I'll admit it: I am a geek. I've always been a geek and I have been in love with technology for as long as I can remember. I was the cause of many minor and not so minor explosions in and around my neighborhood in my youth. That was back in the days when the scientific supply houses would sell a 12-year-old sulfuric acid and all those other fun things that didn't come with your A.C. Gilbert chemistry set. (The only thing they finally balked on was liquid nitrogen-and they would have let me have that if I had a more suitable container than my father's coffee thermos). As a teenager I made model rockets in the days before you could purchase kits or rocket engines. I made my own solid fuel engines and built rockets that hit altitudes of thousands of feet. I ripped apart old television sets and built radios and a primitive Turing machine using vacuum tube technology.

Computers and software were just a natural step for me. Today I'm wired and connected 24/7 with laptops, workstations, pagers, cellular devices, PDAs, and servers everywhere I look.

Using technology for technology's sake can certainly be fun, but it's probably bad business. If you take a look at the insurance and financial services industry, you can see where technology makes sense...and where it doesn't.

A few years ago I heard a very senior VP of a Fortune 1000 company say, "We must be on the Internet. In three years I want every part of our business to be doing business on the Internet."

Someone who doesn't understand technology typically makes that kind of statement. If you understand technology you understand that it is only a tool that can be used to enhance existing business processes and create new ones, but that by itself has no intrinsic value. The gentleman above should have said something like: "Companies and individuals are able to communicate using computers over standardized wide-area networks. Let's see how that technology can improve the way we do business."

Smart businessmen (and women) didn't get wrapped up in all the USA Today and Time magazine Internet hype. Instead, they explored ways they could use Internet technology to improve the bottom line. Let's look at a few ways that the Internet should be used and not used in our industry.

Internet B2C-Consumer Sales?

We have all, to some extent, been fascinated with the incredible wealth generated by a few successful Internet companies. The original successes of the Amazons and Yahoos of this world led us all to contemplate selling our products on the Web. There have been a number of attempts to sell insurance to individual consumers on the Internet. Some firms gathered quotes from various carriers then passed any interested consumers on to those carriers. Some carriers have created their own online quotation and selling systems.

Ultimately, though, we are in an industry that sells services, not commodities. With the possible exception of some personal property and casualty lines and term life insurance, we sell products and services that crave the human touch. If we attempt to remove the human intermediary from our contact with the customer, we have lost the opportunity to distinguish ourselves from each other. If the only distinction we are able to make is price, we have lost the ability to market ourselves effectively.

That's one reason why the majority of insurance and financial services products will not be sold online. The second reason is expertise. If I want to structure a financial package that will provide for my retirement years as well as my wife's, leave enough money to pay for my grandchildren's college, and provide for the possibility of long term care (and maybe factor in some changes in the tax law), then maybe I need an expert. And that expert will be a person who can shake my hand and pat my back and assure me that I have the best possible package.

This doesn't mean that the Internet has no value in a B2C relationship for our industry. What it does mean is that the value is not in the sale, but after the sale. Once I have established my relationship with an insurance company, I want the ability to go online anytime I want and see the cash value of my whole life policy, or the present value of my annuity, or what effects the latest tax changes have on my grandchildren's trust. In short, use the Internet to touch your customer, but touch him with information-don't expect him to make buying decisions online.

Every company should have an extensive, easy-to-navigate Web site that allows the public to explore who you are and what services you offers. You need to provide that customer or customer-to-be with a number of options for initiating a conversation. You need to have Web forms customers can fill out to request information. You need to have e-mail addresses for customers who want to submit a more detailed request. You need to have well staffed CSR units answering the phones. You need to have mailing addresses for the Luddites out there.

The important thing, though, is timely response to all of the above. If you accept messages from your Web site, you must respond within 24 hours (ideally eight) or you'll have lost that customer. Don't make the mistake of offering some sort of online service and then have your customer wait days for a response; people have been conditioned to expect quick responses on the Internet. Don't disappoint them.

Above all, do not give the impression that you are actually selling a policy online when it really has to go to underwriting for two weeks. Internet users are a fairly savvy lot-and they are impatient. If you are only collecting information for a possible future sale, tell them upfront.

We all know you need to have a Web presence today, in this marketplace. But that Web presence needs to be useful to the customer-not useful to you. It must be easy to navigate and provide some value or information to the customer. Use technology to inform your customers; use people to sell.

Intranets

Intranets provide some of the best value in today's business world. Our businesses run on information, and a well-designed corporate intranet is the key to properly collecting and disseminating that information. "President" Bush's tax relief plan hit us all quicker than we anticipated. Firms with good internal systems were able to quickly get the relevant information out to all necessary parties, including financial planners and consumers.

Most well designed intranets are able to integrate information from all over the enterprise. That means the guys in compliance were able to create new letters and illustration forms based on the tax revisions and post them to one central location. That, in turn, meant that the entire enterprise was up to date and compliant at the same time.

Standard reference works and policy manuals were also placed online so all personnel have immediate access to the same information. It makes no sense to go to a physical corporate library for a standard reference work when it could be available online. Keeping key documents and publications on the intranet also has the advantage of allowing for instant universal updating of those documents when necessary.

Intranets are, of course, used for collaborating on documents and projects, e-mail, internal discussion groups, and for providing access to proprietary tools and calculators. With all of the major players from Sun to Microsoft launching Web services initiatives, the corporate intranet running HTTP over TCP/IP will replace legacy client server and newer multi-tiered applications.

Intranets can also be used for internal training. Streaming technologies make it possible for short, effective training pieces to be delivered throughout the enterprise. Using live trainers to train customer service units can be expensive, not only in the expense of the trainer, but also in terms of lost productivity. Placing a "required" streaming media training piece on the corporate intranet may be an attractive alternative.

The uses for internal networks are virtually limitless. They are relatively inexpensive to create and maintain and they provide a degree of control and standardization throughout the enterprise. I can think of no other method that provides a better return on investment.

STP -- Straight Through Processing

Our industry has been struggling for years to find effective single entry processing systems. SEMCI has often been accused of being dead, but in reality has just been playing possum. New technologies involving XML, multi-tiered architectures, and now Web services have made single-entry, straight-through processing a virtual reality (pun intended). We can now use integrated systems that allow information collected in the field on a PDA or laptop flow through an agency system to the home office to the mainframe using existing networks and internetworks. Use the technology here to automate your internal processes. Machine time is a lot cheaper than human time-and a lot more accurate.

Let people do what people do best: interacting with other people. Keep the personal touch if you want to keep your customers. Let machines do what machines do best-manipulating data. Let these two seemingly disparate "systems" touch each other where it makes sense-and only there.

USAA is one of the most technology advanced insurance and financial services companies around. As far as I know, it is the only paperless player in the business. Yet when it comes time to change a policy-or make a claim-you talk to a person at USAA. And that person provides the service we crave and are ultimately paying for. Without the personal touch we're doing nothing more than selling commodities-and the margins on commodities are pretty slim.

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