InsurQuote executives Frank Weinrauch, executive vice president business development; William B. Woahn, president; and David L. Whetten, chief executive officer, appear in front of the Wasatch Range of the Rocky Mountains near InsurQuote's Provo, Utah, headquarters.
InsureOne, one of the largest independent agencies in the Midwest, built itself into a personal lines powerhouse in Illinois, Indiana and Wisconsin with broad-based consumer advertising and direct marketing--but that wasn't enough.
Now the Bedford Park, Illinois-based agency is turning to the Internet to expand nationwide by partnering with InsurQuote Systems, Inc., to offer comparative personal auto insurance rating and coverage delivered by automobile sales Web sites as well as its own InsureOne.com.
InsureOne, with 80 neighborhood sales offices, now targets business affiliations and online sales for its next level of growth with InsureOne.com, the agency's Internet profit center, executives say.
"We built ourselves into an insurance fulfillment specialist. Our expertise is providing fulfillment services for portals and other Web sites--from underwriting and conducting credit checks to completing the sale and servicing customers," explains George Daly, InsureOne.com executive vice president for marketing.
Since 1997, the agency has been providing comparative rating and quotes through its own Web site, offering personal auto, homeowners, life and health and commercial package coverages from multiple insurers, including CNA, Kemper, Travelers and Progressive.
InsurQuote's online leads allow agents to make direct contact with cyber insurance shoppers according to Frank Weinrauch.
The agency also pursued affiliate relationships with other online sales Web sites; but like many agencies with strong local relationships, InsureOne was limited to consumers in its region. "We just didn't have the comparative rating data to provide broader service," Daly says.
However, in August the agency began fulfilling quotes from Autobytel.com, one of the nation's largest auto sales Web sites, beginning with three states, but soon to expand to 38 states.
Daly says that there is a natural link between car shopping and buying insurance and that the relationship between Autobytel customers and InsureOne provides a great growth opportunity for the agency. In the first full month of operation, the agency received about 175 new customer leads.
"That's been keeping us pretty busy and we're doing well in converting the leads into sales," he says. "The leads we're receiving are well-qualified auto shoppers who are ready to buy a car and ready to purchase the insurance coverage they will need to drive their new car. They've shopped for price and coverage and they want to complete the transaction."
The key link between the auto sales Web site and the agency is Provo, Utah-based InsurQuote, Inc., which provides the comparative rating data and software that powers the insurance shopping application. Founded in 1986 to develop comparative rating databases, the company now known as InsurQuote Systems serves some 5,000 agents.
The company made a huge splash at the annual Independent Insurance Agents of America convention in September with an announcement of plans to build "the distribution backbone for online insurance" delivered over the Internet.
"What we are developing is the end-to-end solution for online insurance sales," says InsurQuote President William B. Woahn. "Internet market research indicates that by 2003, about 15% of all insurance sales will be written through the Internet. So far, agents have not been able to take full advantage of this growing trend. Internet shoppers want and expect the ability to compare prices and coverages online and come close to completing their insurance transaction.
"The bottleneck is due to the complexity of the rating process itself. Although rating information currently exists in various computerized systems, it is in a variety of formats and not easily accessible by consumers."
Woahn says that InsurQuote is aiming to provide a comprehensive electronic commerce engine that would involve agents, insurance companies and consumer marketers in a shopping system that is seamless and virtually invisible to shoppers. Internet shopping portals--comprehensive consumer sites--would aggregate consumers by allowing them to research autos, homes and other products and then also offer them relevant insurance products.
"InsurQuote is aiming to provide a comprehensive electronic commerce engine that would involve agents ... in a shopping system that is seamless and virtually invisible to shoppers."
--Bill Woahn
By using Autobytel.com, for example, automobile shoppers research and order their new vehicles and then shop for personal auto insurance by entering their vehicle information and other underwriting data into an online form.
InsurQuote's QuoteSearch comparative rating engine generates accurate quotes from a series of insurers in a simple form that allows shoppers to review comparable price and coverage information. When the shopper chooses a quote and coverage, the underwriting information is forwarded by electronic mail to a local agent who represents the quoted insurer.
The agent then can follow up the sales lead, confident that the online shopper is informed and ready to purchase coverage. Eventually, shoppers will be able to complete the transaction by receiving an insurance policy from the same online connection, Woahn says.
Frank Weinrauch, executive vice president of business development for InsurQuote, says agents have a special role in online insurance sales that is protected and enhanced by the comparative rating software and lead referral.
"For many years, agents have been concerned about losing market share to direct writers and captive agents. However, agents have always maintained an edge in the value-added service they provide their customers: their product knowledge and practical advice. Despite the competition, agents continue to provide great comfort to their customers with their service and insight."
The lead referrals provided by the InsurQuote system operating on Internet shopping portals allow agents to make direct contact with insurance shoppers and build the customer relationships that allow them to continue to provide enhanced service, Weinrauch says.
"Fulfillment of leads is a critical component of the online shopping experience and agents are well-positioned to complete the transaction and provide the counsel that many insurance shoppers still require," he says.
However, the online shopping system is more than a defensive tactic for agents. The lead referrals allow agents to expand their customer base within their region and, for agents who are willing to acquire additional state licenses, expand geographically.
Earlier this year, InsurQuote also introduced a new comprehensive software package that allows agents to build an Internet presence with a hosted Web site and interact more effectively with the comparative rating engine.
InsurWare allows agents to create their own electronic commerce Web site with built-in templates. These "online storefront" sites can be hosted by InsurQuote or another Internet service provider (ISP) and can be used to provide comparative rating for an agency's own customers who come directly to its site.
The software then allows agents to combine sales leads from their own sites with any leads received from relationships with shopping portals such as Autobytel.com and load them into an existing agency automation system for fulfillment.
The software also can be used by agents to build online discussion groups, chat rooms and instant messaging with clients.
InsurQuote charges a $395 annual license fee (not including Internet access and hosting) for the software. The fee includes processing of 1,000 leads from an agency Web site. Agents are charged a referral and transaction fee of $10 to $50 for leads received from a portal site.
Schwartz & Co., a Dallas-based independent agency, also has been processing leads from Autobytel.com since September. In the first month, the agency received more than 200 leads, according to David Tate, executive vice president.
For the 11-person firm, the Internet connection has been a personal lines breakthrough, he notes. "For several years, we have not been aggressively pursuing personal lines sales. The competition has wrung all of the profitability out of personal lines and the cost of developing sales was just more than we could afford.
"But now we have been able to turn personal lines back into a profit center, beginning with personal automobile insurance. We have been doing extremely well at converting the leads to sales and the new business is definitely profitable. We are well ahead of our expectations."
Schwartz & Co. has been using InsurWare to process leads and manage the client information that is developed with the leads received from Autobytel, Tate says. Once a lead is received, it is entered into the agency's management system and referred to its automated call center for fulfillment.
"Once we get third-party data integrated, such as motor vehicle records and credit scoring, we should be able to process and confirm binding of policies within 15 minutes of receipt. At that point we anticipate closing 50% of all purchase requests."
Tate says the agency is likely to expand personal lines sales to include homeowners and life insurance as soon as comparative rating information is available and portal sites have been identified.
Though the agency is focusing on personal lines sales over the Internet, Tate is convinced that commercial lines sales will gravitate to the Internet if the technology and the agents can combine to offer the right levels of service. *
The author
Len Strazewski is a Chicago-based freelance writer specializing in marketing, management and technology topics. In addition to Rough Notes, he has written on insurance for Business Insurance, the Chicago Tribune and Human Resource Executive, among other publications.
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