both offline and online.While this remains the primary application, Baltimore-based Zurich North America Small Business has taken the concept in a different direction. Through development of its Buildersrisk.com Web site, the global insurance giant provides "clicks" that literally insure "bricks."

Unlike many other insurance contracts, annuities are marked by significant fluidity where accounts change daily, weekly and monthly. When an accountholder makes a change, the service provider must be prepared to hold up their end of the bargain.This isn't always easy. A report commissioned by Edison, N.J.-based NaviSys Inc. states that "many potential customers fear the loss of control of their money as an immediate annuity essentially locks up those assets for the rest of their lives."

Industry analysts predict that small-business owners will spend more than $40 billion on commercial insurance this year-as much as one-third of the total commercial insurance market. Most of this lucrative business is going to a few captive carriers, leaving independent agents and their carriers to divvy up the rest.Yet, consumer studies indicate that small-business customers want a broad choice of products from multiple carriers-something they can't get from a captive agent. What's preventing the independent agency system from snatching such a blatant opportunity?

The life insurance industry recognizes the Internet will be a valuable tool to help it compete in the future. But there is still a long road to travel before life carriers can become true e-businesses.That's the conclusion of a recent study conducted by the American Council of Life Insurers, Washington, D.C. The study, "Life Insurance and Electronic Commerce: Present and Future," examines several key issues related to the Internet, such as electronic signatures and cyber security. The focus was primarily on insurer-to-consumer initiatives.

As the property/casualty industry continues to get hammered by financial losses stemming from rising claims costs and deteriorating margins, Allstate Corp. is realizing that the best growth opportunity lies in the financial services arm, whose main products are life insurance and investment products."The financial industry is growing faster as an industry, so there's more of an opportunity to grow that slice of the business," says Edward M. Liddy, chairman and chief executive officer of the Northbrook, Ill.-based company.

The Web-based design of Kemper's Compete integrated marketing program enables agents to use it from any computer. Once at the site, an agent can choose the prospecting or customer contact campaigns that support their sales objectives, including retention of their most profitable customers.A Kemper agent accesses the Compete program through the Kemper's Auto and Home's agent portal, at www.IFGwork source.com. The agent then views the profiles of the agency's customers on the screen.