Net Can Yield Competitive Advantage

In this article, well outline a solution developed for business casualty insurance, a quintessential custom undertaking. Business insurance, like personal insurance, is most often bought from a local, well-known broker because of relationships, accessibility to advice and fear of making a mistake.

A company has two choices in the quest for competitive advantage over others:

Reduce the cost of sales by delivering product directly to customersthe classic Internet model of Amazon and eBay.

Improve the effectiveness of the support tools for the local brokers, thus removing cost from the existing, trusted and effective distribution system.

We believe that insurance companies dont need better Web sites. They need a better online model that will fine-tune the time-consuming and cumbersome policy quoting and binding and management process that brokers must face when interacting with underwriters.

The Internet provides agents and consumers with the means for unprecedented comparison of underwriters prices and coverage. Basically it comes down to better customer service when looking to differentiate your company from the competition. When properly integrated as a core business toolas important as a properly functioning phone and faxthe Web is a highly effective channel to immediately communicate with agents who find themselves in situations where they must generate and bind policies quickly to keep their customers happy.

As a result, companies that are first to take the leap and adopt the Internet to enhance the relationship consumers have with their agents give themselves a better opportunity to earn agent loyalty and find long-term success.

The speed, availability and convenience of the Web makes it an ideal interface to help agents save time and cost when working with underwriters to perform important tasks such as generating quotes, binding and renewing policies. Furthermore, with less stress and with better customer service, underwriters themselves will reduce labor costs, improve market share and increase revenue.

Underwriters should look for solutions that will help agents work with their firm more efficiently. The following pain points agents deal with on a daily basis when servicing their customers should be the first to be addressed:

Accessing key documents can be a frustrating and time consuming process: Real-time online access to key documents will reduce the amount of time agents spend chasing documents and increase the time they spend tending to their clients requests.

Long transaction times processing individual policies are cumbersome: The Web allows insurance professionals to share information much more efficiently than traditional paper-based methods such as faxing or mailing. Implementing an intuitive, easy-to-use Web-based application that allows the broker to obtain individual quotes, bind the transaction online and receive or forward the policy via e-mail, all in a matter of minutes, will reduce the quoting and binding process to minutes, versus the days or even weeks of traditional processes.

Because of the Internets ubiquity, nearly everyone (customer, agent and company) already has access to it. However, effective use of this powerful communication medium does require knowledge of two important issues. First, what are our customers and clients trying to get done? Second, what processes and decisions have to be invoked for them to accomplish it?

While the first answer may be "trying to secure insurance coverage," the next question can be answered by closely examining how the client or customer interacts with the information and processes it. Speed, accuracy and usability are important parts of designing any Internet solution, because its whole purpose is to make a business process more streamlined.

The Internet gives underwriters the opportunity to pull away from the competition and reap the following benefits:

Reduced transaction times and increase overall efficiency

Improved broker loyalty due to a more fluid process

Increased time can be spent better serving existing clients and cultivating new ones

Decreased underwriter transaction costs associated with manual processing

Maximized broker and company revenue opportunities.

In the end, underwriters who are first to fully integrate the Web into their business with solutions such as an online rating and binding system, which includes content management and a good user experience, will allow agents to work with them more efficiently. They will realize a fast return on their initial investment with increased workload capacity, superior performance of their existing agent workforce and cost reductions.

Scott J. Cleversey is director of solution development at Molecular Inc., based in Watertown, Mass. He can be reached at scleversey@molecular.com. Jeffrey M. Lewis was most recently chief customer officer of Monster.com, a TMPW company. Prior to that, he was a senior consultant at Patricia Seybold Group and co-author of the 2001 business book "The Customer Revolution." He can be reached at jlewis130@charter.net.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, August 25, 2003. Copyright 2003 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.