Mid-Size Carriers Not Sold On Internet SellingDirect Internet sales are not likely to be an IT priority for mid-size insurers in the next several years, reveals a report by Boston-based Celent Communications Inc. In the report, titled "Technology Market Snapshot: Mid-Size Insurance Companies," mid-size insurers don't tend to rely on direct distribution, of which direct Internet sales is mostly a subset. However, similar to major companies, mid-size insurers are watching direct Internet sellers so they are prepared-in the event direct sales do rise to a higher level, Celent predicts. "For this reason, mid-size insurers who are focused on agent-oriented Web-based distribution enhancements are careful not to close the door, technologically, to the eventual possibility of direct Internet sales," the report states. Celent estimates that mid-size insurers will spend $1.1 billion on new technology projects over the next three to five years, primarily on Web-enabled policy administration systems and agent extranet systems.
NAIC Moves Credit Scoring On Fast Track
The National Association of Insurance Commissioners (NAIC) is reviewing the use of credit scoring by insurers for underwriting and rating purposes, and plans to adopt a model act or regulation by its December 2002 meeting. Over the next several months, the Kansas City, Mo.-based NAIC will review a previously adopted white paper on credit scoring, and may also commission actuarial studies. The studies would examine whether consumers are negatively impacted by the use of credit scoring and if the use of credit scores has a disparate impact on low-income or minority consumers. NAIC plans to release a drafted plan this month (see related article, page XXX).
Yahoo! Names Answer Financial "Best Insurance Site"
The Web site of Encino, Calif.-based Answer Financial Inc. was recently named as the "Best Insurance Site" in Yahoo! Internet Life's site rankings. According to Yahoo!, www.answerfinancial.com is a "painless way" for consumers to get solid information and instantaneous quotes for all types of insurance policies, along with personal service. In addition, Encino, Calif.-based Answer Financial Inc.'s site enhances the information gathering and transactional power of the Web by offering access to highly trained salaried licensed agents in its service center, according to Yahoo! Answer Financial's Web site was also names the "Best All-Around Insurance Site" last fall by Gomez Inc., a Waltham, Mass.-based firm that measures Internet quality.
Prudential Financial Launches Group IVR System
The Group Insurance unit of Newark, N.J.-based Prudential Financial Inc. has launched a Web-based Interactive Voice Response (IVR) technology system that will enable group plan participants to enroll online or by telephone. These services are available anytime throughout a client's initial open enrollment period, and can be used interchangeably. An employee may begin enrollment using a computer and then switch to the telephone without losing any inputted data. The data can then be easily retrieved and the enrollment process continued. The enrollment process is further simplified by an automated application, which retrieves all necessary personal and plan information from an existing database, and presents users with plan specific product offering and coverage limits.
FREEDOM Group Files Trademark Suit
Cedar Rapids, Iowa-based The FREEDOM Group Inc. has filed a lawsuit against Eagle Technology Management Inc., and several of the company's key employees. The employees named in the litigation by The FREEDOM Group, a subsidiary of Brookfield, Wis.-based Fiserv Inc., were formerly employed by FREEDOM, which is a provider of information systems and services tailored for the insurance industry. The complaint, filed in U.S. District Court in Cedar Rapids, Iowa, alleges that Eagle violated the Lanham Act, a federal law that prohibits companies and individuals from infringing upon another company's trademarks and from engaging in false or misleading advertising. The complaint also alleges that Eagle and the other defendants "have misappropriated, or will misappropriate in the future, FREEDOM's valuable trade secrets in violation of state law."
California Consumers Gain Access To Farmers FastQuote
In response to the time-consuming task of shopping for auto insurance, Los Angeles-based Farmers Insurance Group is expanding its FastQuote program, designed to enable consumers to go online and receive a free quote on their auto insurance via the carrier's corporate Web site at www.farmers.com. After first piloting the program in Colorado last August, the program is now being offered to consumers in California. Approximately 200,000 customers have used Farmers FastQuote since its inception. Once on the site, consumers navigate to the Quote My Policy section and answer a couple simple questions. Within seconds they receive a free online quote for auto coverage.
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