Quotesmith.com Cuts StaffQuotesmith.com, based in Darien, Ill., in August reduced its full-time staff by 25 employees, or approximately 23%, as a result of its recent decision to shift certain back-office functions related to the handling of insurance applications to third-party administrative firms. The decision resulted from a dramatic reduction of paperwork processing at the company due to increased electronic routing of orders to insurance company home offices and selected outsourcing firms, according to Quotesmith.com chairman and founder Robert Bland. In July, Quotesmith.com reported a net loss for the first six months of 2001 totaling $5.1 million.
Some Web Sites Terminally Poor
Washington, D.C.-based Consumer Federation of America (CFA) has released a comparative study that reveals tremendous differences in the quality and reliability of Web sites offering term life insurance policies. In an examination of 25 Web sites offering comparative term life insurance information, 40% (10 out of 25) are so inadequate and potentially misleading that they landed on CFA's "not recommended" list. These sites are Insure Rate, Intelli-quote, Insure One, Compusurance, SpeedInsure, 4freequotes, accuquote, answerfinancial, ebix and SelectOne. The analysis of 25 Web sites showed a range of offerings from simply providing information to consumers about term life insurance policies, to selling insurance directly from the site on commission, to simply generating leads for agents.
Aggregation May Not Pay Dividends
Although many financial services firms are rushing to provide aggregated account data for their customers, few firms have the right attributes to successfully offer aggregation. That's the conclusion of a study conducted by Forrester Research Inc., which polled senior executives at 45 financial services firms. The study found that 36% currently offer account aggregation on their Web sites and 38% plan to do so by 2003. When asked what their business model is for aggregation, 51% said customer retention, 22% said the potential to charge a fee, and 20% indicated the potential to cross-sell. Meanwhile, Cambridge, Mass.-based Forrester estimates that the technology costs to provide account aggregation-including startup costs, recurring costs, and maintenance and per-user fees-total $9 million over a three-year period, while internal costs-including marketing, customer service support program management and IT costs-total $12.2 million over a three-year period.
Progressive Links Up With Agents
Independent insurance agents who conduct business with Mayfield Village, Ohio-based Progressive Insurance Co. can now offer their customers the convenience of online policy service around the clock. The carrier has introduced a technology that enables agents to link their agency Web site to the company's online service center, www.personal.progressive.com. By doing this, an agency enables its policyholders to make policy changes, online payments, determine when payments are due and check status of a claim.
State Farm Quietly Launches Online Purchasing
With little fanfare or marketing, Bloomington, Ill.-based State Farm Insurance Cos. has launched its first program enabling consumers in California and Illinois to purchase policies online. Through the company's Web site, www.statefarm.com, consumers can now quote and bind auto insurance in California and renters policies in Illinois using a credit card. "We started our 'soft rollout' in late June and we're not pointing people to the site because we want to make sure that it's stable and reliable," says Ann Baughn, State Farm's vice president of enterprise Internet services. Baughn says the program will be expanded to other states, but declined to specify how quickly that will occur.
ACORD Targets Reinsurance, Group Coverage
Pearl River, N.Y.-based ACORD has expanded its life insurance technology standards to support reinsurance and group insurance lines. The initiative expands on ACORD's mission to meet market demand by providing support for a full range of insurance products within a single standard. The life reinsurance initiative, which began in January, is being carried out in partnership with the American National Standards Institute's (ANSI) Life Reinsurance working group. The initial efforts took the ANSI group's Electronic Data Interchange (EDI) messages and incorporated them into the ACORD-supported model for life insurance.
