Taking Advantage Of Web 2.0

Web 2.0 has been around for a few years now, he explained, but change does not come quickly in this industry.

"Innovation doesn't come first in insurance, but it doesn't mean it doesn't come," Mr. Pelenur observed.

What are the drivers of this change?

One is economic reality. Agents are being asked to do more with less, he said, and they are being asked to take on additional burdens with limited resources. This translates into eliminating inefficiency in the system.

What this means for producers is developing systems that notify agents of transactions they want to know about and giving them the information they need without having to look for it. With Web 2.0, systems are interactive, providing links and enhancing partnerships between agents and their carriers.

In this interactive world, agents are told when things happen to their clients, carrier quotes are e-mailed and e-mail notes are sent to a producer's BlackBerry. A button is pressed and a risk is bound; underwriting is done online; systems remember where a conversation was left off. It is "interaction in a dynamic application" performing a lot of tasks behind the scenes for agents, said Mr. Pelenur.

"It is real-time work flow and it knows where you are in that system," he said. "It tells you what you need to do and doesn't just give you the current status. The system has to be smart enough to know what you want and what you do."

A lot of progress is being made toward that goal, he said, noting that his own company offers many of these answers. Quotes are increasingly being automated, but it remains true that the more complex the underwriting, the more difficult it is to automate. But the bar is moving higher, he said, and more innovation is on its way.

A small number of carriers have become the early adopters of Web 2.0—the thought leaders, as he called them. The barrier today is not so much the technology as the dynamics of the markets, he said. He noted that especially with personal lines, companies such as Progressive and GEICO have embraced these disruptive technologies and are "doing well for themselves."

Competition is also driving Web 2.0 as agents seek to differentiate themselves and can only do so by providing better service. There are limits to what an individual can do, Mr. Pelenur noted, and it is through technology that agents will find the scale to render service faster than their competitors. However, that also means agents must invest in these technologies.

MORE INTERACTIVE CUSTOMER RELATIONSHIPS

Mr. Pelenur noted that there is a certain degree of inevitability in the changing dynamic between agents and customers. Using the travel agency business as an example, he noted that people once visited an agent for their travel plans. Now, they reserve the more complex transactions for the agent and rely on the Internet for simpler travel needs.

In the world of Web 2.0, the relationship between agent and customer is becoming more interactive. Users are beginning to become more involved in the marketing decisions between client and agent, noted Jeff Yates, executive director of the Agents Council for Technology. The current trend is "permission-bound marketing," where clients decide what material they want and how they want to receive it.

"People don't want to be bombarded with advertising," he said.

Agents now must design their Web marketing differently—to give information such as "Learn more to save on auto insurance" or "Learn more to prepare for a hurricane," Mr. Yates said.

These taglines need to feature a click-through component to the agent's website and the posting of detailed information.

However, some things don't change.

As in the past, Mr. Yates said, it is all about building relationships, only in the world of Web 2.0 those relationships are built through the electronic medium.

Utilizing social media deemphasizes traditional media that is not working well, such as the Yellow Pages, and can open the door to eliminating it altogether, he said.

Agents may look at the electronic medium as a challenge, but "what we are finding is that those agents that are good at marketing are successful with social media sites," Mr. Yates said. He added that the use of social media is in "pre-adolescence" and its utmost potential has yet to emerge.

The best way for agents to begin to build a presence on the Web, he said, is to look at what others are doing first.

Cindy Donaldson, director of marketing and personal lines sales for Founders Insurance Group, an independent agency based in Torrington, Conn., said that for her, coming into an insurance agency from an advertising agency two years ago, she was surprised to learn that few agents utilize such social media concepts as blogging.

She believes it will be necessary for the survival of the independent agency system.

"My feeling is if small businesses want to survive, they have to embrace the digital world," said Ms. Donaldson, especially to attract the younger generation. This means using smart phones, blogging, managing and incorporating it as part of their whole marketing package, she said.

"If they will not do that, then they will not survive and the big agencies will swallow up the small. If that happens, then there will be few of us left," she suggested.

She noted, too, another advantage to using electronic media for marketing is the cost, which can be free to minimal. For that investment, agents have the ability to reach a broad spectrum of people.

"You have to be consistent and do it often [to be successful]," she said, but it should not take a lot of time and an agent should only need to devote 20 to 30 minutes a day to the effort. She added, however, that electronic media today should be a piece of a marketing strategy that combines the traditional with the electronic.

"Agents need to get in now if they want to compete," she said.

There are other advantages, too, such as in hiring, where agents can connect to potential new job candidates through Facebook or LinkedIn.

Carriers are also impressed, and agents can get monetary help with advertising from an underwriting partner who views their agency as "up and coming."

McClain Insurance Services, an independent agency in Everett, Wash., run by its founder and president, Claudia McClain, has seen success by being the neighborhood family insurance specialist offering 100 percent personal lines in both property and casualty and life insurance lines. She learned about social media through the Quantum Club, a network of 500 to 600 members, some of whom embraced social media some years ago.

Through observation, she said she had an eye-opening experience that allowed her to begin promoting electronically to her client base.

She once used e-mail marketing as her dominant form of electronic marketing but today markets the agency though links to the company's Facebook page or a landing page dealing with a specific topic of interest.

"We have learned to integrate various mediums together," she said.

"One theme I share is that social media is just another community," observed Ms. McClain. "We are all comfortable as agents with the idea of being a part of a community. All successful agents have different communities that they participate in and grow from. Social media is just another community."

The importance of social media is not limited to agents, however.

At Westfield Insurance, based in Westfield Center, Ohio, Katie Herbst, Web and social marketing manager, noted that managers at the insurance company are examining how social media has changed their customers and what it means for the company. What they discovered is shared with their independent agent partners and the industry.

Utilizing that knowledge, Westfield helps agents produce Web marketing plans including Web templates for the agency. Westfield agents also can take advantage of company discounts with certain vendors to help them achieve their online goals.

Westfield's strategy involves strengthening its relationship with its customers while keeping agents in the loop.

Among its social media offerings, the company offers blogs sharing its risk management expertise for both agents and customers. The offerings include specialized hospitality products and an agricultural blog named "Grains of Knowledge."

The purpose of this, at Westfield, is to build trust and its brand through providing the kind of information both agents and customers want.

For 2011, Westfield will seek to build its presence on Twitter and Facebook and facilitate more conversations that will help the company learn about its customers and identify issues.

"This can no longer be brushed aside as just a rising fad," said Ms. Herbst. "This is something that has already changed our world, and changed our customers as well."