Enhance Web Site Value, Carriers Told

"Most insurance companies are setting up some type of vehicle where the consumer can get information and agent and rating information on the Internet," he noted.

But the savvier companies are providing a self-directed mechanism that allows the consumer to decide how to purchase the coverage, whether it is through an agent, a call center or the Internet, he observed.

Progressive Insurance Company, headquartered in Cleveland, allows auto insurance consumers to visit its Web site "to explore their insurance options," said Toby Alfred, Progressive's Internet site manager. These options include getting quotes and buying online, as well as obtaining names and contact information for up to five local Progressive-authorized independent agents.

"Our guiding principle is to provide consumers with a well-developed, easy-to-use Web site that meets the entire spectrum of their needs," she said. Among other things, "functionality" on progressive.com helps drive business to the independent, authorized agents and allows policyholders to make routine changes to their policies, Ms. Alfred stated.

Progressive acknowledges that most consumers prefer the personalized service and advice of a local agent when shopping for and buying insurance. "We think there will always be a strong demand for this," Ms. Alfred said.

She added that "Progressive is committed to being available anywhere, any time a consumer wants to shop, buy, or obtain information about auto insurance." Progressive also believes that, increasingly, consumers expect this from an insurance company.

State Farm Insurance Companies, headquartered in Bloomington, Ill., can sell its auto insurance product and its renters and condominium unit owner's product in several states through the Internet, said Bob Reiner, director of Enterprise Internet Services.

"Like all other functionality on statefarm.com, we increase it incrementally, first offering it to a few states before providing it for all our customers," he said.

Each policy comes with the "added value" of a State Farm agent, Mr. Reiner noted. Even customers who buy insurance online can contact a local person if they have further questions.

According to Mr. Reiner, State Farm does not plan to change its strategic direction. "The agent remains the center of our sales and service focus, and the Internet is becoming an effective extension of our agents' office, which offers an additional contact point for customer convenience," he said.

Nationwide Insurance Sales Company, based in Columbus, Ohio, allows its customers and prospects to obtain auto insurance quotes through the Internet, over the phone or through an agent, said Lisa M. Price, manager, marketing and communications. In this way, customers can "manage their insurance anytime, anywhere, any way they want," she stated.

The Nationwide Insurance Internet offerings include a three-minute Quick Quote in real time and a personalized quote that can be bound or purchased online in real-time, the company said.

Throughout the quote process, an "Agent Locator" tool gives the user the option of contacting a local agent or a toll-free call center for more information, sales or services, Ms. Price stated.

"Nationwide uses the Internet as an extension of the local agent," said Sue McManus, marketing and usability director for Nationwide. "We're finding that consumers are still seeking the contact of a local agent for advice and, in most instances, to close the insurance sale," she stated.

Nationwide also said that its "most noteworthy successes in the past year" were in its online self-services.

Through the "MyNationwide" self-service tool, most Nationwide policyholders can view their bills, pay them with a credit card, and print their billing history online, Ms. McManus said.

Nationwide said it plans to continue enhancing the online self-services for use by its policyholders and agents.

For the past 12 months, Esurance, a direct-to-consumer auto insurance provider based in San Francisco, has averaged more than 10 percent month-over-month new-customer growth, according to Megan Hanley, director of marketing. Esurance is licensed in 27 states.

Because its business is predominantly online, Esurance is able to analyze results and immediately adjust its marketing strategy, product positioning, pricing and user interface to best meet the needs of its target customers, Ms. Hanley said.

But Esurance also allows customers to speak with a customer service representative at any point in the quote or purchase process, 24 hours a day, seven days a week, Ms. Hanley noted.

Overall, Esurance expects more insurer movement toward direct online sales. Ms. Hanley noted, for example, that Forrester Research has estimated that more than 5 percent of the U.S. population searched for auto insurance online in 2001, and that by 2005, more than 20 percent will do so.

Ms. Haley believes that much of this business will come from people who are comfortable with and looking for direct writers, instead of agents.

Mr. Devine believes that the more astute insurers "are leveraging the technology to better squeeze costs outreduce interaction costsand enhance customer service delivery."

While the number of consumers purchasing insurance online will likely grow above 1 percent, he doubts the figure will reach 15 percent in five years, as predicted in some quarters.

"That would be more than the direct-response number after 25 years of call centers being an effective [if gradual] means to deliver insurance," he noted.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, July 1, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.