Skilled drivers have fewer accidents. That's the logic behind a unique auto insurance program devised by Hibernian General Insurance, a Dublin, Ireland-based motor, home, farm and commercial insurance company that claims 26% of the Irish market.Launched in 2001, the program is called Ignition, and it targets inexperienced drivers with clean driving records who drive small cars. Those drivers who meet these criteria can receive auto premium discounts from Hibernian of 20% to 40% for successfully completing a one-day, advanced-driver training course, which is run by the U.K.-based Institute of Advanced Motorists.

Perhaps even more innovative, however, is the ad campaign the insurer launched last summer to promote its Ignition program. In addition to providing the usual toll-free number for people to call, Hibernian also provided radio listeners and newspaper readers a toll-free, text-messaging number to inquire about the program.

"Hibernian didn't come to us with any particular technology in mind," says Steven Forsythe, managing director of Strength5, the Dublin-based technology consulting firm that worked with Hibernian to launch the text-messaging system.

But the technology made sense, he says, because text messaging is so popular in the European market.

"Not all inexperienced drivers are young," says Forsythe. "But many of them are. In Europe, people from the ages of 13 to 40 are completely and utterly text-literate," he says. "Text messaging (which is known as "SMS" for Short Message Service in Europe) is a major phenomenon here."

Minimizing problems

Launched in June 2003, the Ignition text-messaging campaign enabled prospects to dial the typical toll-free phone number to speak with a Hibernian call center representative. As they had done in the past, call center representatives then asked callers several questions to determine if they qualified for the program:

  • Did they pass their driving test within the last five years?
  • Did they have a clean driving record?
  • Did they drive a car with an engine size of 1600 cc or smaller?

What was different about this campaign, however, was that after the first week, prospects also had the option to send a text-message.
Usually sending their name, these callers then received an automated text message back from a system provided by Norwalk, Conn.-based Adeptra Inc., which told them they'd receive a call from Hibernian shortly. Within the promised time frame, the Adeptra system then dialed the inquirer's mobile number and an interactive actor's voice asked the same qualifying questions that the call center reps asked the toll-free callers.

In both cases, people who did not qualify were informed that Hibernian had other products and were given a toll-free number and the Web site URL to get more information.

Qualified candidates, on the other hand, were congratulated and enrolled in the program. Those who had gone through the automated system were congratulated by the automated system and routed to the call center to enroll.

Although this two-way alerting technology is used by U.S. financial institutions primarily for credit-card fraud verification and automated payment collection, insurers running ad campaigns in the U.S. market have several benefits to look forward to-if and when text messaging catches on in the United States as it has in Europe.

For example, the system enabled Hibernian to minimize the problem of call abandonment, which is common with radio (and television) ad campaigns, says Vytas Kiselius, president of Adeptra Inc. "Typically, when an ad runs, all the phones light up, and callers who are put on hold abandon," he notes.

Because text messages for Hibernian's campaign went through Adeptra's automated system, however, people received immediate gratification in the form of instant feedback, and the system staged the outbound calls to qualify those people when Hibernian's call center was able to handle their subsequent enrollment. (Hibernian representatives preferred not to be interviewed for this article.)

The automated system also helped Hibernian overcome another problem associated with products that are targeted at niche markets: inefficient yield, Kiselius says. "This particular program is aimed at a specific group of drivers, and many of the callers don't qualify."

But call center reps didn't have to waste their time disqualifying people who were inquiring via text messaging because Adeptra's system automatically screened them out-61% to be exact. Only 39% of text-message senders were qualified and routed to the call center to enroll in the program.

This feature alone proved to be a boon to the company and its call center reps, Strength5's Forsythe says. "I'll admit, at the outset of the campaign, the people in the call center were slightly wary of what we were trying to achieve by using the interactive voice technology," he says. "They considered it a threat to their jobs."

Deliriously happy

But their suspicion turned to acceptance shortly after the text-messaging ads began running, he says. "They were deliriously happy-because we were handing them qualified leads, which meant they were much more effective in meeting their sales targets."

In addition, Hibernian increased its conversion rate by 19%, and reduced its conversion costs by 34%, Forsythe says.

These improvements were accomplished primarily because the call center was not wasting time screening the 61% of inquiries that did not qualify for the Ignition program.

"We had several intended consequences of using this technology," says Adeptra's Kiselius. "They were: separate the calls so we didn't inundate the call center, qualify people who should get through so the closing rate could improve, and reduce the cost of capturing customers."

But a fourth, unintended benefit also emerged. "We thought if Hibernian previously ran an ad and 300 people responded by calling the 800-number, the company would now run the ad with text messaging and some of those people would send a text message rather than call by phone," says Kiselius.

More prospects

Instead, the number of inquiries to the ads increased by 89% after text messaging was added. "So the technology has increased Hibernian's pool of interested prospects," he says.

Hibernian also was able to dispel a popular myth about the effectiveness of ads that run during what's called "rush hour" in the United States.

Adeptra's platform provides immediate feedback regarding ad response rates. As a result, within minutes, Hibernian knew how many people responded to an ad running on one radio station versus another, how many people responded to an ad running in one town versus another, how many people responded to an ad running on one day of the week versus another, and how many people responded to ads running at different times of the day.

"We assumed advertisements that ran when people were driving to or from work were the most expensive because they're the most effective," says Strength5's Forsythe. "But we found the radio ads that ran at lunch time were the most effective," he says. "It turned out people weren't able to use their mobile phones to respond while they were driving."

Because the technology has been so effective for the Ignition program and Hibernian has collected the names of people who have expressed interest in their products, the insurer is planning to use text messaging for future programs, according to Forsythe.

"There are those people who are qualified and purchased Ignition. There are those who qualified and didn't purchase. And there are those who didn't qualify and didn't purchase," he says. "That a valuable database of people whom we can contact via this technology," he says.

Instant Messaging Gives Small Insurer A Competitive Edge

While one of Ireland's largest insurers is harnessing mobile text messaging to sell a novel auto insurance program, a small U.S. insurance company in the cornfields of Ohio is using enterprise instant messaging to help it compete with the big guys.

"Instant messaging lets us do some things that our large competitors haven't done yet," says Rob Shoenfelt, CIO, at Celina Insurance Group, a $66 million mutual property/casualty insurer based in Celina, Ohio. "They don't have instant chat on their Web site, and we do. Can they put it in? Sure they can. But it was one technology we were able to implement before they did."

Celina Insurance is using IBM's Lotus Instant Messaging (previously called Sametime) both internally and externally. Employees use it to replace many e-mail exchanges among themselves, and agents use it when they visit Celina's extranet.

"When agents log on to our Web site and get authenticated, they are logged in to Lotus Instant Messaging at the same time," Shoenfelt says. Then, when they look up a customer's policy, the underwriter's name appears.

"It will display, 'Marla Overland,' for example," Shoenfelt says. "And there's a little green box, and the agents can double-click on the underwriter's name and instantly have an online chat with her. They don't have to find her number. They don't have to pick up the phone. They don't have to do anything. And they really like that."

In addition to using instant messaging to provide online chats between its agents and underwriters, Celina Insurance also uses the technology to help its agents when they run into computer problems.

"The help desk can run the agent's machine from here," Shoenfelt says. "We'll set up a Sametime chat with the agent, take them into an online meeting, and take control of their computer to fix it," he says. "For a little company in the cornfields of Ohio, that's quite impressive."

Because Celina had already developed its agent extranet, adding the Lotus Instant Messaging capability three years ago took only a few weeks, Shoenfelt says. "It's a fast way to communicate, and it builds community."

It also enables Celina to look bigger than it is, he says. "We're a small company that competes with some pretty large players out there. How do we differentiate ourselves? We try to build the relationship, and instant messaging helps us do that. It does not replace the human relationship. It does not replace the phone call. It augments it. It's just another way for agents to contact us-to work with us. And it's another way for our people to work together."

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