Easy, fast and accurate. If agency Web sites with online personal lines rating systems can't meet these criteria, they are doomed to failure, says Bruce Hopkins, president of Cascade Insurance Brokers, Inc., in Silverdale, Washington, a high-tech agency with a cutting edge Internet presence.
"We are living in the information age and our business is driven by information. If your customers can't get the price and coverage information they want when they want it, they won't be satisfied with your service. They will go elsewhere," he says. "People who shop on the Internet really don't want to talk to an agent for rating and coverage information. They want to be able to locate coverage, compare prices and make their decision at their convenience--at 2 a.m. or any other time.
"And agents shouldn't need to have personal contact with every shopper," he continues. "Agents spend too much time with prospective customers who are just shopping for price and coverage and don't require the counseling and expertise agents also provide."
Since August 1998, Cascade Insurance has been offering online rating for personal auto and homeowners coverages on its agency Internet site (www.cascadeins.com) using a homegrown online rating system that Hopkins says beats out the competition for speed and accuracy in his region.
The site allows Internet shoppers from Washington State to enter a ZIP code and some basic underwriting information using simple online forms. In less than one minute, the system generates a list of comparable quotes and limits from more than 20 insurers in the state.
Users can choose a quote from the list and automatically send electronic mail to Cascade for purchasing the next business day--or just print the quotes for reference.
The Cascade Insurance Web site also features online accident and loss forms for auto and homeowners claims and coverage update forms which can be electronically mailed to the agency. The site generates about 20 policy sales from some 500 sessions per month and has been profitable since late last year.
"I was exposed to the Internet four years ago by my brother Brian who is a computer programmer," Bruce Hopkins says. "It seemed to me that the Internet was the breakthrough that agents had been waiting for to automate the personal lines sales process. Personal lines has become a commodity business with purchase decisions based primarily on price and convenience. The only way for an agent to succeed in personal lines is to find a way to deliver pricing information in an easy and efficient way--and not spend too much time doing so."
Early last year, Hopkins began searching for an online rating system that could satisfy his evolving technological vision. He was disappointed, he says. "I looked at most everything out there, including InsWeb which has become the industry leader. Everything seemed too complicated and too time consuming. I wanted something that was simple and fast."
In June 1998 Bruce and his brother Brian began developing their own online rating and quotation system using regional comparative rating data from Multico Rating Systems, Inc., in Kirkland, Washington. Multico is a comparative rating software vendor that maintains an automobile and homeowners insurance database for more than 100 insurers in the Northwest.
The resulting system is being marketed by the brothers and other partners in a new Internet design joint venture, IBQ Systems in Chelan, Washington. IBQ now provides Internet design and rating services for about 25 agents in the Northwest.
"When Bruce first asked me to look into the prospect of designing an online rating system, I was amazed at how backward the insurance industry was in terms of using the Internet effectively," says Brian Hopkins, president of IBQ. "Most of the insurers were still involved with proprietary systems for upload and download of underwriting information and among the few agents that had Web sites, most were little more than post cards advertising the agencies.
"It was pretty clear that the agents needed to build more functionality in their Web sites to not only expand their reach but also improve their overall efficiency. The Internet was a golden opportunity for agents, but they had to learn to push their Web presence with more applications and better marketing."
IBQ charges $1,200 to $1,500 for a basic Web site design and $75 per month to maintain the site and the rating database. However, an agency must provide its own dial-up Internet service provider (ISP) for Internet access.
IBQ can design new Web sites for agencies or can link its rating engine to an existing Web site and limit quotations to specific carriers engaged with an individual agency. Rates are updated whenever the carriers notify agents of a rate change. Customer quotes are e-mailed directly to agents immediately after they are activated online. The Internet company also is developing an online connection with ChoicePoint, Inc., in Alpharetta, Georgia, a data service company that provides background checks and other underwriting information.
Cascade's Hopkins says his agency Web site is just the beginning of application possibilities for the rating and quotation system. Cascade plans to promote the Web site with local advertising and develop marketing partnerships with local mortgage companies and car dealerships. Cascade is already using the system to provide quick quotations for customers of Puget Sound Mortgage and Escrow Company that shares one of its locations with one of the Cascade offices. The mortgage company has a data collection program on the Internet, Hopkins explains. "The data collection is essentially the front-end of my homeowners online rating but it does not automatically produce a rate. The mortgage company can't directly run my comparative rater because the loan officers aren't licensed agents. The data is e-mailed to my system and then I run it through my rater online and return it to the loan officer. The entire process takes about two minutes."
Access to quotes at auto dealers & banks
Hopkins says the agency also plans to build insurance kiosks that can allow mortgage and automobile customers to shop for insurance within banks and auto dealerships as they complete their other purchases--a natural extension of online marketing.
Other agencies are also creating new marketing applications using the IBQ software. In July, Andre-Romberg Insurance, Inc., a Spokane, Washington-based agency, went online with a Web site designed by IBQ that offers online quotes from the Multico rate database as well as special discounted quotes from Unigard Insurance Company, a regional carrier based in Bellevue, Washington. The 50-year-old agency began working with IBQ in May to develop an Internet presence and provide direct marketing to a large financial services client company, says president Charles Romberg.
Andre-Romberg is the exclusive agency for the Spokane Teachers Credit Union (STCU) that provides financial services for 68,000 members including 20,000 teachers. The new Web site (www.andre-romberg.com) promotes a 15% discount on automobile insurance and a 5% homeowners insurance discount to full-time school employees.
Teachers respond well to agency's Internet approach
In its first two weeks of operation, the new Web site generated nearly 200 user sessions, producing 26 auto insurance quotes and 6 homeowners quotes. The agency has yet to advertise the site outside of the credit union.
Romberg says the Internet is a perfect communications device for reaching the STCU members, many of whom use the Internet as part of their teaching. The site features nine hyperlinks that connect directly to and from the STCU Web site. Members that use the credit union services can jump directly from the STCU site to Andre-Romberg to shop for insurance.
"Credit union members can get an online quote in less than two minutes--faster than ever before--and more effectively than shopping with other agents. The Web site can also be a great way to communicate information about other insurance products that are not part of the STCU discounts," Romberg says.
Andre-Romberg expects to expand its Internet-based marketing later this year after the agency evaluates its performance with the credit union.
Unigard also is developing an Internet-based application upload service with IBQ that eventually will speed delivery of policies to customers that apply online, according to
L. Arnold Chatterton, vice president of systems architecture and agency services. The insurer has about 600 agents, about 280 of whom have an Internet presence. About 210 agents download policies from Unigard.
"A lot of companies have developed a graphical user interface that makes agency uploading appear easier, but the process really hasn't changed very much," he says. "It's all a bunch of proprietary systems. Everyone is moving to the Web. A Web-based front end for agency-company interaction is really the biggest breakthrough we've seen in agency-company communication."
Chatterton says that agencies need to be able to upload new business to their insurers and download responses if they are to compete effectively against direct writers and captive agents. However, agents and insurers are still lagging behind other industries in developing a seamless rating and application system with good security for personal information.
For Unigard, an expanded Internet presence could be a competitive edge in an intensely competitive market. "We are not really a price leader in most personal lines coverages," he says. "What Unigard has to offer is service and security. Our use of new technology enhances our ability to provide that through our agents. IBQ did an excellent job in its work with the Multico multiple company rating database, but it's only the beginning. Companies need to take greater advantage of these applications on a broader basis," Chatterton says.
The Unigard upload system is scheduled to go online with Cascade and other IBQ agents this month. *
The author
Len Strazewski is a Chicago-based freelance writer specializing in marketing, management and technology topics. He has written on insurance for Rough Notes, Business Insurance, the Chicago Tribune and Human Resource Executive, among other publications.
IBQ Systems
Web site: www.ibqsystems.com
E-mail: hop@ibqsystems.com
Phone: (877) 444-0208
Cascade Insurance
Web site: www.cascadeins.com
E-mail: bruce@cascadeins.com
Phone: (800) 400-1097
©COPYRIGHT: The Rough Notes Magazine, 1999