Over the last few years weve seen boon to bust in the e-commerce marketplace. If IT executives were asked three or four years ago in the middle of the bubble hype in what direction e-commerce would be heading, a lot of executives felt they had to make e-commerce bets just because there were some very rosy projections out there. Now, its clear e-commerce, like anything else, has to provide bottom-line added value to the business.
Bruce W. Arbonies is vice president in the eBusiness Development Group at Prudential Financial. His responsibilities include coordinating life, property/ casualty, and long-term care insurance content and functionality on the companys Web site (www.prudential.com) and Prudential Financials client sites.
Arbonies joined Prudential in 1977 and has worked in the agency sales channel, supporting sales illustrations and field technology, including the companys innovative LaunchPad program, which equipped all of Prudentials insurance agents with laptop computers and business software.
Arbonies later transferred to a centralized marketing area, responsible for field technology and supporting the initial public Internet site. He also worked in the Individual Life Insurance unit as a key player in building out Prudential Online Account Access Service, the client service site primarily dedicated to agency sales channel customers, and promoting the use of Internet conferencing tools such as Placeware and IBMs Sametime.
As we head into 2003, e-commerce in the insurance industry continues to be a work in progress. Arbonies discusses below the future of e-comm as he sees it, online technologies, and where Prudential fits into the big scheme of things.
Tech Decisions: What do you see happening in insurance e-commerce in the coming year?
Arbonies: Theres a lot of attention in the industryand Prudential Financial has gone through some of this as wellon developing functionality to support the producer, to make doing business with the various companies easier for captive and third-party producers. And we get back to standards and data passage between organizationsin our case Prudential and different third-party groups involved in selling our products. From the companys perspective, there are potential cost savings involved. But one of the key benefits or expectations is if you are easier to do business with youll be able to attract more business. And thats really true whether its a captive agency force or a third-party group. So, I think there is still going to be more activity around how to facilitate the overall business process and the online service, and functionality is a piece of that.
Tech Decisions: Is XML technology the answer for e-commerce?
Arbonies: We cant really tell if it is going to be the ultimate answer, but certainly its in the right direction. Anything to relieve maintenance costs and improve reusability over time is going to be a critical part of any systems development, including e-commerce. One of the big pushes inside Prudential is to build infrastructure components that can be reused, whether its an online system, an IVR, or an administration system. Creating objects in a reusable XML seems to play well into that over time. I do want to make a push for the ACORD XML standards. Prudential is an active participant in that.
Tech Decisions: Will more companies be turning toward the ACORD XML standards, or will they continue to develop proprietary standards?
Arbonies: Certainly over the mid-term (and who can really project much past that?) there will be some proprietary holdouts, if you will. And frankly, the ACORD standard wont be as broad as wed like it to be. So even though companies adhere to the standard, there is still going to be data that falls outside this standard. You might call that proprietary. From Prudentials perspective, we think the ACORD standard is an important horse to back, and we expect the user population to expand.
Tech Decisions: Why isnt the ACORD XML standard broad enough?
Arbonies: Like anything else, you start with core information on customers, and then as companies get more involved in looking at the types of benefits, features, and related service transactions the various products have, plus all of the new business and commission data, some of those elements fall outside the radar scope, at least initially. And many companies and producer groups dont use the standard.
Tech Decisions: On the life insurance side, where is the push for Prudential in e-commerce?
Arbonies: There is a strong sense of how we can provide customers the ability to get information online and to execute high-volume transactions online. From the individual life perspective, were talking about address change, phone number change, beneficiary changethe types of transactions that have a high frequency of incidence for our service centers.
Tech Decisions: Where do the agents fit in with this e-commerce strategy?
Arbonies: Some of this is frankly being discussed right now. We do find about 25 percent of our calls into the call centers are from producers. So, while we make self-service functionality available to our customers online, were also making that available to agents online. Interestingly, there may be other ways to address servicing through agents that go beyond just online service. There is some activity now to investigate speech recognition as far as agents are concerned. Thats a more natural interaction technology for them.
Tech Decisions: Are life insurers going to increase funding in e-commerce?
Arbonies: Prudential is a large company with many different segments, and the answer differs depending on which segment it is you are talking about. I think overall budgets are declining, in part because we are no longer paying bubble compensationtheres a natural tendency to pay less now than you would have had to pay for the same amount of work, say, three years ago. Aside from that, once the high-volume and critical-transaction self-service functionalities are out there, the budget to support e-commerce will naturally go down. I think in many instances were in that phase right now. However, our property/casualty group actually has a substantial budget, as they are interested in building out online functionality more aggressively.
Tech Decisions: Does Prudential sell life insurance online?
Arbonies: We dont sell online, but we have quoting online, which generates leads, and those leads are handed off to our agency force.
Tech Decisions: Are the agents the reason Prudential doesnt sell online, or is it because a good way to sell life insurance online has yet to be discovered?
Arbonies: To be an aggressive player in the online sales business you would have to build a separate product. Prudential, certainly at this point, is not interested. We think we have competitively priced products, and thats why were quoting online. We also have a commitment to the face-to-face model. From a life insurance perspective, were not looking at a direct online sales process. Our property/casualty side is looking at that at this point. The key thing there is its a demand product that people need to buy regularly.
Tech Decisions: What are you doing to enhance your online relationship with agents?
Arbonies: Prudentials agents have access to all sorts of information at their fingertips, whether its on their PC, in a client management system, or new business status. Its all available through what we call our Launch Pad, which is a laptop that has access to a lot of different types of information. We have an extensive intranet site with all sorts of information and software available to support agent sales of a variety of products, and more enhancements will be delivered in 2003.
Tech Decisions: Has the insurance industry gone as far as it can in initiating e-commerce, or is it now up to the consumer to take the next step?
Arbonies: The sense I get is most organizations are interested in building support for high-volume, self-service functionality, and they are in the process of doing that or wrapping it up. Frankly, it really is up to the consumer to take the next step. We need to see a higher volume of usage by the consumer. For example, Prudential has over 250,000 customers on the client sitethat includes our life insurance customers and many of our Prudential investment customerswho are registered online. We launched this site officially in March 2000, and while thats a fairly sizeable number, its not a million, and Prudential has millions of customers. So the demand wasnt quite what we expected. One of the things incumbent on us is doing a better job of driving customers to the site. Thats an important activity for us over the next few years.
Tech Decisions: You said it was up to the consumer to take the next step in e-commerce. What are a couple of things that consumers have to do? Or is this about issues such as bandwidth and Internet service providers?
Arbonies: From a parochial (Prudential Financial) point of view, we need to get more of our life insurance customers registered for our online service before we build out substantially more functionality. Customers typically dont think about accessing information about their life insurance policies online as often as they do for consumer goods or even other financial services like banking or investments. We need to do a better job of promoting the value of our online account access functionality to our life insurance customers.
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.