Distribution

It's always been assumed that an insurance agency can find a way to provide adequate service to its existing customer policyholders while at the same time optimize its new-business opportunities.But most realize that it rarely works that way. Internal operational inefficiencies, marked by a paper-intensive communications process and antiquated data-exchange platforms, often undermines an agency's agility in generating new business.

Success in designing Web self-service capabilities does not subscribe to a "build it they will come" philosophy. The business sponsoring the Web site must first conduct diligent research to determine the specific blueprint of what Web features will be regularly accessed.BlueCross BlueShield of South Carolina was one of the first health providers in the nation to offer its members, doctors, hospitals and other health care professionals a large array of self-service transactional capabilities with real-time access to mission-critical information.

Chris Mower didn't want to spend a lot of time-or money-building a Web portal for independent agents. But those restrictions didn't prevent him and Royal & Sun Alliance's Professional & Financial Risks Division from developing a comprehensive offering that is designed to develop new revenue streams, improve productivity by eliminating manual processes and help small-business clients understand management liability exposures."The business model, which we validated with customer feedback, was to create a way to distribute products through new channels without creating channel conflict," says Mower, manager of e-business solutions for Royal & Sun Alliance's ProFin division based in St. Louis. "It was about re-inventing existing processes and taking advantage of new technologies."

In today's highly competitive environment, financial services are largely a commodity, with institutions distinguished as much by service and price as by products and product features.Web self-service can significantly improve service quality. By automating much routine service, Web self-service enables users to quickly and easily resolve most of their service needs around-the-clock More importantly, because users aren't placed in a call queue for an available agent, Web self-service is often more responsive than contact centers.

Carriers and agents have invested a significant amount of capital toward electronic interface initiatives that enable the two parties to improve their data-exchange efficiencies and overall operational competencies.But as they carry this out, consumers have been neglected, to the extent that many "lack faith in the quality of online customer service," says Madelyn Flannagan, vice president of education and research for Alexandria, Va.-based Independent Insurance Agents of America (IIAA).

In the late 1990s and into 2000, several carriers and third-party providers began to recognize online calculator tools as invaluable in helping consumers perform needs analysis for life insurance."We have come to believe that few consumers have the patience or the understanding to spend a lot of time filling in forms to get the information they need," says Terry Burt, president of Canton, Mich.-based Interlinx LLC. Interlinx operates a Web site, www.budgetlife.com, that provides dynamic marketing and pricing data on a stable of life insurance products from more than 150 carriers.

Layton Christensen's best-selling book, "The Innovator's Dilemma," discusses how business leaders at large companies have usually underestimated the long-term impact of disruptive technologies. This trait certainly applies to insurance and the Internet.Insurers' unsuccessful efforts of using the Internet as a lead-referral channel in the late 1990s have soured senior executives' current perception of the Internet. However, recent successes by companies, such as John Hancock's strategy to sell term life insurance online and innovations by some property/casualty carriers in claims processing, is beginning to turn the tide. By 2005, maturing Web services technologies and data intermediaries will become key business drivers for carriers.

When Philip Swift responded to a classified ad for Fireman's Fund Insurance Co., little did he know how that decision would change his life.Swift, living at the time in Liverpool, England, accepted the offer to work for the Novato, Calif.-based carrier, but in the back of his mind he believed his stay in the United States would be short.

More than nine months after it was created, Wilmington, Del.-based Fusura Inc., a Web-based personal lines insurance agency formed by global insurance giants AIG, Kemper and Prudential, is finally preparing to go live.As it prepares to launch-expected to be no later than March 31-the consortium capitalizing the venture can't be accused of rolling out the program too hastily. Since its celebrated formation was revealed, Fusura has witnessed its share of tweaks and modifications-from putting a permanent executive team in place to choosing its technology platform.

Millions of potential buyers are using the Web to shop for insurance.That's why carriers are reassessing how to use the Internet to build their brand.