When the prospect of selling insurance over the Internet first reared its head, one of the initial impressions it left was that it posed a threat to independent insurance agents and brokers. Futurists proclaimed a new world where consumers would no longer leave their homes to shop. They would instead buy everything from major appliances to the mundane needs of everyday life online.
For a little while that is precisely where things appeared to be heading. Shopping sites proliferated on the World Wide Web, and Internet savvy consumers could use their keyboards to buy just about anything, including groceries and insurance. The threat to bricks and mortar retailers and insurance agents, however, turned out to be more illusory than revolutionary.
There are still some sites where consumers can purchase insurance without using the services of an agent or broker, but for the most part they do not appear to be either thriving or proliferating.
The typical site offers personal auto and perhaps homeowners. Although a few have hinted at plans to expand into small commercial lines, nothing concrete has yet developed. Their experience has already led consultants to suggest that consumers prefer to obtain insurance and other financial services from a real person, and that face to face is the preferred selling environment, followed by telephone, e-mail and snail mail.
Internet insurance sites have started to adapt to that reality, offering customers access to licensed insurance professionals in real time through online chat and toll-free telephone numbers.
One exception to the rule can be found at aigdirect.com (http://www.aigdirect.com), a Web site that American International Group (AIG) maintains for direct-to-consumer insurance sales. The site offers small businesses an opportunity to purchase essential insurance coverage without employing the services of an agent or broker. The process starts with an application submitted online and proceeds through quotation, policy issue, policy changes and claims. The emphasis throughout remains on keeping the customer’s life simple and making the entire process as easy as possible.
Access to AIG’s “licensed insurance professionals” is a prominent feature of aigdirect.com. At any point in the process, a customer can reach out for assistance by clicking a link to an interactive chat session. AIG also offers a toll-free telephone number that customers can call to pick up where their Internet session left off or to start the whole process over. By either route, however, the service is not 24/7. Customers have to call or log on between 8 a.m. and 6 p.m., Monday through Friday.
A tool for reaching agents
Consumers and policyholders may not appear to have a high level of comfort for dealing with a virtual insurance agency, but the same cannot be said for agents and brokers. They not only find dealing with a virtual underwriter comfortable, but there are many situations in which they actually seem to prefer it to the flesh and blood alternative.
This has led to the emergence of the World Wide Web as an important distribution channel for insurers. Instead of linking carriers directly to customers and prospects as futurists predicted a few years ago, a rapidly growing family of Web sites strives to strengthen the link between insurers and producers by making the agent’s job easier and his time more productive. The special focus of these sites has been those lines of insurance where thin profit margins magnify the effects of improved productivity: personal lines and small commercial accounts.
In the small commercial arena agents and brokers can expect to encounter company Web sites that offer a complete set of basic coverages for a small business: a proprietary businessowners package policy, workers’ compensation, commercial automobile and umbrella. The carrier’s Internet platform will permit the agent to submit an application, receive a quotation and detailed proposal, issue the policy and process policy changes online.
Other features agents can expect to find now or in the not-too-distant future include claims reporting and inquiry, billing inquiry and renewal processing. Some systems also perform some or all of the underwriting.
A Web-enabled single entry multiple company interface (SEMCI) is not there yet, but insurance companies have expressed a commitment to making it happen. And a few even have one or two components in place. Some insurers tell you that they are expecting SEMCI over the Internet, but they are not yet ready to project a due date. Broker and agent portals on insurance company Web sites have even started talking to the producer’s agency management software.
The agent as centerpiece
The new breed of insurer Web sites expresses a continuing commitment to the independent agent and the American agency system. They represent a vote of confidence by insurers in their traditional distribution channels.
“We really feel like agents have been and will continue to be the primary successful distribution vehicle for small commercial insurance,” explained Patrick Gee, vice president of operations for small commercial and personal lines at Travelers Insurance.
Issue Express Net, the Web platform Travelers uses to communicate with agents and brokers, is a development of its Issue Express, a quoting and policy issue application the company has offered its agents for about eight years through IVANS. The Web-based application has made things simpler and faster, Gee said, cutting training time for new customer service representatives (CSRs) to a few hours from as much as three to five days.
Another advantage of Issue Express Net is the agent’s ability to enter data into an application directly from the agency management system, transmit it through Issue Express, and then access the information over the Web. WinTam users can get a quote delivered to their agency management systems in as little as 40 seconds. The system allows the agent to request policy issuance using Issue Express Net over the Internet, then automatically downloads the issue information to the agency management system.
The electronic business center (EBC) at the Hartford puts the emphasis on giving agents and brokers control over the Internet environment. “As part of the Hartford experience we’re using technology to help and partner with agents and brokers, and to continue to grow our commercial business,” said Rozalyn Murphy, director of EBC strategy with the Hartford. “Every agent and broker has unique needs. What we’ve done is we’re supporting these needs through a variety of automation solutions.” The process of getting started with the Hartford is a little more complex, but it gives a system administrator within the agency control over each individual user’s access.
Zurich North America Small Business takes another approach to meeting the agent’s needs—one that puts thoroughness over speed. The company’s Internet portal, eZSB, can take up to 15 minutes to deliver a quote. That may sound slow by comparison to other companies but only because Zurich NA has fully underwritten the account before quoting. “When an agent enters that data into our Internet platform,” Bill Griglock, senior vice president, marketing at Zurich North America Small Business explained, “we have an expert underwriting engine behind it. Today more than 75 percent of the stuff that comes in to us gets underwritten by that expert engine. There’s no human intervention required.” The online underwriting ability, he added, often allows a CSR to obtain a quote and bind the business during a single telephone conversation with the prospect.
Agents appear to have taken a liking to the Internet platforms insurance companies are sending their way. Zurich NA reports more than 40 percent growth in its small business unit over the last 14 months, and attributes its success to the 30,000 users at 11,000 agencies who come to the company over the Internet. About 85 percent of the small business accounts the Travelers writes arrive at its Web site. The Hartford has signed up almost 22,000 individual users from 5,000 agencies and has between 4,000 and 5,000 agents waiting to get into the system. They are answering the companies’ vote of confidence in the American agency system with one of their own for the insurers’ Internet platforms.
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