A Sales Pitch for the Internet.

We're just beginning to understand the potential savings that the Internet can offer to our transaction-intensive industry.

For many agents and brokers, the Internet is the ultimate "direct" competitor, especially for small accounts. Seen as a threat to the multicompany distribution system, the Internet--with its many applications--is not always recognized as a tool that can support sales, cut service expense and open new opportunities.

Applying the adage, "If you can't beat 'em, join 'em," agencies are using the Internet to provide multicompany value to online consumers. This begins with a joint venture with a bank or other financial institution interested in selling insurance to customers. The independent agent dedicates part of the joint venture's Web site to allow customers to enter some basic information and receive several quotes. After a customer selects the desired quote, the information downloads to the agency management system, where an application is produced. A customer-service representative follows up with the prospect to complete the transaction. This sales approach also could be arranged for employer-sponsored "insurance at work" programs so employees can purchase policies at their workstations.

The Internet also holds the possibility for efficient selling of simple policies to buyers in a trade group or association. For example, targeting a society of collectors that pay very small premiums per policy would not be cost effective in the traditional agency-servicing model. But provide access to a quote on the association's Web site, where the member fills out an application, chooses a quote, enters a credit-card number and prints out the policy, and you have a cost-effective model. Budget dollars earmarked for service staff can be spent on advertising or marketing.

The Internet also can bring efficiencies to traditional methods of generating leads, such as trekking to town hall to identify new businesses or new homeowners. This information is available on the county Web site for downloading into a prospect-management system and sorting by ZIP code or standard industrial classification codes for mailings or telemarketing. Once target companies are identified, producers can go into the prospect's Web site and gather information about the companies' insurance needs. Internet capabilities are especially important to emerging industries such as biotech, high-tech and telecommunications. These prospects will expect to communicate through e-mail, access the agency's Web site and perhaps download a video about the agency's products and services.

We are just beginning to understand the potential savings the Web can provide to our transaction-intensive industry. Today, agencies are providing customers the ability to issue their own certificates online. New browser-based systems allow customers to check a payment, get a quote on a new car, change an address or report a claim--24 hours a day, seven days a week--from their own homes. As carrier-agency communications expand, it will become routine for agencies to send an electronic submission via the Internet for downloading into the company system. There it will receive rating and underwriting approval and be transmitted back, so the agency can download it into its proposal format, customized with the prospect's logo.

With the increasing need to license service and sales staff as well as provide a variety of training, the Internet has become a cost-effective solution to training and education. State associations, carriers, brokers and large agencies are providing continuing education and, in some cases, interactive learning online. This can provide higher-quality, more cost-effective education and less employee down time. Increasingly, agency associations and carriers are sending newsletters, product information and marketing materials via e-mail, saving printing and postage and making it easier for agency personnel to route this information within their organizations.

The Internet is fueling the growing trend of having larger agencies provide market access to small agencies, with the subagency using Internet rating software and completing applications online. Inventive service providers are using Internet access, rather than traditional telecommunications, to allow the small agency to "rent space" on an agency management system. Online job posting and college Web sites help the industry conduct a more consistent recruiting approach.

Intranets already are bringing better information to multilocation agencies. But imagine employees at different offices having an agency meeting or instant messages sent between an underwriter and customer-service representative working on a renewal simultaneously.

The Internet is changing how the distribution system works; used wisely by astute salespeople, it can only make it better.

Sharon Cunningham, a Best's Review columnist, is president of Business Management Group, Hartford, Conn., a management consulting firm specializing in the insurance industry.