In the beginning, Corporate America created a concept known as full-service, and it was good. The epitome of full-service is gasoline marketing, where a service station attendant rolled out the red carpet to customers, who could expect to have their tank filled, windshield cleaned, oil and tires checked and the transaction processed-all without unbuckling their seat belts.

Full-service treatment represented the pinnacle of all things service-oriented. That is until a concept known as self-service was created. Full-service may have been good for both consumers and businesses, but in the end self-service is even better.

In essence, time-pressed consumers agreed to assume a portion of the service responsibility in return for not only economic savings, but also a greater level of autonomy.

And while gasoline marketers have become proficient self-service providers, insurance carriers are still trying to apply these concepts and capabilities to their own policyholder and agent/broker customers. Many carriers agree that the Internet possesses the power to enhance the overall customer experience and reduce their operational costs.

"As carriers focus on easier return-on-investment targets, Web self-service is a prime target," says Matthew Josefowicz, senior analyst, Boston-based Celent Communications Inc. "If a policyholder makes a call to resolve a billing question, the service cost can range from $15 to $25. But, if the customer can go to the Web and get the answer, the cost to the carrier is about $1."

Adoption Through Adaption

Web self-service is about both accommodation and relief-the former benefiting the customer and the latter the service provider.

BlueCross BlueShield of South Carolina can fully relate to the "faster, easier and cheaper" philosophy of Web self-service. In late 1999, the Columbia, S.C.-based health services provider rolled out to provide a greater abundance of self-service capabilities.

Today, 96% of the inquiries to the "My Insurance Manager" feature on the Web site are completed without a customer needing to engage "live" support. "Our mission is to give customers what they want, when they want it," says Terry Povey, director of Web business development, market research and statistics, BCBS of South Carolina. "Physician organizations in particular have been able to save significantly in the time they spend on the phone checking claim status and eligibility."

Although Web self-service advantages are unequivocally strong, industry observers say that delivering on overall execution has somehow fallen through the cracks. "In the insurance industry, Web self-service functionality is spotty," say Richard Bell, senior analyst for Newton, Mass.-based Meridien Research Inc. (See "The Last Word, page XX). "Sometimes it's a case of technology infrastructure not yet being developed, and in other instances the technology has been developed, but the adoption rate by customers is low."

If it's a technology issue, independent-minded customers who log onto the Web discover that even the most rudimentary task is a major challenge. "Access to account information for a customer is a tedious process," says Greg Davies, senior analyst, financial services for Waltham, Mass.-based Gomez Advisors Inc. "Some carriers force policyholders to jump through many hoops before they can access personal information. It can often take a week to obtain time-sensitive information. This defeats the entire purpose of the Web visit."

Breaking Down Barriers

Although most consumers expect first-rate customer service, many carriers have shown a propensity to allocate the lion's share of their Web self-service budgets to another customer base-producers.

Given the intense competition to recruit independent agents intense, carriers are investing in technologies they hope will attract and retain good producers. "Agent extranet platforms are an excellent way to recruit new agents," Josefowicz explains. "By logging onto an extranet, an agent can track commissions, track a policyholder's claim and by doing it electronically they can reduce printing costs."

Portal/server software that is insurance-specific is becoming a valuable resource for carriers, says Andrew Jackson, chief marketing officer for Toronto-based InSystems Inc. "For a few years, carriers explored horizontal portals that they would retrofit to make insurance specific. Some opted to implement CRM software and leverage it as a service platform, but CRM software isn't designed to foster self-service capabilities."

However, many agents are not convinced the Internet is their ally. "Skeptical agents view the Web as an opportunity for a carriers to do an end-run and sell directly to the consumer," says Gordon Sanders, an executive with S1 Corp., an Atlanta-based provider of enterprise software to banks, credit unions and insurance providers.

Conversely, carriers feel undermined by independent agents who use the advantages of Web self-service to integrate with multiple carriers. "Carriers that offer independent agents a nonproprietary platform to conduct business are in essence making it easier for agents to do business with that carrier's competitors," says Edward Cecere, research analyst for Needham, Mass.-based TowerGroup, says. "This is true with SEMCI-related (single entry, multiple company interface) programs. But in an effort to retain good agents, carriers realize they must offer several platform alternatives-both proprietary and nonproprietary."

Good Relations

An increasing number of trail-blazing carriers can live with these ramifications because they're confident that their product line is strong enough to sustain itself.

For example, Travelers Property & Casualty Co. has built a bridge connecting its internal operations with its agents, leveraging it as an operational asset intended to unify, not divide.

In January, Hartford, Conn.-based Travelers launched a Web portal designed for commercial and personal agents in conjunction with its Issue Express Net quote, rate and bind program. "The touch points that were once paper-intensive are now found online, including rate manuals, forms, reference libraries and customized brochures," says Patrick Gee, vice president operations, personal and small commercials lines for Travelers. "Agents can leverage the portal to extract any type of data request. They can log in using one password, be it personal, commercial or bond business, and obtain access to all account data within one seamless and integrated system."

Seattle-based SAFECO Corp. also has developed Web self-service programs that are designed with an interface for both agents and consumers. In 1999, the carrier rolled out the Virtual Producer, a branded Web-based program that so far has been adopted by more than 1,000 independent SAFECO agents. It is also available to consumers who log on to

"Our agents had felt increasingly threatened that the Web would translate to direct sales," says Anne Randall, vice president, personal insurance and director of automation. "Virtual producer blends the point-of-sale dynamics of Web selling in such a way that an agent is fully engaged in the process."

One key characteristic of Virtual Producer is that SAFECO only enlists agents who understand the Web's role in serving customers. If an agent lacks a dynamic Web site, SAFECO will design one so the agent can participate in the program, Randall says.

When consumers log on to Virtual Producer, they can view a list of participating agents and then select one based on their ZIP code. In fact, that's a second key to the program: No policy can be written without the involvement of a SAFECO agent, which eliminates any shadow of a doubt that an agent may have about the prospect of direct sales. If a consumer opts not to choose an agent, Virtual Producer will designate one to that individual.

When policy inquiries are fed to an agent, they activate an extranet program called SAFECO Plaza, which performs the heavy lifting to issue the policy, including access to rate manuals as well as a library of data and forms.

The black hole

Ultimately, the efficiencies built within Virtual Producer enable new business to be written swiftly. This is a significant development for frustrated consumers who often log on to a Web site and receive little satisfaction while shopping for coverage.

For example, the "agent locator" feature found on some carrier Web sites is a microcosm of the glaring limitations of Web self-service. When an individual logs on to a carrier site with the expressed intention of finding an agent, they are often lost in a black hole of inefficiency.

"There are agents who aren't even aware that a carrier they do business with offers an agent locator feature," explains Madelyn Flannagan, vice president of education and research for Alexandria, Va.-based Independent Insurance Agents of America (IIAA). "But even if they were aware, the distribution of leads is very inefficient. An agency with two people might get 50 leads while a large agency might receive two."

SAFECO's Virtual Producer was built to distribute leads quickly and intuitively. All participating agent signed up for Virtual Producer because they understand the needs of the Internet shopper. They have a keen awareness of and appreciation for individuals who look for insurance around the clock. As a result, response time to an inquiry is instantaneous.

"Before Virtual Producer, leads were not followed up upon in a timely fashion. Now, an agent e-mails an applicant within an hour," Randall explains. "There was a lot of redundant re-keying of data between the carrier and the agent regarding the application, but Virtual Producer eliminates this redundancy."

Offline Support

Taking into account the post dot-com operating environment and the less lofty online insurance sales projections that are now anticipated, many carriers will continue to take a wait-and-see mentality on customer self-service on the Web, predicts TowerGroup's Cecere.

But carriers can't afford to wait too long. That's because producers are becoming increasingly Web savvy and consumers are accustomed to using the Web as part of their daily routine.

One particular concern that must be addressed is as Web service escalates, carriers must make certain that data collected online can be integrated across their back-office systems.

A consumer might conduct a percentage of their tasks online and then follow up with a phone call, a fax or even a face-to-face visit. Making self-service programs work across an enterprise hinges on seamless consistency through a carrier operation.

"The Web is not the Holy Grail. You need an offline support mechanism in place to complement it," says S1's Sanders. "There has to be a consistency that flows through the process between a CSR, an agent and a policyholder. A system must be in place where if a customer performs a task on the Web one day that when they follow up with a phone call to an agent or CSR the next day, that the data was captured across the enterprise."

Sanders predicts that Web self-service programs will also be predicated on a carrier's ability to know the identities of its individual policyholders through CRM efficiencies.

"They'll have to calculate the value of their customers and the buying power of these customer," Sanders says. "If an individual has 13 policies with my company, I ought to know how important that individual is to me. And the provider should understand my tendencies: Is this individual a price-shopper or does this customer roll over an investment product every six months? Knowing this can help unlock some of the uncertainties behind Web self-service."

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