Insurance.Com -- January 15-16, 1998 -- New Strategy for Distribution

Previous Materials
by Doug Simpson

Net Nuggets: www.oocities.org/wallstreet/5175

Business
on the Net: 97
(10/97)

Business
on the Net: 96

Cyberlife

Distribution Channels   ||   Effects of Direct Writing   ||   Company Structure

Determine your new strategy for distribution and interaction with agents and brokers.

Just as agents need to be "Net Ready" or "plug and play" to compete in the Net world, companies need to be equally ready to interface with their agents' and customers' Net applications.

The Accelerating Rate of Change
In January 1997, Nicholas Negroponte and Catherine Bateson, the noted anthropologist, appeared on a panel with other notables in Hartford, as reported by one attendee in "Cyberlife". Asked by Michael Kinsley whether the elder portion of our population is being left behind by the Internet developments, Negroponte and Bateson agreed that the young and the elders seemed to be keeping up well with the development of the Net. It was the middle group, those in the prime of their careers and family responsibilities, that were falling behind in awareness, because many of them did not take the time to explore and gain awareness of the Net's capabilities.
    College students and hobbyists worldwide study and build and extend the Net using fast university connections and high-speed workstations on which they practice the tricks that only the Web can perform. Robin Williams and Rosie O'Donnell discuss the relative attractions of web sites on afternoon TV shows. Netizens of all ages see the convenience and speed of getting information, buying socks and stocks on the Net, and moving large chunks of complex information around the world in moments. Free. Those people are going to expect the same speed of response and quality of presentation from their insurance company or agent, and will be mystified if they find a poorly designed or a clumsy site so slow to load that it brings their PC to its virtual knees. They are going to be mystified if it takes weeks to prepare and deliver a standard auto or homeowners policy, when they can get so much material of greater complexity instantly, day or night, over the Net.
    Observe the rate at which information and transaction services that didn't even exist before the Web was invented a few years ago ... Yahoo, Lycos, Excite, Amazon.com and others ... have sprouted into the public consciousness like Jack's magic beanstalk. And have come to be a significant economic factor. And a significant competitor for advertising and service dollars.

Service Centers: Net Support for Local Agents
In the middle ground of "small commercial" coverages, a layer of assistance has developed that is ripe for enhancement with Internet technologies. Because of the flexibility and efficiency offered by Internet technologies, they offer new opportunities to enhance the marketing channel of both direct marketers and agency marketers.
    For example, the success of direct writing by mail and telephone has motivated agency companies to offer their agents direct after-sale customer service using mail or telephone, in centralized service centers staffed and managed by company employees. These back-office services are designed to enhance the ongoing relationship between the selling agent and her customer. These services allow local agents to reduce the capital investment that they make in "back office" resources and free them to concentrate management resources on new customer development and sales.
    Internet media capabilities greatly enhance the ability of these insurance company service centers, staffed by company employees or operated under contract with specialized teleservice companies. Such centers can use online Q&A techniques to provide answers to routine coverage questions, to fulfill requests for endorsements or certificates, to address routine billing inquiries, and to handle the initial reporting of routine claims. These Net-facilitated service centers can be structured to operate as "transparent" branded" operations, speaking to customers in the name and style of the agent being supported. By centralizing these "Net Service Centers" and equiping them with the latest in teleservice equipment, computer support, efficient processes and trained staff, insurance companies and customer support teleservices companies can leverage the economies of scale and networks unavailable to a small local agent. Together, the agent and the company can provide a high level of service at a lower cost than the local agent could have provided it, all for a commensurate concession of commission.
    Sales support and customer service facilities now have a new technology which expands the potential offering of services, in ways still being explored. Internet communications technologies include the capacity for providing user-generated forms and inquiries, for organizing and retrieving answers to more complex questions, even facilities for providing pre-recorded informational presentations using streaming audio and video downloaded in background over the vertical blanking interval, even "on demand" Voice Over Internet phone pick-up. As bandwidth expands with the increasing implementation of cable modem access, consumers will gain increasing access to interactive, real time video feeds to provide sales presentations, explain features, and create a "virtual presence" on the Net for customers and prospects through individual enterprise-to-home video conferencing.
    All of these technologies are rapidly developing, as the advances in local processing power, network technology, bandwidth and multi-media applications reinforce and multiply each others' effectiveness. All of these developments and methods are familiar to those in the fields of technology and new media. They are rapidly becoming more familiar to many in the traditional insurance field and to the general public.

Distribution Channels   ||   Effects of Direct Writing  ||   Company Structure