How can a carrier transform its commodity insurance product to avoid aggressive capacity plays that occur during a soft market cycle? Fireman's Fund Insurance Co. is betting that a new customer-focused strategy and technology platform-called iCustomer Series-is the answer.This summer, Novato, Calif.-based Fireman's Fund, a subsidiary of AllianzAG in Munich, Germany, launched the iCustomer Series to differentiate its middle market commercial insurance offerings from its competitors'.
"With relatively homogeneous products, your ability to compete, your margin, is largely dictated by the marketplace as a whole," says Robert (Bob) Bailey, middle market segment executive at Fireman's Fund.
After the last soft market cycle, Fireman's Fund management decided it wanted to create and retain more intrinsic value for the customer, he says. "And that value would be less dependent on overall market conditions." Instead, the value of Fireman's Fund's commercial insurance now hinges on customized industry-specific Internet communities-called the iCustomer Series.
The series consists of an information-packed CD and an extranet site for each of six different middle market sectors: retail, restaurant, real estate, hotels, manufacturing and wholesale. A CD was also developed for agents.
Customers can use the CD as a standalone source of information, tools and forms-or as the initial launch pad-via a link-into their specific community extranet site, where even more information and tools are available.
Similar to the CDs, each site contains basic-insurance and industry-specific information, including safety tips, lessons learned, claims forms, loss control information and training materials.
But the sites also provide online training and regularly updated information on "hot topics," such as mold; industry news feeds; and a community bulletin board.
Customers can also file and check the status of workers' compensation claims on the site. And, at press time, the company was planning to add online claims filing for its automobile, property and liability lines as well.
Also in the future, customers will be able to access an up-to-date overview of their account activity. Not only will they see real-time claims information, but also an inventory of account activity-including billing, policy issuance, endorsement processing, loss-control, engineering and claims visits.
iCustomer Series was designed based on input from hundreds of producers and thousands of customers-through surveys and focus groups.
"The insurance customer has been locked into this commoditized, gray existence for 350 years," he says. "And when you sit down with them and say, 'Let's talk about insurance in a different way,' they don't even know how to do that. They don't even know what you mean."
Typically, commercial customers think of insurance in terms of coverage, rates and loss control. But in order to differentiate itself, Fireman's Fund began asking customers questions about their businesses: What are your risks? What do you worry about? What do you need to get done? And, how can we help you?
"Once you get customers off this linear path and move them on the exponential path, the conversations get really interesting, really fast," Bailey says.
For instance, customers asked for online access to specific suppliers within their industries, and Fireman's Fund responded.
Currently, all the sites provide discounted services from Evault Inc., an online provider of data back-up and disaster recovery, and interlinkONE Inc., the Internet vendor that built the iCustomer Series platform.
But the carrier also is working to negotiate agreements with approximately 10 industry-specific vendors to provide products and services at a discount on the relevant iCustomer sites.
"I've got clients who are trying to do restorative work and match wood that's 50 to 100 years old," says Richard Langton, wood products insurance program manager at Downey, Calif.-based Bowermaster & Associates Agency.
Langton suggested that Fireman's Fund include a list of suppliers to the woodworking industry on a new co-branded extranet the carrier is building for Bowermaster and the Woodworkers Institute of California.
The iCustomer Series is a continually evolving endeavor, with new Internet communities within the six industry segments already under development.
"The day we launched the iCustomer environment is the day we began to refine it," Baileu says. "The woodworking CD is a perfect example of that. It's a leap from our manufacturing environment to a specific group of customers within that realm."
Not only is the iCustomer Series under continuous improvement, but so is the company. The initiative has forced Fireman's Fund to realign itself more fully around its customers, according to Bailey.
"As we went through this process, it was eye-opening-as an insurance company-to see how much time and energy you spend on your own agendas-not necessarily supporting the communities you serve."
Hundreds of Fireman's Fund employees have been involved with developing and launching the CDs and portals-from providing content, to integrating the claims and billing systems to the sites, to training producers.
"This has become our single-minded focus in the commercial business." It has imposed an immense level of discipline in the organization, he says. "This community of customers has become all-important."
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