Distribution

Until recently, insurance companies have developed many Web sites for various products and business units, with little attention paid to consistency in branding, according to Kimberly Harris, senior research analyst at Gartner Financial Services, a unit of Gartner Inc., a Stamford, Conn.-based research and consulting firm."But insurers are beginning to realize they need to focus on an enterprise brand and roll that down to the different channels," she says.

Imagine how difficult it must be for an independent agent to locate a carrier that covers beekeepers or acupuncturists. Or, from a carrier's perspective, finding agents who will sell employee dishonesty or bailee coverages.MarketScout, a Dallas-based venture that was launched in June 2000, is using the Internet to help retail insurance agents get quotes and bind polices for more than 700 classes of business, primarily specialty insurance. Since it's inception, the company has registered more than 13,000 agents who have free access to information and quotes provided by 67 carriers, including such heavyweights as American International Group Inc. (AIG), Travelers Insurance The St. Paul Cos., Safeco, Cigna and Fireman's Fund.

As world of insurance grows more complex due to competition from within the industry and from banks and other financial services providers, Allied Insurance has a simple business strategy: attract and retain quality independent agents."Agents are our primary focus. Everything we do is aimed at how we can help the independent agent do business better," says Nate Beyene, IT officer for e-commerce at the Des Moines, Iowa-based carrier. "If our automation is not good, our agents can go next door."

Insurers can't understand the benefits of wireless technologies unless they experiment with it, as Progressive Insurance has done for the past year. At the same time, the lack of industry standards, coupled with current limits on how much data can be transmitted and received by mobile devices, limits the types of services that wireless devices can support."This is a technology that consumers are dying to use, except for claims and servicing," says Jamie Bisker, a senior insurance analyst with TowerGroup, Needham, Mass., and author of the recent report "Wireless Realities In Insurance."

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).

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.

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."

Many Web experts frown upon screen-scraping technology because, in Internet time, screen-scraping is a slow, cumbersome process. But Anne Castro, chief design architect at Blue Cross Blue Shield of South Carolina, doesn't buy into that argument.The service her company is providing on the Internet is not "a moment-in-time service," she says. "It's a file cabinet of all the business people have with us."