Customer service

Although the insurance market has proved to be a hard nut to crack for dot-com startups, that hasn't deterred new entrants from trying to gain a foothold on the Internet.One of the more recent entrants is NetInsurance, an online insurance agency that, claiming to be the first operation of its kind, offers customers the ability to comparison shop for and buy auto insurance in a single online session.

Insurance companies have lagged behind Corporate America in adopting the Internet as a distribution channel. But over the last two years, carriers have directed IT and advertising resources toward developing the technology and promoting their Internet sales strategies.

Nearly 40 years ago-long before Gramm-Leach-Bliley (GLB) was ratified-Charlotte, N.C.-based First Union Corp. was diligently establishing a modest insurance program designed to complement its core banking competencies.

First-time homebuyers who are preparing to sign off on a mortgage loan aren't always cognizant of the sudden long-term financial needs that await them. But savvy financial services providers are."Through the proper customer relationship management technology, we're well positioned to drill down and tailor individual products for customers," David deGorter, president of Charlotte, N.C.-based First Union Insurance Group, explains.

Conseco Inc. has undergone rapid change in Gary Wendt's brief tenure as chairman and CEO. In 10 months at the helm of the Indianapolis-based insurance and consumer finance company, Wendt has overseen the disposal of $1.7 billion of assets-including a $122 million stake in the Argosy Gaming riverboat-and the elimination of 2,000 jobs at Conseco Finance.In April, the company stepped up its efforts to rein in expenses by announcing plans to shift some of the company's call center servicing and back-office processing to India. Related to this decision, Conseco is acquiring exlService, a firm specializing in these functions which is based in Hyderbat, India.

As a provider of group pension programs, New York-based Guardian Life Insurance Co. of America understands that when it comes to mutual fund policyholders, many have an insatiable desire for data that will help them maximize their investments.Unlike typically static health and life coverage, 401(k) plan participants regularly juggle fund portfolios on a weekly or monthly basis. Even if they don't engage in fund reallocation, group pension customers are inveterate monitors of their fund balances-many doing so on a daily basis.

Because their fortunes hinge significantly on fickle Mother Nature-such as natural disasters and other weather-related occurrences-farmers are meticulous about their insurance coverage.

Last year, the Connecticut FAIR plan purchased a software package to create, print and mail policies for property coverage. But that turned into a near-nightmarish experience of extensive problems with setup and testing of the software and lengthy delays waiting for technical issues to be resolved.

Making good on its promise to vigorously defend a lawsuit filed Feb. 20 by eHealth-Insurance Services Inc., InsWeb Corp. filed a countersuit March 22 in U.S. District Court, Northern District of California, San Jose.InsWeb is denying allegations made by eHealthInsurance that InsWeb sent a considerable number of illegitimate referrals to a co-branded Web site built and maintained by eHealthInsurance (see "eHealthInsurance Sues InsWeb," April).

Darwin's theory of natural selection proclaims that the strong species will thrive, while the weak will vanish. It's not unlike carriers' Web sites, where the best ones may have the inside track on survival.In the mid-1990s, when insurance carriers were developing corporate Web sites, many discovered they could do little wrong in the eyes of their online constituency-particularly casual users with modest expectations.

Insurance companies, banks and brokerages are all proceeding aggressively with their strategies to move into each others' territories and provide more financial products to their customers. Between Jan. 1, 1997 and Nov. 30, 2000, 45 insurers had filed for thrift charters with the Office of Thrift Supervision (OTS). And banks are gobbling up insurance agencies at a rapid rate.

Losses and loss adjustment expenses account for 75% of automobile insurers' total costs. Yet carriers invested only $2.5 billion in claims-related technologies in 1999-less than 1% of industrywide premiums.

Last October, Insurance-Noodle.com made a bold strategic move when it expanded its Web platform to attract independent agents. The Chicago-based e-broker, which specializes in small-business insurance, made a gamble that it could change the rules for selling insurance to small businesses.

Techniques that foster thinking outside the box will go a long way toward attracting small-business owners to the Web to research insurance needs, many industry observers believe.For example, Chicago-based InsuranceNoodle.com has begun to augment its small-business insurance product line with personal insurance products. "We are exploring the personal lines side of the equation," says Donald Urbanciz, CEO of InsuranceNoodle.com, an e-broker that provides coverage from multiple carriers. "It's a business-to-consumer play because the companies we sell to have indicated they want a chance to buy coverage for their home or auto. We want to give business owners a chance to buy a workers' compensation policy one day, an annuity another and an auto policy a third day."

Whether she is implementing corporate policies to attract and retain skilled technical employees or conceiving better ways to use technology to deliver service to customers, Andrea Anania believes that a business-first approach serves her well.

Integrate systems. Simplify the business process. Improve the profit. That's what commercial agents need from their insurers.But they aren't getting that kind of support, particularly for small commercial coverages that generate 10% or less in commission, says Donald E. Martin, founder and former chief executive officer of Cal- Surance in Orange, Calif., one of the nation's 50 largest agents and brokers and now founder of EPolicy.com.

Two IT professionals from an insurance company recently called a consultant to find out which e- business companies they should consider for partnerships or alliances.