Overseeing the development of business-to-business Web communities are David Willis, editorial director, VerticalNet Service Group and managing director, PropertyAndCasualty.com; Mark Walsh, president and CEO of VerticalNet; and Brian Lawlor, industry manager of the insurance group for VerticalNet.
Move over personal lines! Commercial insurance sales are ready to hit the Internet in a big way--and independent agents may be able to get more access than ever to business insurance buyers online.
But first, agents will have to commit to the new world of electronic commerce and develop expertise in business niches that are hungry for information about managing their insurance and risk management needs, says Brian Lawlor, industry manager for PropertyAndCasualty.com, the insurance group of VerticalNet, Inc., in Horsham, Pennsylvania.
VerticalNet is an online media company that specializes in building business-to-business Web communities that provide news, information and electronic commerce services to specialized business niches. The parent company home page (www.vertical.net) indexes more than 55 business communities ranging from the research sciences to industrial manufacturing.
The company's insurance industry community, PropertyAndCasualty.com, has been online for more than two years and features insurance industry news and analysis targeted to both buyers and insurance producers, says Managing Editor Dave Willis.
Willis, a former communications executive with Cigna Corp. and the CPCU Society, says the news and editorial content attracts a broad range of industry leaders but has a particular attraction for corporate insurance buyers. Unlike print publications, PropertyAndCasualty.com has virtually unlimited space for news and features and can host content ranging from hourly-updated breaking news to practical risk management advice to meet very specific industry needs. "Editorial content is the big draw and the Internet is the first medium truly built for the unlimited delivery of information," he says.
The insurance site also features a searchable product and services directory, a guide to insurance-related training, and a business services center for sponsoring vendors, including agents. A "storefront" Web page listing in the business services center costs about $9,500 and includes e-mail and links to a sponsor's own Web site.
PropertyAndCasualty.com also works directly with other VerticalNet business communities, providing a powerful marketing relationship for agents and other insurance industry service providers. Like PropertyAndCasualty.com, each business niche site features topical news, industry white papers, interactive software, directories, classified ads and job listings among other services.
The niche sites also forge e-commerce relationships between product and services vendors and corporate buyers in each vertical industry by hosting an online marketplace for each industry. These individual business marketplaces are the marketing strength of VerticalNet and a powerful source of referrals for commercial agents, says Lawlor.
VerticalNet sites generate more than two million user sessions a month, a huge audience of corporate executives looking for information about products and services for their companies. According to VerticalNet survey research, about 20% of users influence or are responsible for the purchase of insurance or related services for their companies.
Agents can reach this buyer audience through traditional advertising, directory listings and online storefronts linked to PropertyAndCasualty.com, notes Lawlor. But they also can promote themselves and their expertise to buyers through individual e-mail newsletters sent directly to users of other VerticalNet sites, and through links to those sites, too.
Lawlor says the company delivers more than 600,000 newsletters to users of various VerticalNet sites. These newsletters contain practical business information, including tips, tools and advice about insurance and risk management provided by PropertyAndCasualty.com participants.
The content, newsletters and product directory searches have been averaging about 60,000 business service referrals per month, including about 1,000 referrals for insurance-related services. The number of insurance referrals will grow as more agents and service providers participate in the site and provide more content for the newsletters, Lawlor says.
The audience for VerticalNet editorial content is also growing through strategic partnerships with other Internet service providers. The company has partnership relationships with AltaVista, Excite, Deja News, Lycos and Yahoo, among other Internet portals.
"The next step ... is online application and comparative rating. PropertyAndCasualty.com is presently testing a comparative rating system for workers compensation, umbrella liability and businessowners package policies that could be online later this spring."
-- Brian Lawlor
In January, VerticalNet announced a strategic alliance with Microsoft to deliver business-to-business e-commerce services and content to small to medium-sized businesses that wish to reach new markets and transact business over the Internet. As part of the agreement, Microsoft is investing $100 million in VerticalNet and providing marketing and distribution support through the MSN Network, Microsoft bCentral small business portal and Microsoft.com. Microsoft said it would bring VerticalNet at least an additional $200 million in storefront business.
"The growth in trading partners in Microsoft can bring enormous value to our global buyers and suppliers," notes VerticalNet President and Chief Executive Officer Mark Walsh. This new alliance will provide new and flexible ways for companies to buy and sell products on the Internet. Companies will have the choice of using a VerticalNet storefront, e-commerce center, auction technology or other commerce features all built on top of Microsoft's platforms and Web-based services.
PropertyAndCasualty.com is able to deliver an abundance of information--features and hourly-updated news as well as practical risk management advice, according to Dave Willis.
"These tools give companies a commerce platform and instant access to communities of targeted buyers in any of our vertical markets. It's a major commitment to creating liquid markets where procurement and transactions can flourish."
Norman Spencer McKernan, a regional commercial brokerage and managing general agency with offices in Philadelphia and Dayton, Ohio, has been working with VerticalNet for about four years. The agency began its relationship with VerticalNet as the company's agency of record and later became a participant in PropertyAndCasualty.com as a business services provider resident on the Web site.
For the past two years, NSM has maintained an Internet storefront on PropertyAndCasualty.com that describes the capabilities of the agency and lists special programs that may be of interest to the VerticalNet business communities. Specialty insurance programs include package coverage for commercial food equipment service companies, construction equipment machinery, automotive parts manufacturers, medical transportation and temporary employment companies.
The agency also provides educational editorial content that is distributed via electronic newsletters to VerticalNet and PropertyAndCasualty.com readers. For more information, corporate insurance buyers can e-mail the agency directly or click on a link to NSM's home page on the Internet for a staff list and contact information.
"As we worked with VerticalNet as their insurance provider, we came to see the benefits of what the company was doing in building online industrial communities. The concept gives buyers control over the commercial insurance shopping process since they can search for products and service providers directly from their industry Web portal," says NSM chief operating officer Joseph Babin.
"Our original goal was simply to have a presence on the Web, but in the past two years, the prospect of marketing via the Internet has grown into a dominant aspect of our overall business plan. Our Internet marketing is on the way to becoming more effective than our print advertising and direct mail marketing," he says.
Babin says that in response to insurance-related content it provides to VerticalNet for distribution to the various business communities, the agency receives 10 to 20 calls or e-mail information requests per day.
"Most of the requests for information are the result of extended online user sessions in which a viewer spends at least three minutes online with our content or has dug at least three clicks deep into the content," Babin says. "When this occurs, we can be sure that the interest level of the user exceeds that of a general information request. We know they have found something of particular interest."
Babin would not disclose the rate at which the agency can turn leads into customers, but he said that the leads are of particularly high quality, representing qualified insurance buyers with the responsibility for making purchasing decisions.
NSM plans to expand its participation in e-commerce and online insurance sales. The agency has established two subsidiary companies, End to End E-Commerce and Electronic Risk Management, to develop vertical industry insurance portals or "vortals" to market specialty insurance programs to agents and brokers.
"We can see ourselves evolving into a virtual managing general agency providing insurance programs that not only meet the needs of specific commercial niches, but also provide products that would give agents access and value to various business markets," he says.
The next step for NSM and other agencies working with PropertyAndCasualty.com is online application and comparative rating, says PropertyAndCasualty.com's Lawlor. The portal is presently testing a comparative rating system for workers compensation, umbrella liability and businessowners package policies that could be online this spring.
The system, developed by Dallas, Texas-based Insurity Solutions, would allow online corporate buyers to enter underwriting information for a specific risk and coverage and receive a real-time premium quote, including relevant discounts and experience modifications. A test run using workers compensation, for example, calculated manual premium less safety and drug-free workplace credits with experience modification to yield a total estimated policy premium.
The test run included ratings information on the quoting insurer and payment options and allowed for a download of an ACORD form for completion of the application.
Lawlor says the comparative rating system will eventually allow online buyers to shop for a wide range of commercial coverages, including specialty lines such as product recall insurance, and receive quotes from several insurers. The buyers would then be referred to agents in their region who represent the selected insurers.
"The agents will be receiving referrals to clients who may not be buying the coverage online but who will be ready to buy, armed with premium information and terms and an ACORD application. The referrals will be ready to do business with the agent who can then provide more specific advice and counsel to the company.
"A majority of agencies don't have the time and resources to market on the Internet. Agents specialize in providing expertise to their commercial clients and this system will bring the clients to them to do what they do best," Lawlor says. *
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.
For more information ...
PropertyAndCasualty.com, a VerticalNet Community in Horsham, Pennsylvania
Contact Brian Lawlor for advertising and sponsorship information
E-mail: Blawlor@Vertical.Net
Phone: (203) 762-8079
Fax: (203) 762-9520
Contact Dave Willis with editorial and product news
E-mail: Dwillis@Vertical.Net
Fax: (603) 719-7757
©COPYRIGHT: The Rough Notes Magazine, 2000