Insurance.Com -- January 15-16, 1998 -- Insurance Company Structure

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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   ||   New Strategy

Examine how your insurance company's structure may limit new distribution methods and develop strategies to overcome them.

For decades, insurance companies were organized to be successful in an environment quite different from that which exists today. The traditional responses to market opportunity may need to be double-checked, to make sure major opportunities are not being lost inadvertently.

Put your Net marketing strategy in control of people who understand mass media sales and marketing.
The Net is a low-cost interactive mass media in which the global access to content is facilitated by technology. It is not itself a "technology." Its value is in the speed and efficiency of accessing its content and its public appeal. A Net strategy team overweighted with computer or software technicians may not have the needed focus upon public communications, graphic design and customer service. You'd probably not put a TV engineer in charge of devising your television ad campaign, or a telecommunications engineer in charge of your telemarketing strategy. Be sure you've got people who understand communications media and customers in control of the design and implementation of your Net strategy.

Put your Net-facilitated activities in the control of people who know how to take advantage of its special economics and characteristics.
Cutting-edge technology advances may tempt Net application designers to use the latest and "coolest" tools and applications in your Net implementation. The general public, including small businesses, are less likely to be at the cutting edge. Many still have older PCs, or are using slower modems, and think that Shockwave comes from a fighter jet breaking the sound barrier. "Cool" applications may excite your programmer, but mean your application loads like molasses, chokes the buffers on older PCs, and ultimately frustrates potential customers. Keep control of your Net strategy in the hands of those who will know what information needs to get to the eyes of prospects, customers and agents, even the latest tricks are left in the tool kit.

Put your Net implementations in the hands of those aware and agile enough to keep up with the pace of "Web Speed."
The Net, particularly the World Wide Web, is advancing and changing at a pace that may make traditionalists gasp. The accelerating velocity of advances come less from new technology (although that helps) than from the surprising ease of publishing content on the Net and the fundamental economics of networks. Under the theory of network economics, the value of a network is a positive logarithmic function of the number of users. As the growth in the general population creatively using the Web continues to accelerate, and its demographics widens and become more mainstream, it has attracted more publishers, more advertisers and more content, which in turn attracts more users, more advertisers, more content, more users, in a accelerating cycle of postive feedback.
    Recent surveys found that one of the principal reasons consumers are buying PCs this year is not to use word processors, or to play computer games, but simply to "get on the Internet." New entry level computers under the $1000 price mark, and recent hefty investments in WebTV and cable infrastructure will increase the rate of acceleration at which users and content providers move to the Web. Children by the thousands now create and manage their own personal interactive web sites, hosted free by operations like GeoCities and Purple Moon who embrace and encourage the free content in order to create appealing "virtual communities." Besides being entertaining to users, these communities also provide a friendly channel into which their clients can market goods and services. These children see the Web as natural and easy publishing and communications medium to share their thoughts about favorite music groups, put up their digital sketches and musical efforts, and buy and sell TY Beanie Babies globally. Eleven year olds approach the Net as naturally as they approach television, and with a greater sense that they can participate and contribute. Because they can.

Be sure that the people in your company who are responsible for your Net strategy have enough Net experience to know and understand the surprising economic dynamics of the Net. And enough understanding of "regular folks" to know what will and won't work on the street. Because you have only to look around to see the gravely serious competitors with capital, and savvy, and desire, who do have that experience, and that understanding.

Distribution Channels   ||   Effects of Direct Writing  ||   New Strategy