E-Commerce
Technology
ffective
Maintaining an outdated
Web Site is no way to attract
today's customers.
by Kevin Roper
O
ver the past IS years, insur-
ance companies have made
considerabie investments in
tlicir Web sites and e-business infra-
slructure. Many of those carriers that
have continued to invest in and fine-
tune their Internet strategy are recog-
nized as industry' leaders,
Unibrtunately, a iarge number of car-
riers have viewed tlicir initial investment
in the Internet as a necessary evil and
don't luiderstand that an effective e-busi-
ness strateg\' can mean the difference
between Ix'coming a leader and stnig-
glii^ to keep up witli the competiti(,)n.
Tlie Internet has had a significan!
ijiipact on how companies do business
in all vertical markets, including the
insiinince market. How^ever, when ci)m-
pared to other industries, companies
in the insurance and broader ßnancial
ser\ ices markets have not maximized e-
business opportiuiitics as extensively.
Despite the perceived complexity of
insunince prcKlucts. some of the more
highK' \isible insurers have successfully
invested in their Internet strategy in
order to close more business and gn,)w
llicir premiums. Examples include Ciei-
cc) :uid Prx;^^ssive. which both use the
Contributor Kevin Roper is Presi-
dent of DSLRoper Associates. He can
be reached at Kevin@dslroper.com.
strategy
Internet as an additional sales chaiinrl
for their products.These companies
focus primarily on auto insurance, a less
complex product to sell :uid one that s
easier for consumers to undersuuid.
Still, the Internet s most significant
impact has been improving commu-
nications and facilitating education
with sales agents and policyholders,
Ba.sic tools such as e-mail, as well as
more sophisticated IT applications
such as Internet portal connection to
back-office administrative functions,
give b(ith agents and |X)iic>holders tlie
ability to researdi. purciiase, administer
and tnick insurance transactions. These
steps improve ttie customer experience
througli ease-of-use and help differentiate
one carrier from the rest of tlie crowd.
While self-service has become
the rage, carriers have not always
appn)ached this goal in the most effec-
tive manner. Many carriers simply
opened up their existing internal sys-
tems to agents and policy holders. Wliile
pR)viding more functionalit)- to users,
these applications weren't designed for
a broader external audience.
Also, carriers sometimes think self-
service means elimination of adminis-
trative positions. Self-sen'ice generally
yields operating efficiencies, but it is
shortsighted for companies to view it
primarily as a means to reduce staff.
• The Situation: The Internet has
grown into a game-changing marketing
ioot with vast potential.
• The News: Many insurers neglect
their Web sites, losing valuable sales and
branding opportunities.
^ The Upshot: Even a basic updating
of an existing Web page can yield
immediate results.
Agents and policyholders stiU need to
talk to someone if Web-based services
don t resolve their specific problems.
Speaking from the distribution-chan-
nel side of the industry-, Ralph Pence,
managing partner tor Executive Cx>m-
pensation Concepts LLC, said tlie best
iasurance portals include both exten-
sive self-service options and the ability
to 'bail-t)ut' to a live support representa-
tive when required. (Xir agents and cus-
tomers need to be able to talk tt) a live
person when tliey need an answer."
Ante Up
When instirance companies began
investing in their Web sites and por-
tals in the 1990s, some chief execu-
tives perceived it as a necessary
evil—the ante required to stay in the
insunmce game—aiid this attitude has
not changed. As a result, numerous
insurance compamy Web sites have not
BESTS REVIFff • SEPTEMBER 2tK)8 1O7
E-Commerce
Technology
changed dramatically since they were
first launched back in tlie '90s.
lliese companies have pasted new
links und fiinctionality to their Web sites
but have not addressed or revised their
overall designs or e-business strategies
to l^etter address customer needs,They
need to review their e-business pres-
ence and consider:
• llieir corjx)nite business strategy
• Tlieir business processes
• Available new technology
• The Internet sophistication and
needs of their agents and polic-\ holders
Tliis last item is the mt>st critical. Bob
Bordeman. CEO of Safeway Insunmce,
said that "by listening to our custom-
ers, we decided ti> adopt a more holistic
approach to enhancing our Web sites,
developing more user-friendly Web sites
:uid pnxlucer interfaces radier th;ui con-
tinuing to patdi together new ñinctional-
ity onto the existing sites."
Typically, insurers call upon third
parties that keep current on recent
Internet industry trends and capabili-
ties. Shannon MargoUs. an insurance
industry e-commerce specialist for
DeHayes Consulting of Roseville, Calif.,
said "dramatic ad\ancenieiits [are] t:ik-
ing place in Internet tools and technol-
og)^ and how compimies employ these
tools and technolog)' to impnive their
competitive position. The challenge is
finding a techn<jlogy partner who both
keeps current on tlie adv:uices in inter-
net technology and understands the
insurance industry',"
Insunuice customers have changed,
too. Since tlie Internet was introduced,
a new generation of insurance consum-
ers has entered the market: young, tech-
nically savvy individuals who would
rather do their research MKI purchases
on the Web than with a live agent.
To attract this new demographic,
companies need a brcïad, online range
of self-.service product offerings. The
increase in tecIinicaUy savvy cust(imers
is forcing agents imd brokers to convert
their traditional, labor intensi\e areas of
sales, policy administration and claims
processing to Web-based applications.
C^arriers wishing to maintain close
relationships with these agents and
brokers liave to find new and creative
ways to provide additional Web-based
lOS BEST s REVIEW • SEPTEMBER 2 0 0 8
Why Web Sites Fail
Forrester Research evaluated, then flunked,
97% of more than 1,000 corporate Web
sites last year, due to common mistakes
that fall into four categories:
Value: Firms copied bells and whistles from competitors' Web pages
that didn't help customers find meaningful information.
Navigation: Companies designed unclear or repetitive menus with
categories that weren't succinct or mutually exclusive.
Presentation: Most Web sites were difficult to read and understand.
Chief complaint: shoe-horning too much information into too small
a place.
Trust: Many sites didn't call attention to a company's privacy policy
regarding Web-based transactions.
Source: Forrester Research
services to their distribution channels tionally. Carriers should also address the
and policyholders. increasing mobility of their customers.
Today's sites must allow PDA access
Out With the Old so that agents and customers can get
LInfbrtiuiately, a lot of companies con- answers anytime :md anywhere.
tinue to simpl)' place additional iunction- Obviously, the Internet game has
ality onto their old Web sites rather than changed over the years. Insurers must
conduct a more thorough review of their recognize how rapidly the Internet is
requirements. Insurers' Web site needs clianging the way insurers do business.
are continually changing, and strategies Whether through their in-house ana-
aiul designs need to ch:uige :LS well. lysts or by retaining outside experts,
Some of these clianges can be iairiy insurers need to track developments in
simple to implement—such as mak- insurance e-commerce and assess:
ing sure there is a se;ux:h capability on • Tlie appropriateness and effective-
the home page to make site navigation ness of their e-business strategy
easier A surprising number of insur- • The changing Internet needs
ance company licime pages don t have of their customers and distribution
Ulis basic "self^rvice ' fimction. Other channels
changes, sueh as focusing on lead gen- • T h e effectiveness of tracking,
eration, take time to understand and rej-wirting and responding to the grow-
design into the Web site. ing amount oí information tiieir Web
Web sites tliat are interesting to visit site and ¡mortal can provide
are usually more effective. Site design • How their e-business strategj' and
should incorporate such things as mul- execufion compares to other successful
timedia (audio, video and company players in the industry
commercials) and grapliics to stimulate Most importantly, insurance compa-
interest. In order to promote greater nies need to listen to their customers
ease of use. companies should make and understand not only their current
sure that real-time personal support, needs but anticipate their ñittirc needs.
either online or by phone, is readily An e-business strategy developed 15,10
available diniugliout the site. or even five years ago is no longer rel-
Carriers also should look at the evant, given the chimges in technology
demi)graphics of their audience. Englisli ;ind market demographics.
may not be the primary language of A routine and thorough review of
their customers. Incorporating language e-business strategy and how it is ijiiple-
translation functionality' into a Web site mented will ensure that insurance
is a c(5st-eftèctive way to grow insurance companies remain competitive in this
markets both domestically and interna- new game. DO