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.

In the mid-1990s when the Internet landed on our desktops, almost every established company-and many new online firms-quickly built their Web sites to grab market share. Now that the dot-com bubble has burst, insurance carriers are among the many companies scrambling to figure out what the Internet really means to their business.

"The early insurance adopters rushed to the Internet to push sales, and it didn't work," says Vincent Oliva, research director in the financial services group of Gartner Inc., a Stamford, Conn.-based research and consulting firm. "They embraced the technology prior to considering its proper place in their business plan."

Although most insurance companies would not be accused of rushing to sell policies online, even the cautious adopters are now seriously considering how the Internet fits into their business plans. One of their strategic concerns is how online technology affects their brand. Carriers with well-established reputations are wondering how to communicate traditional brand values-such as trust, financial strength and reliability-to task-oriented, price-conscious Internet shoppers. In addition, financial services convergence is motivating some insurers to modify their brands to communicate a broader market strategy-both online and off.

Internet branding is not any different from branding in other media, says Michael Hines, vice president of marketing communication at Prudential Insurance Company of America, Newark, N. J. "To me the brand is the distillation of everything that a company is about: its imagery, its products and services, where you do business, who you do business with. It's a whole feeling about a company that becomes the brand," he says.

That's why when Prudential decided to emphasize its move into financial services last May, the company changed its brand name to Prudential Financial. Although the company's logo still features the widely recognized rock of Prudential (actually, the Rock of Gibraltar), the company has added the tag line, "growing and protecting your wealth," to cover both investments and insurance.

"The change was made to communicate that Prudential is now a broad-based financial services firm doing business in many countries," Hines says. The Internet plays a role in Prudential's overall branding efforts, he says, but "branding is more holistic than any one particular media. The Internet is one of the many ways we communicate with the world. It's not the primary way."

Wondering what to do

Like Prudential, many companies are realizing that despite all the excitement about the Internet over the last few years, at least for now, the technology essentially is providing another communication channel.

Yet, because the Internet is a channel that an increasing number of consumers are using for research before they purchase insurance, it can't be ignored.

"Insurance is not one of those commodities that people go out on the Web and shop for every day," says Richard Heneberry, assistant vice president of direct distribution/Internet channel for Allstate Insurance Co., Northbrook, Ill. "But when they're ready and they need it, you absolutely have to be there."

To be sure, insurers realize they must have an Internet presence, but they're struggling to understand how to use it most effectively. "It throws a wrench into the works," says Tim Robinson, managing director of international business at Corporate Branding, a consulting firm in Stamford, Conn. "People were getting really good at television, print, radio and traditional public relations. Then all of a sudden comes this Internet thing, and everyone is wondering 'What do I do?'"

State Farm Mutual Automobile Insurance Co. is one such carrier that is evaluating how the Internet affects its brand strategy. The Bloomington, Ill.-based company has employed outside firms to evaluate its Web site, and it conducts its own surveys and focus groups as well.

With one of the most widely recognized logos in the industry, State Farm continues to build its brand presence on the Internet by advertising on Yahoo!, and America Online-as well as on niche Web sites, such as Asian Avenue, Black Planet, Mayente for Latinos, Discovery Kids, College Club and Zelgo for seniors.

More recently, however, the company is realizing that using its brand logo to build recognition on the Internet is not going to be enough. "We have to convince people, and show them in a very objective and rational manner why we are a good choice," says Robert Reiner, manager of enterprise Internet services at State Farm.

Low-cost providers

Indeed, traditional carriers such as State Farm are competing against low-cost insurance providers, who-so far-have been the most successful in the industry with Internet branding, says Corporate Branding's Robinson.

Companies such as Mayfield Village, Ohio-based Progressive Casualty Insurance Co. and Washington, D.C.-based Government Employees Insurance Co. (GEICO), have successfully built their brands online because they've followed through on their promise, Robinson says. "You're going to get a low price, and it's going to be easy and complete."

Low cost, speed and ease of use are brand messages that resonate with the Internet culture, industry observers say. But for companies such as State Farm, Prudential and Allstate, which have advertised for years that they represent the "Good Neighbor," "The Rock" and "The Good Hands," the challenge is to communicate the value of trust, financial strength and stability on the Internet. And that's a much more difficult task, Robinson says.

Realizing this, State Farm has taken a step toward educating visitors to its Web site by adding a link that reads, "Five Good Reasons to Choose State Farm."

Clicking on the link opens a window listing State Farm's credentials: high customer retention rate, financial stability, discounts, easy access and "more than insurance."

The company will continue to promote its "value proposition," Reiner says. "You'll see a lot more activity around easier ways to file a claim and access windshield repair shops and body shops."

A new mindset

State Farm still uses the "Good Neighbor' tag line on its Web site, but "we need to continually question that policy," Reiner says. "I'm not so sure the younger generation understands what a neighbor is the way you and I do. Maybe 'State Farm is there' is enough."

Insurance customers today are different from post-Depression consumers who needed a lot of reassurance before they invested their money with an insurance company, Corporate Branding's Robinson concurs.

"Today, people say, 'I know I need insurance. I don't want to spend a lot of money. I don't want to spend a lot of time. I don't want people coming to my home,'" he says. "The hard sell of insurance isn't so difficult anymore. It's more about how to make it a less painful transaction, and as cheap as possible."

Allstate has made similar discoveries about online consumer expectations. "Let's face it, Internet shoppers don't come back again and again to a particular site," says Heneberry. "Whether it's Allstate or State Farm, (online consumers) want to do things in a very task-focused, quick and easy manner."

"Building a brand is about continually and consistently managing the customer experience," according to James Gregory, CEO of Corporate Branding, in a report titled, "Digital Branding."

Managing that experience on the Internet entails creating user-friendly navigation and a consistent design, using imagery that represents the company's brand, and providing transactional capabilities, useful content and links to other relevant sites.

Promise of convenience

To build its brand online, Allstate has placed a "get a quote" button at the front and center of its Web site, Heneberry says. The company has also designed a "quick quote" option that provides an estimated rate for auto and homeowners insurance in two to three minutes.

Allstate is trying to live up to the promise of "convenience" by enabling customers to access policy, billing and claims information by logging onto the site with three, secure pieces of information, Heneberry says. The company also is improving navigation on the customer care center by replacing middleware that connects its legacy systems to the Web with custom routing and code.

No one disputes the fact that 21st century consumers want 24-hour service and competitive prices. These concerns consistently rank high in consumer research, such as the branding survey recently conducted by Alexandria, Va.-based Independent Insurance Agents of America (IIAA). In the IIAA study, personal and small-business consumers both indicated that competitive price was their highest priority when buying insurance. Around-the clock service ranked just below price and customized policies (see chart, page 24).

Trusted choice

Also placing high in the IIAA study, however, were attributes suggesting that insurance shoppers are not only interested in speed and price; personal service, choice and trust are important to them too.

For example, 85% of personal consumers and 88% of small-business consumers cited the need for "advocacy in claims disputes" as an important consideration when they buy insurance.

Furthermore, 52% of personal consumers and 46% of small-business consumers still prefer to purchase insurance in person, according to the IIAA study. Only 5% of personal consumers and 26% of those in small business prefer to purchase online.

As a result of its research, IIAA is launching the new "Trusted Choice" brand this year for its members to promote the value of an independent agent in the insurance buying process. Four carriers that sell through independent agents have signed on as founding sponsors: Seattle-based Safeco Corp.; National Grange Mutual/Old Dominion Insurance, of Keene, N.H.; Chicago-based Encompass Insurance; and The Hartford, Hartford, Conn.

The Trusted Choice brand conveys customer advocacy, policy customization, and choice of companies-services that independent agents provide.

IIAA's television and print advertising campaign-which targets personal and small-business consumers, age 35 to 64, with higher education and higher income-directs consumers to, where they'll find agents in their area who have signed on to the program and agreed to adhere to rigorous professional standards.

Some consumers are comfortable with the self-sufficiency the Internet offers, says Jane Larsen, senior vice president of marketing for Encompass Insurance, a brand of The Allstate Corp. that sells only through independent agents. Others, however, don't have the time to research insurance terminology and the ramifications of improper coverage. Some consumers "really do want that relationship with someone who can sort through all the choices and give them the best advice," she says.

The human touch

Prudential emphasizes the role of the trusted advisor. In fact, much of Prudential's business is conducted face-to-face, Hines says. "The Internet is an add-on for Prudential," he says. "It's a way of communicating that supplements a sales force that can sit down with you and help you grow and protect your wealth."

State Farm and Allstate also continue to support the contribution of their agents to their brands, despite lawsuits recently filed by agent associations against both companies (see article, page 8).

"Agents are very important to customers," State Farm's Reiner says. "Even in the virtual sense, customers (need) someone there for them locally that they can depend on."

At Allstate, the human touch is still a component of its multiaccess strategy, along with the Internet and call centers. On Allstate's home page, for example, a prominent button enables visitors to find an agent, and the site features photographs of people on various pages with the tag line, "You're in good hands. Mine."

Despite the current consumer preference for purchasing insurance in person, however, carriers risk alienating Internet consumers if they favor agents over the online channel, warns Kimberly Harris, senior research analyst at Gartner Financial Services, a unit of Gartner Inc.

"If (carriers) want to promote agents, that's fine," she says. "But have other options, and make sure the consumer who goes to your Web site is not given only static information that routes them to an agent-if they don't want to deal with agents."

creating brand loyalty

Losing Internet customers is a risk that State Farm's Reiner hopes to avoid. The company currently sells auto insurance online in California and renters' insurance online in Illinois. "A huge portion of those policies are sold to new customers," he says. "So that tells us we have to be very careful not to discount the Internet as a medium."

The full impact of the Internet will be felt when the next generation of consumers hits the market, Reiner says. "They've internalized this technology. We've got to be able to serve them in the manner in which they choose," he says.

Insurers also have to determine how to create brand loyalty with these new young consumers, Corporate Branding's Robinson says. Traditional brand values such as trust and financial strength may not be priorities to people in a hurry to buy auto insurance, "but the trick is to communicate those values to them in a manner that convinces them to become long-term investors in the insurance business," he says.

"Insurance companies that have been able to offer fast turnaround and low cost have netted very well on the Internet, because they're counting on the mindset of the guy who just wants to buy car insurance," Robinson says. Longer term, however, "I'd place my money on the big boys. They're going to figure this out. It took years for companies to figure out how to make money off television advertising. It's going to take at least that long on the Internet."

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