A century ago, agents found customers where they gathered—at church, their place of business or the local watering hole downtown. This marketing strategy still works today—only now many agents are going through cyberspace to reach potential clients.
Insurance professionals across the country agree that an aggressive web presence is a prerequisite if an agent wants to write “the electronic herd,” or the new generation of computer savvy people.
“We need to hit them where they are on the web,” said California agent Doug Cohen. “We need to find out what search engines they use, what sites they visit.”
Because the Internet is a vast and ever-changing world, there are no definitive roadmaps for agents developing websites. Agents can do as little or as much as technology allows. They can focus on a particular region or aspire to countrywide sales using telephones, faxes, e-mail and the Internet to overcome geography.
About the only thing that agents can count on is change. Software, hardware and the dynamics of the web itself are constantly evolving-offering new challenges and opportunities.
The following profiles illustrate the unique web strategies of four different agents.
The Thompson Group
Parker City, Indiana
Agency Premium Volume: $4.75 million
Number of People: 9.5
Number of Computers: 10
Computer Network: Windows NT
Agency Management Systems/Major Software: Applied Systems 6.30
Information Technology: Part is done in-house and the rest is contracted through an outside vendor.
Website: Established 5 years ago
Web Host: Westhost.net
Web Sales: No
Agency Functions/Activities Handled through Website: Service, service, service
Number of Employees Who Telecommute: The owner, who lives three blocks from the agency.
In every community, there are business owners who don’t know how to create a website, and who don’t know what to do with one once they get it up. The Thompson Group, an insurance agency based in Parker City, Ind., has capitalized on that need and uses its knowledge of the web to strengthen relationships with new and existing clients.
“I work with a lot of business owners and insurance agency owners who are overwhelmed by e-commerce,” said Andy Thompson. “We go in there and offer a unique, low-cost e-marketing strategy. We help them get a high-speed line and set up a phase one website. Later we can do a phase two website with all the bells and whistles. People are shocked. They say, ‘We didn’t know there was a guy like you out there.’ Within a month, we’re doing their business insurance; then eventually we send a guy in there to write everybody’s homeowners and auto.” The Thompson Group operates its e-commerce consulting as a distinct unit within the agency, giving it equal billing on its website with the departments that sell personal lines, commercial lines, employee benefits insurance and financial services products. It’s a lucrative niche for the agency, with clients paying $100 an hour for the agency’s high-tech expertise.
Thompson can sympathize with clients who see the potential of the web but aren’t sure how to tap it. A few years ago, he was in the same boat. After earning a college degree in 1992 in information and communication sciences, Thompson had gravitated toward insurance sales. In the mid-’90s, his agency wanted to develop a presence on the web. Failing to find any good insurance agency role models, Thompson read a lot of publications and revisited his college textbooks. By trial and error, he got the website up and running about four years ago.
The Thompson Group uses its site (www.thethompsongroup.net) primarily as a communication tool with clients. “When people visit the site, we want them to see us as a young, aggressive company that’s going to bust its tail for them,” says Thompson. “It’s a snapshot of who we are and where we want to be. We don’t have a lot of insurance information on the site.”
Rather than pushing prospects to buy policies online, The Thompson Group uses its site primarily to create a positive first impression and then later as a customer service tool. Face-to-face meetings with new clients are key—then, with clients on the agency books, The Thompson Group uses its website to speed communications.
“We know the site’s successful when we see customers e-mailing us and using our online forms,” Thompson said. “When customers request a change to a policy, we can forward their e-mail to the company.”
The Thompson Group also collects customer e-mail addresses and then sends regular messages on insurance-related topics, such as the importance of scheduling jewelry on a homeowners policy.
Over the years, the website continues to evolve. “We have a university doing a survey of our clients,” Thompson said. “We want to find out what customers want from our website and how we can be more effective.”
Keetch & Associates
Annual Premium Volume: $9 million
Number of People: 20 full-time personnel
Number of Computers: 25
Computer Network: Yes
Agency Management System/Major Software Programs: Applied Wintam, NT
Information Technology: Handled in-house by CIO and financial manager
Website: Established Summer 1998; conducting first major overhaul of 90 percent of website content and functions.
Website Host: Southwestern Bell
Web Sales: No policy sales or automated quotes; instead gather information for
quoting life, health, home, auto and soon BOPs.
Agency Functions/Activities Handled by Website: Claims, general insurance questions, policy change requests, company links, job opportunities, most inter- and intra-office communications.
Number of Employees Who Telecommute: 6, on an as-needed basis
When Keetch & Associates Insurance of Alice, Texas, launched its website three years ago, it hoped to create a higher profile for the small town agency and generate additional sales. Its site, www.keetchins.com, has done both. But there was another, unexpected windfall—the site gave Keetch & Associates a direct link to a computer savvy workforce.
“We’re a small- to mid-size agency with three branches,” explains Agency Principal Rick Dudney. “We are paperless, and it’s been hard to get insurance people with computer skills. Now we hire computer people and train them in insurance.”
Dudney has found that young people are more interested in joining an agency that has a definite e-commerce strategy, including a website and the latest telecommunication technology. “For this new generation coming out of college, if you’re not a technological presence, they don’t want to work for you,” he said.
Keetch and Associates continues to look for ways to expand the reach of its website to potential customers. “We’re registering with as many search engines as economically possible,” Dudney said. The agency’s goal is to establish contracts with a general search engine, and several more specific engines that are insurance-related and ZIP code-based.
Dudney has also formed alliances with other businesses in his region. “We’re linking with related industries, like realtors and auto dealers,” he explains. The South Texas agency’s name appears on those websites, and the other businesses appear on the Keetch & Associates’ site. The marketing strategy has proven to be a cost-effective way to attract website traffic and increase the agency’s name recognition.
Dudney says his site now splits its focus between marketing and customer service. “We still have pages to collect information, but we don’t do instant quotes.” One of the reasons, he says, is that his agency found insurance services frequently provide incorrect quotes. Instead, the site acts as a clearinghouse, distributing data to agency staff. Keetch & Associates then prepares quotes, and communicates back to potential customers via whatever method they prefer—phone, e-mail, regular mail or fax.
In addition to sales, Dudney says a good website gives agencies a way to truly extend their customer service to 24 hours a day/seven days a week. “Clients can get questions answered, add or change an auto. Business clients can print a certificate. People can give claims information, and our site has links to some of our companies’ claims departments.”
Currently, the Texas agency downloads ACORD forms and broadcast e-mails the completed applications to underwriters. When a carrier sends the submission back, Keetch & Associates scans it and attaches the image to the customer’s file.
“The downside is that it’s hard to search that material,” says Dudney. “But the software and scanner hardware is cheap. We have a scanner on every desk.” Combining this digital imaging with its website and e-mail, the agency has achieved a high degree of automation and efficiency.
But Dudney still looks forward to the day when technology makes an end-run around the ever-elusive goal of single-entry/multiple-company interface (SEMCI). He predicts agents will see exciting advances soon that may solve the automation problems that have longed plagued the insurance industry. He says the breakthrough could be XML formats that seamlessly carry information between agencies and companies or the evolution of the Internet into an operating system.
“Technology is making end-runs around SEMCI,” Dudney says. “You just have to decide which way you’re going to go.”
Professional Choice Insurance Services Inc.
Los Alamitos, CA
Agency Premium Volume: $1.5 million
Number of People: 4
Number of Computers: 4
Computer Network: Yes
Agency Management System/Major Software: AMS Prime 2000
Information Technology: Handled in-house
Website: Ensurance.com established in December 1999, BuyQuakeInsurance.com in April 2000, CaContractorsInsurance.com in February 2001.
Website Host: Verio
Web Sales: Auto, homeowners/tenant/ condo, earthquake (residential & commercial), artisan contractors general liability
Other Agency Functions/Activities Handled through Website: Add/delete vehicles, driver changes, coverage limit & deductible changes, add/change lien holder information, check payment history, request quotes.
California agent Doug Cohen knew his website was successful when he came in one recent Monday morning. “We sold five policies over the weekend,” his receptionist said matter-of-factly as she checked her computer and began creating files for the new agency clients who had bought policies over the weekend.
“Five policies!” emphasized Cohen, who switched from the insurance company ranks in 1996 to open his own agency, Professional Choice Insurance Services Inc., in Los Alamitos. “And our agency wasn’t even open.”
Cohen first got excited about selling insurance over the Internet when he bought a life insurance policy in 1997 from Quicken.com. “It pulled up 12 different quotes,” he remembers. “I was able to click and get more information on the companies and the coverages with no pushy salesperson twisting my arm; I hate that!”
The agent, who’s not licensed to sell life, was very impressed with the speed and ease with which he was able to compare a variety of insurance products. “I’m a shopper, and insurance is one of the few necessities of life where you can shop price,” Cohen said. “Now I still had to get my blood drawn and get a medical exam. It took about two months to get the policy.” But nonetheless, the agent could see the possibilities for his small agency.
Cohen began to explore what it took to establish a website and acquire a domain name. “I realized that there’s so much in a name,” he said. After finding many names he liked were already taken, the agent tried typing in “insurance” with an “e” in the fall of 1998. It was available. Cohen snapped up the domain name ensurance.com.
The agency was about ready to launch its site in the summer of 1999. Then Cohen began hearing rumors that something big was in the works that might help him with the problematic issue of binding policies sold on the web. Finally, in September, Arrowhead General Insurance Agency Inc. invited Cohen and a group of other agents to a presentation on a new venture, the YouZoom Network.
Cohen vividly recalls the meeting. “They had fancy PowerPoint demonstrations showing the screens and how you could get multiple quotes, shop, and click on ‘Buy’ at anytime. The other agents were just sitting there, asking things like, ‘Is this legal?’ But I had already done my research. I stood up and asked who I needed to make my check out to.”
Joining the YouZoom Network allowed Professional Choice Insurance Services to get a customized website, including design, hosting and maintenance. YouZoom advertises its main site, then customers flow from the main site to individual agents’ sites. Customers spend several minutes filling out an application online and a few seconds later get quotes from a number of “A”-rated carriers. People who have a question can talk to a live person at YouZoom’s 24-hour, seven-day-a-week call center. Or, while on the web, they can click on the message button and connect via real-time, instant messaging to someone who can respond to questions. If they decide to buy a policy, customers can purchase it online with a credit card, call the agency or pay in person.
YouZoom initially offered agents a platform to sell personal auto insurance, then added homeowners, condo and tenant insurance. Planned expansion of the network is scheduled to include life insurance this spring and health insurance by summer 2001. YouZoom now operates in five states, including Texas.
Subscribing to the YouZoom network costs about $95 per month, with an initial fee of $950. Agents split commissions with Arrowhead, the GA behind the website. Cohen said agents often question the wisdom of paying $2,000 a year to partner with YouZoom. “Some guys say $2,000 is a lot of money—that their wife won’t let them spend that much.” Cohen tells other agents that a month worth of commissions from a YouZoom platform can take care of a whole year’s subscription costs.
But Cohen does add a note of caution: “I attacked this as you would any new business. I told myself not to expect to make any money the first year.” The agency wrote about five policies the first month and now writes multiple policies each day over the Internet. Cohen adds that he has committed himself to spend some time each day to promote his agency over the Internet, whether by advertising, writing articles or other means.
Cohen said his agency wrote primarily commercial lines before joining YouZoom. His commercial lines book has continued to grow, and Professional Choice Insurance Services now writes about $1.5 million annually, with about 45 percent of that business in personal lines.
Cohen is so happy with his YouZoom sales that he has launched two more sites: buyquakeinsurance.com debuted in March 2000; and in February 2001, Cohen opened cacontractorsinsurance.com to sell coverage to plumbers, electricians and other artisan contractors. Because of the more complex underwriting required with earthquake and contractors coverages, the sites don’t sell coverage on the spot. Rather, customers fill out an application online and get a live quote. They can then print, sign and fax the application to Professional Choice Insurance Services. The agency reviews the app, and customers get a binder or rejection in 24 hours.
Cohen’s marketing plan for the future includes selling insurance via the web in other states. He’s already received an Arizona license and is working on a Washington license. Next he’ll tackle Texas. “We’re only limited by licensing,” Cohen said.
Some agents might wonder why a customer in Texas would want to buy a policy from an agent in California. “Price is only the hook,” Cohen said. “But if you don’t follow up with good service, they won’t renew. That’s how we try to set ourselves apart.”
Annual Premium Volume: $20+ million
Number of People: 50
Number of Branch Offices: 16
Number of Computers: 60
Computer Network: Full VPN all integrated
Agency Management Systems/Major Software Used: InsureHiTech
Information Technology: In-house development, with Sengen as an outside resource
Website Established: June 2000
Website Host: Qwest
Other Agency Functions/Activities Handled by Website: Everything but accounting, which is currently being integrated.
Number of Employees Who Telecommute: 20 outside salespeople
As the fifth generation of a Princeton, N.J., agency, Rick Maloy grew up hearing about the automation challenges facing independent insurance agencies. “I used to hear about SEMCI around the dinner table when I was 14,” Maloy said.
Now the New Jersey agent has achieved a level of automation that his great-great grandfather could never have envisioned, building an e-business platform that can handle all the workflow processing that takes place between commercial clients, the agency and its carriers.
“We have created true SEMCI,” Maloy said. “We’re doing integration projects with six carriers—Atlantic Mutual, St. Paul, AIG, Chubb, Kemper and Royal/Sun Alliance.”
Maloy’s plan to revolutionize insurance sales evolved out of his interest in high-tech. He joined the sales force of his father’s agency after college, and over the next 10 years began focusing more and more on the needs of the burgeoning technology industry. Then for four years he was president of Maloy Insurance’s Technology Division, which provided risk management and insurance products to high-tech, biotechnology, telecommunications, environmental and venture capital enterprises. By 1999, he developed a business plan for an insurance operations platform and continued to focus on writing high-tech industries.
The website, insurehitech.com, came online in June 2000. It began with a revenue base of $600,000 from the merged Maloy Insurance, and reached more than $1 million in premium by December 2000. It enables high-tech customers to purchase 28 different property/casualty coverages, ranging from workers’ comp to directors and officers liability to specialized coverages for their particular industry.
Maloy says once an application comes through the website, it drops directly into the carrier’s underwriting computer, which generates a quote within minutes for the customer. Currently St. Paul and AIG are fully integrated with InsureHiTech, with customer data flowing between consumers, the website and carriers via ACORD-based XML (extensible markup language). Maloy expects the other four carriers to be fully integrated by the end of the summer.
Until then, the other carriers can get customer data by dialing InsureHiTech’s extranet. The underwriters print the application and re-key the data into their system, then return to the InsureHiTech extranet to provide the quote. Either way, the website overcomes the problems of faxing, inconsistent application data and paper proposals. The clients see only the web-based information.
Maloy says the process allows his employees to be more efficient and provides a one-stop source for sales, service and educational data. Once all six carriers are fully automated this summer, they will achieve even larger expense reductions by eliminating time-consuming work of re-inputting application and policy information.
InsureHiTech is licensed in 49 states and has offices in 15 states. Its Texas offices are in Austin and Dallas.
In August 2000, JP Morgan Corsair II Capital Partners LP, a private equity fund, gave the company $10 million to expand its eBusiness platform. This funding will allow InsureHiTech to hire additional sales and customer service staff in 32 cities, conduct an extensive public relations and marketing campaign, and work with ACORD and seven of the largest global insurance companies to create and implement an XML standard for the commercial property/casualty industry.
Operating under the umbrella corporation Insurance Revolution, Maloy is currently working to license the InsureHiTech platform to other agents and brokers and become an application service provider. Maloy is negotiating with carriers to get automatic appointments for agents who use his platform.
Insurance Revolution is also creating applications for a variety of other industry groups through the use of their dynamic forms generation technology. “We’ll use our insurance expertise and cutting edge technology to revolutionize the insurance industry,” Maloy said.
The New Jersey agent predicts the insurance industry will save considerable money by efficiently automating the flow of information necessary to quote policies, make changes, report claims and perform other important tasks. “We’ll still provide consultative risk management for our clients, only now the information exchange is done via the web,” he says.
When Maloy reflects on his family agency’s evolution from a bricks and mortar firm to a “clicks and bricks” entity, he’s pleased with both his personal success and what he has to offer fellow agents and the insurance industry as a whole. “It’s a triple win—for agents, clients and the carriers,” Maloy said.
And it’s not hard to see his point. Maloy’s e-business platform would allow insurers to increase their premium volume considerably by creating a single processing center that could handle as many as 20 times the number of agents. Agents would be able to sell and process more commercial policies in less time and gain access to more carriers. And business owners could buy insurance faster and ultimately at more competitive prices.