Insurance.com: Notes : Sevarini

Using Ecommerce to Gain an Advantage

Ralph Sevarini

Business Development Manager,
Sun Microsystems

Ralph Sevarini of Sun pointed to the Forrester study that saw the Net as the "Fourth Channel" following in the prior path of newspapers, radio and television. Like the three channels before it, Ralph saw the Net as going through an "S Curve" of development, of which it was now only beginning the stage of explosive growth. Referencing Tapscott's Paradigm Shift, Sevarini sees us now entering the Network Age, in which it is imperative for business to:
    1. build new products;
    2. get them out faster; and
    3. build new distribution channels.

Pointing to Michael Porter's "Model of Five Forces," Sevarini saw the current insurance industry competors not only threatened by internal mergers & acquisition trends, but also by pressure from:
    1. Potential entrants (banks, brokers);
    2. Customers associations and captives;
    3. Suppliers and brokers;
    4. Substitutes (e.g. Quicken)

Sevarini pointed to the dramatically lower costs of online banking (8 cents per transaction), compared to teller ($1.12) or phone (35 cents) as evidence of the cost savings of electronic financial services. He pointed to the rapid growth in online trading accounts as proof the public was ready for electronic financial services.