TECHNOLOGY

24x7x365

Some agents & vendors are making the most of Internet technologies

By Nancy Doucette

Pop quiz. What business are you in?

If you answered "insurance," you'd get partial credit; but in today's technology-laden environment, the correct answer is "the information business."

For years, marketing experts have uttered the mantra that insurance agents need to be ready to sell when the customer or prospect is ready to buy. To some that means sending out regular newsletters to keep the agency's name in front of the customer. Others rely on marketing software to remind prospects of the products and services the agency provides.

But for the "I want it now" generation of customers and prospects who want to analyze their options when it's convenient for them, agents need to be able to respond 24 hours a day, 7 days a week, 365 days a year. For a growing number in the agency ranks, the solution to the 24x7x365 dilemma is the Internet.

Garry Kaufman jumped on the Internet bandwagon early on--a relative term in Internet years. His Galveston-based agency became a customer of Insurance Information Exchange (iiX), in late 1995. Celebrating its 106th anniversary this year, Galveston Insurance Associates knows the importance of keeping up with the times. (When the term was coined about 18 months ago, an "Internet year" was the equivalent of three months on our Gregorian calendar because the technology was perceived to be changing so quickly. Given the even faster progression of technology now, a three-month "year" is probably too long these days.)

Kaufman joined his father-in-law's agency about three years ago, migrating to the insurance business from pharmaceutical sales. He brought with him the unique perspective that coming from another industry provides. Drawing on his father-in-law's 30 years of insurance industry experience, Kaufman quickly came to understand that the philosophy and practice that once drove the insurance industry had changed. Sales and marketing make the world go 'round. With pharmaceutical sales being the highly competitive business it is, Kaufman knew what had to happen next in order for Galveston Insurance Associates to step up to the next level. The answer: http://www.galveston-insurance.com. Technology, he reasoned, would guide the agency to the next level. The agency includes its Web site address on business cards and in its Yellow Pages ad.

The response to the agency's Internet presence was not what Kaufman expected. "We aren't doing a lot of business on the Net as far as sales go, but we're seeing that more and more customers like to communicate with us that way (via e-mail)." And that, in turn, has prompted the agency to think about its E&O exposures in this context. They already have a disclaimer on their voicemail system informing callers that coverage cannot be bound using the voicemail system. Kaufman says the agency now has to put a similar disclaimer at the Web site informing customers that coverage cannot be bound by way of e-mail.

He says the companies the agency represents are apparently gearing up for more electronic communication as well. The agency has received a number of surveys recently from insurance companies asking who within the agency has e-mail access and what those e-mail addresses are.

But is Kaufman disappointed that sales from the site aren't more brisk? He reports the agency has sold a couple of good-sized accounts which have paid for the time and effort that went into developing the site. However, he says, "I didn't want our Web site to be a huge selling tool for us. It's a good information tool. It's a good way to get the process started. I think there are folks who are on the Net so often, they'd prefer to go there first. It's important to give them that option."

Now that's not to say that the agency doesn't receive requests for quotes from the site. But in terms of quoting and selling without the personal touch, Kaufman says he still prefers the face to face transaction.

The agency's systems coordinator, Edgar Marines, maintains the site, which practically eliminates any lag time in updating information at the site. It also helps hold down the cost of maintaining the site. Kaufman says it's important to keep information current at the site, especially when you spotlight the companies your agency represents and the programs and coverages they offer. He says they're thinking about including an electronic newsletter which would provide consumer information to customers and prospects. "We don't know who visits the site but then does not contact us, so we want to provide as much information as we can."

Atlanta agent Andy Siegel launched his agency's Web site (siegelinsurance.com) in the fall of 1996. Being a largely personal lines agency catering to upscale households, Siegel Insurance created its Web site in part with the transferred executive/ newcomer to the area in mind. Siegel says the Web site address appears on the agency letterhead, but a significant amount of traffic comes in by way of individuals using search engines such as Yahoo. So, the individual who may be relocating to Atlanta from another part of the country would enter a few key words such as "auto," "insurance" and "Atlanta" and a short list of Atlanta-based agency names appears. He observes there are countless agencies in the Atlanta area, but Siegel Insurance is one of only a few that have taken the extra step to define key words for search engines so that newcomers to the area can locate an insurance agent.

Having the site enhances the agency's professionalism, according to Siegel. "It levels the playing field. It helps us compete better," he says. And once a quote request is received, he says that contact is responded to with a phone call. In other words, the sales process remains much the same as it always has been. The risk management aspect of the sale is especially important. So whereas people may specify certain limits based on their current coverage, the agency still counsels them on what they need.

The "profile" of the individuals using the Web site as the initial point of contact supports the theory that "tomorrow's" customers are going to be more comfortable working in an online environment than earlier generations have been, at least during the information gathering stage. Siegel says the individuals contacting his site are under 30 and a significant number are in computer-related businesses (programmers, consultants, etc.)

The Siegel Insurance Web site also provides a wealth of consumer information from which customers and prospects alike can benefit. He describes the information as "brochure material" covering a range of topics categorized under the headings "Personal and individual issues," Quick read brochures," "Insurance buying guides," and "Business issues."

Eventually, he hopes to have links to and from related businesses . . . a mortgage company, real estate firm, jewelry or fine arts appraiser.

Another benefit to having a Web site is being able to get updates to Applied Systems' WinTAM agency management system product which the agency uses. Siegel simply accesses Applied's Web site (appliedsystems.com), inputs the agency's password and is able to download the updated files. He says Applied also has an FAQ site (frequently asked questions) for users with support questions and if the user can't find an answer there, the user can register a support request at the Applied Web site.

Siegel's long-time interest in computers made him the logical person to maintain the site for the agency (he also is the system coordinator for the agency's management system.) He relies on the summary report from his Internet service provider (ISP) to learn about how visitors arrive at the Siegel Insurance site and what links they use and don't use once they get there. This information helps him keep the site fresh and up to date. The constant flow of "hits" around the clock confirms we're no longer in a 9-to-5 business world, he observes. But with the agency's Web site, the lights are always on. *

How Fast Can Fast Get?

The Web site for Livingston, New Jersey-based Benisch & Company Insurance (benisch.net) is the newest of the ones we visited for this story. It went online in mid-February 1998. But that doesn't mean the agency's executive vice president Joel Benisch is new to the Internet. He reports he's been using the Internet to e-mail his international client base for over 10 years--well before the World Wide Web frenzy. Benisch anticipates that within the next two years, the agency's Web site will service 80% of the requests for certificates, simple claim reports and coverage verification. In other words, "everything we use the fax for today," he explains.

But his imagination doesn't stop there. Digital subscriber lines (DSL), are the next hot technology, he believes. Of particular interest is the asymmetrical digital subscriber line (ADSL)--high-speed digital modem technology that provides access to the Internet at rates many times faster than the fastest dial-up modems available today. The technology works over existing copper telephone wires connected to most homes and businesses. Most of today's modems operate at 28.8 kbps. The DSL "throughput" is comparable to a T1 line, in use largely in commercial operations today. Via a T1 line, data moves at 1.54 mbps.

What Benisch is looking forward to is a time when everyone has DSL technology. Then, it won't matter whether he is at someone's home to sell life insurance or at a commercial prospect's location, he will have access to a T1 line by virtue of the ADSL technology. He acknowledges that it will be quite a while before DSL capabilities are widespread but he says it's inevitable, given that local telephone congestion will worsen as demand for large blocks of data and interactive video increases. Once ADSL technology is in place, "the whole landscape will change," he says. "We'll be renting software on an 'as needed/as used' basis. Software will no longer be sold the way it's sold today."

A Browser-Based
Management System

Today's efforts by agents on the Internet occur outside the boundaries of their agency management systems. It's a necessity, as none of the agency management systems is Web-enabled at this point, although each of the major vendors is using the Internet to some extent for support or distribution of product enhancements. So the race is on for the vendors to bring a Web-enabled product to market.

AMS (ams-services.com) expects to have its browser-based agency management system product available by July 1, 1998. But according to Richard Roy, executive vice president and chief marketing officer for AMS, this development effort isn't strictly a competitive issue. Based on input from the AMS Users' Group and a number of focus groups, AMS learned its users want a browser-based system. They want it because they believe the Internet is probably the only place where all the industry players--agents, brokers, MGAs, banks, insurance companies and reinsurance enterprises--would ever all be, Roy explains.

He goes on to say that the browser-based management system is not a set of tools that will change the business, but rather it's a whole set of technologies that allow the business to change. So where agents are going to collect their data and how they're going to process it will change substantially with a browser-based system.

The browser-based system will give customers greater access to their account information which will enable them to initiate certain activities now handled by agency personnel. The agency can prescribe which customers will have what level of access. For instance, some customers will have "view only" access, whereas others may be able to request a change, process a certificate or change additional interest files. Some may be permitted to complete first notice of loss reports.

Maintenance costs will improve significantly as well with a browser-based system, Roy says, because the work will be moved out of the agency--even the job of the system coordinator could conceivably be outsourced to the Internet service provider.

AMS will be putting its browser-based agency management system into approximately 400 agencies currently running the AMS Sagitta product. Because it's using Internet technologies and the browser as a desktop tool, AMS is not going to "name" its browser-based products. Doing so would suggest they are a replacement of or a substitute for something, Roy says, and they aren't. The browser-based system is an AMS technology strategy that is going to embody all its platforms.

©COPYRIGHT: The Rough Notes Magazine, 1998