The Tangled Webs They Weave

To the Test

Gomez (www.gomez.com), an Internet quality management firm, has been measuring the success of insurance Web sites for the last two years. It recently released the fifth of its semi-annual insurance scorecards and Progressive was named the top insurance Web site for the fifth straight time.

Greg Davies, a senior analyst in the financial services group for Gomez, said the insurance scorecard has a set of 300 data points. The company visits hundreds of Web sites, opening accounts, transacting, making customer service contacts, and monitoring the site every few minutes of the day. Rather than accept what a company claims it can do on its Web site, Gomez follows through to see firsthand howand whetherit really works.

Progressives Web team has consistently demonstrated its leadership on the Web. They have made a whole-hearted embrace of the Internet, Davies said. They give consumers a choice to do what they want to do. Although he points out that automobile insurance isnt terribly complicated, Progressive has a lack of channel conflict.

An important focus for some insurers is to make their Web site navigable for its agency force. But Gomez doesnt focus on that angle. We do our evaluations from the perspective of the consumer, Davies said. Does this site do a range of things well? The Web sites that do well in our scorecard focus on the needs of the usersthey have a customer centric approach.

For the most recent scorecard, Davies said Gomezs research indicated that there is a continued commitment to e-commerce, despite the overall slowdown in the pace of innovation by the insurance industry. This commitment will need to continue if insurance carriers intend to meet expectations set by the Web offerings of other financial services leaders, he explained.

One of the areas that Gomez focuses on is ease of use. Davies believes insurers must improve in this area simply because most insurance Web sites have an enormous abandonment rateparticularly when it comes to getting a quote or purchasing a policy. He estimated that half of the potential customers who log onto an insurance site left before getting the information they wanted.

Information has to be at the point of need, Davies said. You have to have definitions and tools available to identify the appropriate level of coverage.

Here, too, Progressive ranked No. 1 in the Gomez scorecard. Factors Gomez considered included general functionality, simplicity in opening an account or conducting a transaction, consistency of design and navigation, and integrating data to provide efficient access to information needed by consumers.

Progressive: Written so customers can understand it.

Toby Alfred, Internet site manager for Progressive (www.progressive.com), said ease of use is imperative for a company that sells as much insurance on the Web as Progressive does. (The company does not disclose its Internet sales.) You have to help the consumers so they know where to go on your site, she said. We also answer questions in plain English, and the definitions and other information are written so customers can understand it.

Alfred said automobile policies are the ideal product to sell on the Internet. Its an automated product, so there is no underwriter behind the scenes, she said. The system figures the rates and asks the right questions to determine any discounts.

Progressives Web site technology was developed by the companys own IT department, meaning that customization was easy and costs were kept low.

Selling policies over the Internet is one way Progressive stands out from its competition, but the company uses the Web as just one of three options for purchasing a policy, even when the initial contact comes through the Web site. Customers can use the Progressive call center or, when entering their ZIP code, will get a list of Progressive agents in their area. We have equal channel representation, Alfred said. Selling policies is the important thing for customers, she said, not the channel. Part of our strategy focuses on the customer buying a policy how, when, and where the customer wants to buy it.

Progressive has received a lot of attention because of its willingness to show the rates of its competitors when customers ask for a quote. While competitors may doubt the veracity of what Progressives customers receive, Alfred said the company does try to present the best possible comparison. We reverse engineer the process to make sure they are accurate, Alfred said, relying on a companys filings in a particular state through the department of insurance.

Gomez rated Progressive No. 2 in the relationship services category. Companies build customer loyalty by enabling them to make service requests and inquiries online. The customer is able to do most things online [to service] their policy, Alfred said. The most common change is replacing a vehicle on a policy; changes of address and the ability to make payments online are also important to consumers. Its all about convenience, Alfred said. No mail is needed and it is easier for both the customer and us.

Alfred claims that one of the reasons Progressive has a successful Web site is because its not static. Things change on the site every day, she said. Were always looking at ways we can ask questions better of the customer. We get e-mails from our customers suggesting changes as well.

In addition to personal auto, Progressive customers can also purchase motorcycle and watercraft coverage online. The companys recreational vehicle and business auto policies are not sold online, but quotes are available.

Allstate: We try to follow what we believe are the customers desires.

Allstate rated a close second to Progressive with its Web site (www.allstate.com). Theyve made an enormous commitment, Davies said. One of the areas that will make Allstate stand out in the future is its commitment to the entire financial services package: With its own online bank, Allstate can attract and retaincustomers through the sheer variety of its offerings.

This foray may provide opportunities for increased cross promotion of insurance products, Davies said.

Jeff Lewis, vice president direct distribution for Allstate, acknowledges that there are fewer reasons to visit an insurance Web site than one for a bank or brokerage, where consumers are more likely to be tracking their investments. Still, visits to the Allstate site have been growing at an enormous rateup 33 percent in 2001 to 12 million discreet viewers, according to Lewis. But it wasnt a surprise. That was very close to what we had planned for this year, he said.

As with Progressive, the Internet is one of three sales channels that make up what Allstate calls its Good Hands Network. Policies can be purchased online, customers can be referred to a call center, and an agent locator on the Web site will direct potential customers to a local office. But convincing agents that the ability to purchase policies on the Internet is not a bad thing can be dicey. For the most part, the agents see the value of having a robust Internet site, Lewis said. The agent locator is a great tool.

The Allstate site was developed internally with limited outside help. Lewis said the staff is relatively small and is divided into three teams: content, financial services, and revenue opportunities.

The key to any success is the companys desire to understand its customers. We try to follow what we believe are the customers desires, Lewis said. Some of those desires involve reporting a loss, following a claim, and paying their bills.

Much of the companys efforts over the last few years have been aimed at getting licensed in different states. The first license came in May 1999 and today Allstae is licensed to sell in 30 states. The others could follow, but Lewis said those 30 states make up 90 percent of the U.S. population, so the bulk of the work has been completed. Each state is different, Lewis said. Youve got to get the business rules right.

Amica: We look at content and functionality from the customers standpoint.

Davies said Gomez was impressed with the gains made by Amica, the Rhode Island-based personal lines and life insurer. The company moved up to the No. 4 position overall and was No. 1 for life insurance buyers in the customer profile. Its Web site (www.amica.com) offers instant online quotes as well as a password-protected interface for viewing policies and making premium payments.

Amica is really focused on customer service, Davies said. They are doing some things the big guns are looking at. Gomez isnt the only one recognizing that fact. For the second year in a row, Amica ranked highest in the J.D. Power and Associates National Automotive Insurance Satisfaction Study.

Craig Phelps is a communications officer for Amica. (The companys Web site falls under the direction of the corporate communications department.) The site is customer-service driven, Phelps said. We continually look at content and functionality from the customers standpoint.

Amica is a direct writer, so its organizational structure allows it to be proactive. We can implement new technology and quickly grab a functionality to help the customer out, Phelps said.

The quoting engine gives rates for auto, home, and term life products. With no sales functionality, Internet requests are turned over to its call center for a return call within 48 hours. We can put a local spin to it with 42 branch offices, Phelps said.

The Whys and Wherefores

Davies said customer confidence is an important factor in insurance Web sites. The primary factor is how reliable the Web site is, he said. Will the page load if I hit Submit? Privacy and security are also important to customer confidence.

The debate over customer confidence can sometimes fall into two sides: pro-agent or pro-Internet sales. You can argue until youre blue in the face on that one, Davies said.

The truth is that Internet sales have not met with early predictions, but Davies points out that doesnt mean the Internet doesnt affect sales. Twenty-five percent of active online U.S. users turn to the Web for information, and 73 percent of those people request quotes.

He compares the Internet in insurance to the ATM in bankingconsumers were slow to embrace bank machines, but theyve achieved a slow measured growth, according to Davies. Insurers have numerous opportunities to use agents, but to say agents are the only way to go is incorrect. I think you need to look at the Internet as a work in progress. It doesnt compare favorably to online brokerages, but it is picking up.

Personal auto is the biggest draw for active online users; 28 percent of those going online for insurance looking to insure their carsthats three times more than health insurance, which is in second place at 9.1 percent. Homeowners comes in third at 8.3 percent and term life is fourth at 8.1 percent. Activity is quite a bit less on the life side, Davies said. Its almost exclusively term life.

The Internet can also level the playing field for smaller or regional insurers. From a technology standpoint, the little guys can compete with the big insurers. The question is whether the consumer finds them.