The personalized attributes of Web portals have generated appeal among a growing number of insurers. But while Web portals possess a great deal of upside, the return on investment (ROI) prospects that portals-as well as extranets - can deliver to an insurance organization are still difficult to quantify.Despite this uncertainty, the perceived benefits continue to propel portal adoption. A study conducted by Stamford, Conn.-based research and consulting firm Gartner Inc. found that 75% of property/casualty insurers and 83% of life/health insurers have developed distributor portals or extranets.

Most U.S.-based insurers have invested in distributor portals or plan to invest in building this competency by year-end 2004. Gartner also learned that most insurance companies have reported positive outcomes from their distributor portal investments: Approximately 47% of P&C and 54% of L&H insurers state that more than three-quarters of their distributors access their sites.

The reasons for this are obvious: A portal provides front-end Web customization based on a user's individualized needs, delivering a wealth of pertinent information and doing away with extraneous information.

Undermines SEMCI

The perceived advantages are the reasons why portal adoption will continue unabated, with 60% of P&C and 68% of L&H insurers anticipating that three-fourths of their distributors will be users by year-end 2004.

However, adopting either a niche or enterprisewide portal might be a case of insurance companies relying too heavily on the front-end presentation and not enough on back-end systems integration work-a task that's necessary to optimize the portal's presence.

"Portals will have a role in the distributor network, but they must mature and support real-time transactions," comments Kimberly Harris, senior analyst for Gartner and author of the survey. "Insurers must invest in matching portal to distributor requirements in light of single-entry multiple-carrier (SEMCI) interface developments."

These SEMCI developments enable a growing number of independent distributors to transmit policy data and other submissions one time and be captured by multiple carriers. However, most portals are proprietary to each insurer, which undermines the inroads made through SEMCI. And, there's a lack of integration of portals with desktop solutions, meaning agents must re-key information into multiple applications, states Gartner.

Portals supported by SEMCI models will eliminate the need for distributors to come directly to the insurer for information queries or transaction processing, Gartner states.

To foster new transactional functionality, extensible markup language (XML) designed within a portal is one technique insurance companies can implement to improve exchange of information with surrounding systems.

Garner exposed two other flaws inherent within portals: Solutions are often static, and are unable to provide real-time transactions. There is also a lack of wireless functionality with portals.

Of these drawbacks, the wireless application might appear minor but it's not. Gartner found that only 3% of P&C insurers and 12% of L&H insurers report they have enabled distributors to obtain information from their portals via wireless devices. And that's compounded by the fact that few insurers plan to wirelessly enable their agents in the future.

This runs counter with distributors priorities, as most are eager to activate portals supported by wireless applications. As a result, it behooves insurers to develop a wireless application over the next two years, Gartner advises.

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