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The Web They Weave.

Insurers have been slower than book sellers and stock brokerages to embrace the Internet for business transactions, but they're gaining momentum.

Best's Review examined hundreds of Web sites and asked the largest insurers how they were using the Internet to conduct business with personal-lines customers, business customers and distributors. We compiled a list of about 100 Web sites drawn from the property/casualty, life/health and reinsurance groups based on 1998 net premiums. Business units are listed with their parent companies.

We used a loose definition of transaction that includes policy quotes and the ability to view accounts and file claims, but we did not include agent and doctor locators, financial-planning calculators, lead generators, marketing materials and forms.

We also asked companies to tell us about transactional capabilities that would be available in the near future, focusing on the next year. For companies that wouldn't participate, we gathered information from their Web sites.

Here are some of the findings:

* Financial-services companies offered extensive transactional capabilities at their banking and brokerage sites. While transactions at their insurance sites were more limited, these companies tended to be ahead of their competitors.

* Commercial insurers are moving aggressively toward Internet-based sales and service of policies for small businesses, the low-margin but fast-growing segment of the commercial market.

* Online binding and payment of policies are still very limited, but we'll see more of it in the coming year.

* Many insurers are moving their proprietary systems for dealing with agents to Web-based intranets and password-protected sections of their public sites. In addition to providing forms and marketing materials online, some insurers allow agents to submit new business and make immediate changes to policyholder accounts.

The Internet may be a vehicle that ultimately cuts agents out of the process in some lines. But for now, it is a tool that seems to make it easier for insurers and their distributors to do business together.

Aetna Inc.

www.aetna.com

Consumer

* Look up retirement-account balances and fund performance and reallocate account portfolio.

* InteliHealth: Joint venture with Johns Hopkins University, offers health information, customized weekly e-mail, health-related products.

Business to Business

* EZenroll benefits-enrollment system allows employers and employees to enroll for most health products.

Affiliations

* Exclusive rights to sell products on HealthAxis.com. Started in March with small-group medical plans in New York, New Jersey and Pennsylvania.

Aegon/Transamerica

www.aegon.com

Aegon has more than 60 Web sites worldwide, including 42 in the United States. U.S. sites include:

www.transamerica.com

www.tatransact.com

www.covernadirect.com

www.divinvest.com

www.idexfunds.com

www.westernreserve.com

Consumer

* Access to account balances and history and transaction services for policyholders and retirement-plan participants.

* Coverna Direct, the direct-to-consumer subsidiary of Peoples Benefit Life Insurance Co., performs all transactions necessary to buy insurance and perform all routine service online. Initial products: term, supplemental health and accident.

Business to Business

* Agent access to account balances and history, fund performances and transactions services: Analysis software, online forms and sales performance and tracking tools for agents.

Affiliations

* AnnuityNet.com offers the PFL Life unit's WEB annuity.

* Term products offered through QuickenInsurance, QuickQuote and other online insurance malls. Start application online, then complete at medical visit.

Future

* Diversified Investment Advisors launching online enrollment through Diversified Direct for retirement-plan sponsors. Interactive voice response and e-mail so clients can get instant, online customer service.

* More sales reporting and interactive training tools for agents.

* Offer more products through Coverna Direct and improve ability to offer customized solutions based on specific consumer needs.

Aflac Inc.

www.aflac.com

Consumer

* Submit changes to policy.

Business to Business

* Extranet for agents, including hot leads and production reports.

* Testing electronic billing, invoice maintenance and electronic funds transfer for employers' payroll-deduction programs.

* SmartApp laptop enrollment of applicants transmitted to the mainframe.

Affiliations

* Product information only on QuickenInsurance.

Investment

* Estimated $3 million total on infrastructure and application development.

Results

* Lighter load in call center and faster turnaround time for applications and claims response.

* Faster payment of commissions.

Future

* Expanded self-service for policyholders, agents and payroll accounts, including online policy maintenance and claims inquiries.

* Application status checks for agents; payroll group information for servicing agents.

* Expanding electronic billing for payroll clients throughout the United States.

Allianz

www.allianz.com

www.firemansfund.com

Consumer

* In Germany, life customers can view accounts and make changes to contracts.

* Selling auto online in Italy.

Business to Business

* Transacting commercial auto insurance with Volkswagen and a telecommunications company.

* Internet-based procurement of information-technology equipment as part of global-sourcing initiative.

* U.S.-based Fireman's Fund subsidiary provides extranet for agents.

Affiliations

* Many, including Allianz of Switzerland's relationship with Credit Suisse.

Investment

* In Germany alone, more than 50 million marks (about $24 million).

Results

* Business-to-business Internet transactions in Germany have generated 1 billion marks. Online insurer in Italy has 15,000 customers. E-procurement has saved 30 million marks to 50 million marks ($15 million to $24 million).

Future

* Launching portal for agencies and brokers by midyear.

Allstate Insurance Group

www.allstate.com

Consumer

* Policyholders can review billing status and report a claim online.

* This month, online sales and service start in Oregon.

Affiliations

* Agent referral through QuickenInsurance.

Investment

* About $1 billion in implementation and strategy over the next two years. About $700 million of that will be systems development.

Future

* Sales and service online in 15 states by the end of 2000 and throughout the United States by the end of 2001. Customers will be able to get quotes, buy policies or make changes to policies through customer-care center.

American General

www.americangeneral.com

www.valic.com

Consumer

* Access to retirement-account information and fund performance. Can reallocate among funds.

American International Group

www.aig.com

www.aigdirect.com

www.accessaig.com

www.sunamerica.com

Consumer

* Instant quoting for term life, auto, homeowners, accident and health.

* First notice of loss. Policy changes, including address, vehicle, lien holder. Billing, including payment by credit card.

* Consumers can enter telephone number and get immediate call from a representative.

* On www.sunamerica.com, customers can request fund transfers and trades online.

Business to Business

* Instant quote or quote by e-mail for property, general liability, professional liability, workers' comp and international coverage for businesses with less than $5 million in revenue. Can submit form indicating they want to purchase.

* Agents/brokers receive quotes, account access, online payment, loss runs and annuity and fund performance.

* With eWriter system, brokers quote and bind select coverages for qualified midsize accounts.

* Midsize and large businesses can file first notice of loss. Loss runs, online claims management, link to AIG's international sites for quotes on financial, life and property/casualty products.

Affiliations

* MapQuest, E-Trade and InsWeb (auto only).

Results

* The number of customers registered to use online account access increased 550% from May 1999 to February 2000.

Future

* Online binding of small business policies with prefilled applications, digital signatures and online payment.

* During 2000, AIG will offer consumers the ability to chat in real time with customer-service representatives.

* Co-browsing capability will allow a customer-service representative to view and control online application screen at the same time the consumer is working on it.

* SunAmerica plans to expand transactional capabilities.

Axa Group

www.axa.com

www.axa-financial.com

www.equitable.com

www.dljdirect.com

Consumer

* Equitable site has EQAccess, which allows policyholders to view policy values, investments and other information, but no transfers.

* Axa France provides account access for life products and property/casualty quoting.

* DLJdirect online brokerage has full transaction processing.

* Recently started selling auto

insurance online in Germany, France, Japan and Spain.

Business to Business

* Axa France provides property/casualty quotes to 800 brokers through an extranet.

Results

* DLJdirect online brokerage has 752,000 accounts in the United States, up 38% over five years.

* In the first three months selling auto insurance in Germany, sold 9,600 policies, 14% of total direct sales.

Future

* Online auto insurance will be available next month in the United Kingdom.

* Currently developing portal for Axa France brokers that will include online transaction capabilities and client-relationship tools for distributors.

* Over the next year, Axa will launch financial portals in the United Kingdom, France, Germany and Belgium and eventually will extend to other countries. Will offer banking, brokerage, investments and insurance.

* In the United States, common e-business effort being developed for Axa Client Solutions, Alliance Capital (investment management for institutions) and DLJ's Pershing, allowing for online account access and transaction capabilities.

Berkshire Hathaway

www.berkshirehathaway.com

www.geico.com

www.genre.com

www.nationalindemnity.com

www.bhln.com

Consumer

* Geico Direct provides online quotes and policyholder services, including payment through the Web site. Visitors can click a button and enter a phone number, and a representative will call them right back.

* Berkshire Hathaway Life Insurance Company of Nebraska has BHLN Direct, which provides quotes for a single-premium immediate annuity and a single-premium deferred annuity.

Business to Business

* Gen Re offers online reinsurance claims reporting and premium reporting.

* Submissions and quotes for global casualty and property facultative cover through FacWorld. Ability to review previous submissions. Rating tools, some of which allow processing of reinsurance data and premiums.

* National Indemnity provides rate indications for hole-in-one insurance and commercial and public auto in a handful of states.

Results

* Web Trends tracks usage at Gen Re site. Working on ways to analyze the impact upon levels of efficiency.

* High customer satisfaction with clients that do business with Gen Re over the Internet.

Future

* Gen Re plans to offer instant access to global General & Cologne Re associates. Enhance client-tailored extranets to support risk and information transfer and technical and functional tools.

* BHLN Direct will add life insurance products.

Chubb Corp.

www.chubb.com

Consumer

* Report claims.

Business to Business

* Loss reporting.

* With Claim View, agents and commercial policyholders can view claim status, adjuster notes, claims paid and reserves for commercial auto, general liability and workers' compensation.

* Access through @chubb extranet to RMIS Dimensions risk-management information system.

* Cargo customers can issue certificates, record import-shipping activity and storage exposures and produce management reports.

* Quote and bind coverage for residential and commercial builders.

Cigna Group

www.cigna.com

Consumer

* Variety of 401(k) transactions, including changing deductions and reallocating investments and portfolio.

* Discount stock brokerage has full transactional capability.

* HMO members can order prescriptions online, find a provider and change primary-care physicians.

Business to Business

* Enrollment for 401(k) and group insurance, except health-care benefits.

* Reports showing aggregated data about utilization of health benefits; 401(k) reports.

Affiliations

* Sells group life for small businesses through Health axis.com.

Future

* Online enrollment for group health benefits.

* Continuously rolling out customer self-service features for insurance and financial services.

Citigroup Inc.

www.citigroup.com

www.travelers.com

www.travelersla.com

www.pfsnet.com

www.citibank.com

www.smithbarney.com

Consumer

* Extensive online banking and brokerage transactions for Citibank and Salomon Smith Barney customers.

* At www.travelers.com, submit application for auto, homeowners, marine or flood insurance policies and get quotes by e-mail within two business days. Can submit claims online.

* At www.travelersla.com, Travelers Life & Annuity customers can view annuity account information.

Business to Business

* Small businesses can submit application for property/casualty insurance and get call with a quote.

* Businesses can report claims online.

* ECARMA product provides online access to analysis tools and reports for corporate customers.

* At www.travelers.com, password-protected agent section provides access to customer files, allows online policy changes and online quoting for flood and marine. Also includes access to reports on commissions, income, premiums and profits.

* At www.travelersla.com, agents can check new business status, check histories of annuity accounts, make account inquiries and order supplies.

Affiliations

* Quotes at InsWeb and Quicken-Insurance for auto insurance.

* Use ClicknSettle and CyberSettle for online claims settlement.

Future

* Instant quotes for auto insurance later this year, followed by other products.

* Citigroup's e-Citi unit and Commerce One early this year were to launch a business-to-business portal for electronic procurement. Commerce One MarketSite Global Trading portal will offer Citigroup's financial-services products.

CNA Financial Corp.

www.cna.com

www.agorare.com

www.moac.com

Business to Business

* Direct writers post applications and case-specific documents to CNA Life Re's AgoraRe.com, where one or more reinsurers can make offers. Also provides tracking system. As of March, seven companies were on the site with two working toward implementation.

* MOAC, a CNA maritime division, provides agents and insureds account access, first notice of loss, online application for ocean cargo, commercial hull and P&I insurance.

Affiliations

* Two-year sponsorship agreement with iVillage.com to provide information and quotes for life insurance products.

* Quotes for auto insurance are available at the auto shopping site www.AutobyTel.com.

* Auto and term life insurance are quoted through InsWeb.

Future

* Term life insurance quote section is under construction.

* Applications and bond issuance through BondOniine for CNA Surety.

* Expand services at www.moac.com to other CNA maritime units.

GE Financial Assurance/GE Global Insurance Group

www.gefn.com

www.ercgroup.com

www.gereinsurance.com

Consumer

* Quotes for auto, homeowners, term life, long-term care, accident insurance and single-premium immediate annuities. Typically, applications can be started and consumers are later contacted by an agent.

* Buy, sell or transfer mutual funds.

* For auto, view policy information and make payments.

Business to Business

* GE Financial Assurance provides online support and service for distributors, including information about in-force and pending policies.

* Employers Reinsurance Group launched RIO-Reinsurance Online. With it, ERG Frankona customers in Europe can buy excess-of-loss cover for aviation, energy/marine, some nonmarine and space.

* ERG also is selling credit and bond reinsurance online to select customers in Europe. In the United States, it's testing online placement of casualty reinsurance with three clients.

Future

* Continue to expand transaction capabilities and lines of business.

Gerling-Konzern Globale Reinsurance Group

www.gerling.com

Information only.

Enriching the lives of People we touch

The Guardian Life Insurance Co.

www.glic.com

Consumer

Access to mutual funds, trust accounts and 401(k) accounts.

Business to Business

* Benefits enrollment and electronic billing for plan sponsors.

* Broker/dealers have access to client accounts.

* Brokers use Channelpoint to submit group health applications, get quotes and enroll.

Future

* Integrate various Web sites for distributors into one cohesive site.

* Allow distributors to view commissions and submit proposals for new cases.

* Allow consumers to make transactions online, from enrolling to transferring funds.

Welcome to Hannover Re

Hannover Reinsurance Group

www.hannover.re.com

www.rch.net

Business to Business

* No reinsurance transactions. In South Africa, life and health reinsurance customers have access to quote functions to rate their risk.

Future

* Expanding life reinsurance quoting function to additional customers.

Hartford Financial Services Group Inc.

www.thehartford.com

www.hartford-specialty.com

www.specialtyriskservices.com

ebc.thehartford.com

www.thehartford.com/FirstUnion

www.stoploss.thehartford.com

www.ltc.hartfordlife.com

www.individuallife.hartfordlife.com

www.firststateins.com

Consumer

* The AARP auto insurance program offers quotes online and by email, auto insurance cards and endorsements, filing of initial claim reports by e-mail and online payment.

* Retirement-plan participants can view account information, change investments and transfer assets among investment options.

Business to Business

* Pilot program where agents can apply, quote and bind standard commercial coverage online.

* Large accounts have access to @venture, a risk-administration service that allows for claim inquiries and reports, Internet billing and access to account information and account team members.

* Through bank partners, small businesses can request quotes (24-hour response) and submit applications. Piloting program for one-hour Web response to small-business inquiries.

* Employee-benefits brokers get real-time data on commissions, book of business and case information.

* This spring, a stop-loss site will offer self-insureds online quote submission, premium and billing administration and direct submission for claim and census forms.

Affiliations

* BenefitPort, a health insurance sales network, allows producers to generate quotes and proposals for group benefits for small businesses.

* Car-buying Web services and Internet insurance marketplaces (InsWeb, Ebix.com) route leads to agents.

* Referrals for group life and disability through QuickenInsurance.

Future

* In the next year, converting all major interactions with personal-lines agents into Internet-based connectivity.

* Internet-enabling Hallmark, Hartford's proprietary system.

* For large accounts, put Hartford Specialty Risk Services SRSummit risk-management information system online and offer online claim reporting and online access to actual insurance policy.

* One-hour response to small-business customers applying through bank sites.

* Offer agents online policy view, claims filing and billing transactions and rating, quoting and issuing policies, eventually in real time, for personal-lines and small-business policies.

* Individual life producers will be able to submit simplified life insurance applications via the Internet and check for underwriting and approval status.

ING Group

www.inggroup.com

Consumer

* Belair Direct, part of ING Group of Canada, provides auto quotes and binds accidental death coverage online.

* ING Direct, an Internet-based bank, operates in the Netherlands, Canada, Spain, Australia, Germany and--since March--France. Offers transactions for simple bank products.

* Online brokerages operate in the Netherlands, France and Belgium.

Future

* Investing about $1.94 billion in online-banking activities in the next three years.

* Starting ING Direct in the United States and Italy this year.

John Hancock Financial Services Group

www.jhancock.com

Consumer

* Nonbinding quotes with six-question application. Apply with short or 200-question application online. Final quote after underwriting.

* "Call me now" button for immediate call from representative.

Business to Business

* Product information only.

Affiliations

* Quoting through QuickenInsurance, Quotesmith, InsWeb and four other aggregators.

Results

* Sold 18,000 term policies through its own and aggregator Web sites in 1999, accounting for half the total number of term policies the company sold last year.

* Sales were up from 11,000 policies in 1998 and 1,900 in 1997.

Future

* Online quotes for variable annuities and long-term care.

* Planning to develop an "E-portfolio" of streamlined products that could be sold online or by agents.

* Planning to aggressively sell variable annuities online. Will focus on long-term care and variable-life products next.

AUTO, HOME & LIFE INSURANCE

Liberty Mutual Insurance Group

www.libertymutualinsurance.com

www.wausau.com

Consumer

* Online quotes for auto insurance.

* Customers can request policy changes, address changes and add or delete drivers.

* Submit first report of loss for auto, home, marine and request information on claims through e-mail.

Business to Business

* Launched www.ewausau.com this year. The site sells workers' comp, business owners policies, umbrella policies and commercial auto directly to small-business owners. Online quotes, application, binding and claim filing.

* Wausau's risk-management information system online provides loss information, detailed claim information and reporting and analysis tools.

* This month, Liberty Mutual launched Internet-based version of Risktrac risk-management information system.

Affiliations

* Wausau sells workers' comp direct to small businesses through AtYourBusiness.com, a Web-based service that provides employee-management services for small businesses. Processes applications electronically and provides binding quotes directly to the buyers.

* Partnership with more than 113 employers, which provide links on their Web sites to Liberty Mutual.

Investment

* Wausau invested an undisclosed amount in AtYourBusiness.com.

Future

* Expanded quoting functions.

* Ability to view claim status online.

* Ability to bind coverage.

* Online billing.

Lincoln National Corp.

www.lfg.com

www.lincolnlife.com

www.annuitynet.com

www.delawareinvestments.com

www.firstpenn.com.

www.lincolnre.com

Consumer

* Internet Service Center allows Lincoln Life annuity contract owners to view account information and change allocations.

* Online sales of annuities at subsidiary www.annuitynet.com. Customers can check accounts and change allocations.

Participants in 401(k) plans or mutual funds through subsidiary Delaware Investments can get a password to change allocations.

* Term life quotes from First Penn Specific Life Insurance Co.

Business to Business

* Groupnet allows retirement-plan sponsors and third-party administrators to process contribution information through the Internet.

* Provides Lincoln National template for agents and brokers to build home pages.

Affiliations

* InsWeb, Quotesmith, QuickenInsurance.

Lloyd's

www.lloyds.com

Business to Business

* Approved brokers and customers can get quotes, bind coverage and file claims for cargo in transit through www.cargoinsure.com.

* Trial program called CLASS, a claims-settlement system for the London company market.

Affiliations

* Some managing agents offer personal lines through aggregator sites, such as www.insurancewide.com.

Future

* As a founding member of WISe, the Worldwide Insurance e-commerce organization, Lloyd's is working to ensure that the majority of administrative transactions passing between market entities are electronic by the end of 2002.

* Lloyd's also is working with the International Underwriting Association to move toward London-wide systems for policy creation and claims processing.

MassMutual Financial Group

www.massmutual.com

www.oppenheimerfunds.com

Consumer

* Annuity contract holders can see account information and make address and beneficiary changes.

* Life insurance policyholders can make changes to policies, including dividend options, and request loans against whole-life policies.

* Participants in 401(k) plans can change investment options, automatically rebalance accounts and get statements for up to two years.

* Oppenheimer Funds offers mutual-fund account transactions.

Business to Business

* Agents can see annuity account information and make address and beneficiary changes.

* Claims submissions from agents and new business submissions for all lines.

* Enrollment services for corporate and bank-owned life insurance market.

Results

* Customer service costs are one-tenth of what they used to be for all areas that have been Web-enabled.

Future

* Working on enterprise e-commerce to provide Web service for a combination of products.

Metropolitan Life Insurance Co.

www.metlife.com

Consumer

* Online quotes for personal auto policies.

* Submit change-of-address forms online.

Business to Business

* MetLink benefits administration allows enrollment, eligibility updates and inquiries, dental and disability claim inquiry, premium vs. claims reports, billing initiation and inquiry and electronic payments.

* Transaction capabilities for participants in 401(k) plans through customized plan sponsor sites.

Affiliations

* InsWeb.

Munich Reinsurance Co./ American Reinsurance Co.

www.municbre.com

www.amre.com

Munich Re site offers no transactional capabilities. The following applies to the American Re site.

Business to Business

* Redesigned site allows prospects to submit coverage requests for property/casualty facultative, home/foreign facultative, international and ocean marine risks.

* Access to the Auto Fac system, a bordereau and management information system that also allows clients to get quotes and bind facultative coverage for certain lines.

Nationwide

www.nationwide.com

www.nationwidefinancial.com

Consumer

* Auto quotes and online service, including changes in address, adding/deleting vehicles or drivers, checking payments and changing lien holders.

* Internet Service Center allows financial-services customers to check account balances and, depending on the account, execute transactions, such as moving money from one investment option to another or switching investment choices.

Business to Business

* Producers have access to accounts through Internet Service Center.

Affiliations

* InsWeb.

New York Life Insurance Co.

www.newyorklife.com

Consumer

* Quotes and routine service functions, such as change of address or beneficiary or loan-value questions, are submitted by e-mail with 12-hour turnaround.

Business to Business

* Agent intranet provides access to policy information. Requests for changes submitted on prefilled forms to service center.

Affiliations

* InsWeb for long-term-care insurance.

Investment

* Committed to invest $60 million for infrastructure for Web-site development across the enterprise in 2000 and 2001.

Results

* Reduced expenses for customer service. A phone call to handle a policy transaction costs about $4 vs. 5 cents for an Internet transaction.

Future

* Immediate access to policy information and customer-service functions.

Northwestern Mutual Life Insurance Co.

www.northwesternmutual.com

Consumer

* Policyholders can check account values and policy values online. Can submit change requests by e-mail with online forms.

Business to Business

* Rollout this month of LINKnet intranet site, allowing agents to see the same information clients see when they visit the Web site.

Affiliations

* Leads from InsWeb referred to agents.

Investment

* Less than $500,000 so far on public Web site.

Future

* Policyholders will be able to make changes, such as address and beneficiary changes.

* Building a business/corporate service page to give information about corporate policies.

* Agents will be able to purchase supplies and forms and generate reports through intranet.

* Continue to migrate agent desktop applications to intranet.

Pacific Life Group

www.pacificlife.com

www.lifeline.pacificlife.com

www.annuities.pacificlife.com

Consumer

* Starting May 1, annuity contract holders can access contract value online.

Business to Business

* Two extranet sites for brokers, www.lifelinepacificlife.com for the life division and www.annuities.pacifilife.com for the financial-planning division.

* The life site offers forms, contract values, surrender quotes, cash-value quotes and loan-payoff quotes.

* Annuities site provides contract values, annuity illustrations, performance information and daily unit values. Starting May 1, site will allow some transactions, such as reallocating investments, rebalancing among funds and changing name and address.

* Brokers on both sites can get reports on their books of business.

Principal Financial Group

www.principal.com

Consumer

* Extensive online banking and brokerage transactions.

* Access to individual and employer-sponsored retirement accounts. Can transfer among funds and change investment options.

* Individuals can view health insurance policy information, including copayments and deductibles.

Business to Business

* Employers can send plan members' 401(k) contributions, add new members to the plan, review and change member information, contact customer service by e-mail and receive investment information for members.

* Employers can view health insurance policy information, including copayments, deductibles and detailed billing statements.

* Captive career agents can view policyholder information online and view commissions associated with premiums. Also can access and move own personal financial investments.

* Independent agents can view clients' policies and commissions on transactions for specific product lines, with full rollout in a year.

* Marketers Workbench provides access to reports and ability to generate customized financial reports in addition to other information.

Affiliations

* Principal Bank, Quicken Turbo-Tax.

Results

* Reduced expenses: in-person contact with the company costs $8; contact by phone costs 40 cents; and an Internet contact costs 5 cents to 8 cents.

Future

* By midyear, access to illustration capabilities for the agents and brokers through the Internet.

Progressive Corp.

www.progressive.com

Consumer

* Auto insurance quoting, buying and binding. Insurance quotes for motorcyles in 45 states and for recreational vehicles and watercraft in 22 states.

* Pay premiums, check billing schedules and payments.

* Endorsements: address changes, replace vehicle, coverage changes for physical damage, change lien holder.

* Quote to see how new vehicle would change premium.

* Check claim status, check payments on claims, check subrogation status, e-mail question directly into claims representative's diary system.

Business to Business

* Agents-only section of www.progressive.com offers the same transactions as consumers section, as well as monthly production numbers.

* Beginning in April, agents could download daily policy information via the Internet.

Affiliations

* InsWeb, Quotesmith and 300 Internet sites.

Results

* In 1999, 7% of direct business was generated from the Internet.

* Sold $70 million in premiums online.

Future

* Expand Personal Progressive area to allow for more endorsement capabilities, including adding and deleting drivers and making additional coverage changes.

* Make quoting easier.

* Online sales for watercraft, recreation vehicles and motorcycles.

* Add commission status, underwriting accuracy measures and loss ratios for agents.

* Allow policies to be uploaded from the agent to Progressive via

* In 2001, agents will begin underwriting and quoting, using the ProRater system over the Internet.

Prudential Insurance Company of America

www.prudential.com

Consumer

* View detailed information about accounts, including mutual funds; variable annuities; variable, whole and term life insurance; and auto insurance and homeowners insurance. Cannot make changes.

* Individuals can enroll in a company's 401(k) plan, view account history, change contributions, exchange funds and check loan balance.

* Online quotes for term and variable life insurance.

* Online auto quotes in five states. Overnight e-mail response for six other states.

* Extensive online brokerage transactions.

Results

* Number of hits on the Web site grew 140% from 1998 to 1999, with visitation to insurance sessions growing at about the same rate.

* Term life quoting application has produced lead conversion rates 60% higher than general Web-site leads.

* With overnight and real-time auto quotes, average monthly requests for appointments increased more than eightfold.

* About 9,000 customers registered for Prudential Online during a test in three states in 1999.

Reinsurance Group of America

www.rgare.com

Business to Business

Accepting facultative underwriting business online, as well as images and structured case data.

* Extranet for retrocessionaires provides information about the block of business they have assumed from RGA. Claims processing expected to be available this month.

* Electronic data interchange for companies to send policy ledgers to RGA.

Investment

* Between $5 million and $10 million. Soon, as much as half of the company's information-technology budget will be for e-commerce.

Future

* Use XML to provide tools and directions to connect insurers' administrative systems to RGA's administrative systems.

* Accept claims information and more real-time new-business feeds from client companies.

* Additional extranet capabilities for client companies, including billing information, ability to check retentions and more specific information on the status of cases.

St. Paul Cos.

wwwstpaul.com

www.geovera.com

Consumer

* GeoVera Insurance Co. sells earthquake insurance online to California homeowners.

Business to Business

* First notice of loss for commercial auto, commercial general liability, commercial property, medical liability and workers' comp.

* With SPCQuote tool, agents can get online quotes for all small-business commercial lines except workers' comp. Quoting tool in use by 500 agencies; of those, 100 have binding authority.

* Offers policy information for agents, including billing and loss information.

Results

* In some months, as much as 40% of new-business quotes come through the Web site. They don't all translate into policies, however.

Future

* Workers' comp quoting for agents later this year.

* Expected to open quoting capabilities to all 3,500 small-commercial agencies, probably in the second quarter.

USAA

www.usaa.com

Consumer

* Extensive banking and brokerage transactions.

* Quotes for term life and deferred annuities. Can submit term life application online. Also quotes for short-term health, dental and medical products through third parties.

* Sells flowers online and retail merchandise through online catalog.

* Most recent billing information for property/casualty products.

* Initiate property or auto claims online.

Results

* Brokerage business more than doubled in 12 months, and staff grew very little.

* About 70% of discount brokerage transactions are handled electronically.

* Shift in work force from people dealing with members on the phone to people working in the back office.

Future

* Full access to view value of life insurance contracts.

* Open accounts online.

* Full interactive quoting for property/casualty products online.

* Packaging together all USAA accounts--brokerage, banking, insurance.

Scor

www.scor.com

Business to Business

* Online tools for business partners, such as risk evaluation and rating for property/casualty and life businesses. ASTRE is a tool for evaluating and underwriting small to midsize industrial risks.

Investment

* About 20 million euros (about $19.4 million) annually, on average, excluding exceptional expenditures. About 20% to 25% of that is specifically for Internet-related tools.

Future

* By the end of the year, the company will be marketing Internet tools under the heading of I-Solutions: IFAC for facultative reinsurance and I-CARE, a life reinsurance product.

* Developing a service to offer risk applications, mainly for small to midsize facultatives. U.S. clients will have access first, then others at a later date.

* Working on internal processes to optimize electronic processing for claims to be integrated directly into internal systems.

State Farm Group

www.statefarm.com

Consumer

* Online quotes for term and whole life; auto quotes in 32 states.

* Internet banking function was expected to be released nationwide in April. Deposit functions only at first.

* Online application for car financing was expected in early May.

Business to Business

* Internet banking function for agents and associates.

Affiliations

* QuickenInsurance, NetQuote, InsWeb, Autoweb.com.

Results

* Close rates for online quotes are better than other media, such as direct mail.

Future

* Rental-car rate-quote function, probably by the end of the third quarter.

* Will add long-term-care rate quote sometime this year

* Mortgage loan application processing.

* Part of long-term strategy to be financial portal where customers can buy insurance products, open and manage bank accounts and secure and manage mortgage and car loans online.

Swiss Reinsurance Group

www.swissre.com

www.swissreamerica.com

Business to Business

* With electronic risk exchange known as ELRiX, Swiss Re prices and binds windstorm reinsurance for the United Kingdom, France, Belgium and the Netherlands; earthquake reinsurance for Israel; and marine reinsurance for anywhere in Europe. Also, online quotes for general aviation reinsurance.

Affiliations

* Agreement to post risks on www.catex.com, the reinsurance exchange.

Future

* Expand system to include casualty, including workers' comp.

Zurich Financial Services

Zurich has many sites for its businesses worldwide. Here are some of them:

www.zurich.com

www.zurichus.com

www.farmersinsurance.com

www.zurichkemper.com

www.zurichdirect.com

www.zurichre.com

www.eaglestardirect.co.uk

www.scudder.com

www.kemper.com

Consumer

* Owners of Kemper Advantage III variable annuity can access accounts and transfer money within their contracts at www.zurichkemper.com.

* At www.zurichdirect.com, consumers can get instant quotes and apply online. Applicants can check the status of an application online, and policyholders can review policy status and request changes.

* Eagle Star Direct provides quotes and sells auto, home, boat, travel and life insurance online in the United Kingdom.

* Scudder Investments and Kemper Investments allow individual investors to access accounts and process mutual-fund transactions.

* Retirement-plan participants can access and reallocate accounts.

Business to Business

* Financial representatives, plan sponsors and third-party administrators can access and update retirement-plan records.

* With eZSB quick-quote system, Zurich U.S. allows agents to rate, quote and issue policies and renewals online for small business, agriculture and residential builders. Agents also can submit applications for large construction builders' risk policies and get quotes by e-mail in 24 hours.

* Zurich U.S. offers agents and corporate customers online access to claim and loss reports, claim information and adjuster notes and claim file documents.

* Zurich Re offers online facultative reinsurance quotes for property and casualty through eFac. Quotes are returned in 24 hours. Can request that submission be sent to other reinsurers as well.

Affiliations

* Zurich Kemper Life routes InsWeb leads to agents.

* Zurich Direct sells directly through QuickenInsurance.

Investment

* Zurich U.S. has invested $3.5 million over two years.

* In December, Zurich Financial Services announced a $15 million equity investment in return for 10% ownership of a European-based subsidiary to $1 Corp., a provider of Internet banking technology.

Results

* Zurich U.S. issues more than 50% of policies in some lines via the Internet with immediate policy delivery to the agent.

Future

* Zurich Financial Services is building an integrated e-business platform, or "hub," to give brokers and customers global access to all companies. In addition, the company is developing a financial portal that will provide basic banking, stock brokering, asset management, financial planning and risk management, in addition to all forms of insurance, including third-party products.

* Owners of other Zurich Kemper Life annuities and all life products soon will have access to accounts online.

* Farmers' customers will be able to file claims, check status of bills and pay bills online.

* Farmers agents will be able to file claims, check and pay bills, quote, apply and bind policies online.

* Zurich U.S. will add online quoting, applying and binding online for additional lines of small-business coverage and expand policy submission capabilities for other lines, including environmental, marine and warranty.

* Zurich U.S. will expand service capability, particularly online endorsements, for small-business policies; offer claim reporting and tracking online; and offer consolidated loss, risk engineering and premium allocation reporting for international customers.

* Zurich U.S. will offer agents online bill and commission reporting and complementary products from other Zurich entities.

Allstate: Major Distribution Shift

Allstate Group surprised the insurance industry in November by announcing an aggressive plan to meet competition by expanding into telephone and Internet sales.

The Northbrook, Ill., insurer said it expected to cut spending by $600 million by the end of this year and would channel those savings into call-center and Internet capabilities. Under the reorganization plan, the company will invest about $300 million in capital expenditures over the next two years. It also will spend about $700 million in systems development and implementation costs, rollout costs and advertising for the new strategy over the same period.

The plan calls for phasing Out company-employed insurance agents and moving them to independent-agent status. In so doing, Allstate seems poised for a major shift in the emphasis of its distribution system--away from the captive-agent system and toward the less-expensive channels of Internet and telephone sales.

Allstate is expected to begin rolling Out access to the Internet and toll-free telephone numbers to customers in Oregon this month.

As the No. 2 market-share leader--behind State Farm Group--in personal lines, Allstate needed to come up with an Internet strategy; Martin P Sheffield, vice president of A.M. Best Co.'s property/casualty division, said following Allstate's reorganization announcement. This became especially apparent after Allstate's purchase of CNA's personal lines in 1999, Sheffield said. The acquisition cemented Allstate's personal-lines commitment and propeled the company to become one of the leading independent-agent carriers, he said.

As part of its game plan, Allstate expects to have a new client-information center in Woodbridge, Ill., completed by September. The 77,000-square-foot center will house up to 700 new employees and will be the third such center created to support Allstate's new initiative. The others are in Vernon Hills, Ill., and Charlotte, N.C. The company's ultimate goal is to link agents to the new system and develop the capability to report on a single household's policies--automobile, homeowners, life and annuities.

The company has used the Internet in the past, but not on the large scale it now envisions. In October, All state began marketing auto policies through Ins Web in New Mexico and, soon after, expanded into Arizona, Nevada and Utah. Queries through InsWeb are referred to Allstate agents.

During the past two years through InsWeb, Allstate also has offered term life insurance written by lincoln Benefit Life. In addition, CNA offered auto policies through InsWeb, and Allstate has maintained that since the acquisition.

A month before the big announcement, Allstate said it had saved $100 million with a new computer system that simplified the way the company keeps track of its finances. The new system also allows the company to see how its life products are selling through differen distribution channels, allowing Allstate to easily corn pare sales by agents, banks and brokers.

Edward Liddy, Allstate's chief executive officer, ha predicted that once the reorganization is completed late next year, Allstate will be the only personal-lines insure distributing its products across all distribution channels.

"The opportunities for cross-selling will be enormous," Liddy said.

Barbara Bower

Online Transaction Options Abound for Reinsurers

When reinsurance buyers go shopping online, they can choose from an array of venues, including the factory outlet, the virtual trading floor or the auction. They can buy coverage at a company Web site. Virtual exchanges offer a way to swap risk or buy coverage in a secure trading environment. And at least one reinsurer is selling capacity online to the highest bidder.

Germany's ERG Frankona, a unit of Employers Reinsurance Corp., is dealing directly with its customers over the Internet. Its RIO online site allows European buyers to obtain excess-of-loss coverage in aviation, energy marine, some nonmarine, space, credit and bond lines of business. The company is hoping to make U.S. casualty reinsurance available in the future.

The RIO site is for established clients of ERC Frankona. Buyers log on to the site and can see the types, amounts and terms of coverage the reinsurer is willing to offer, based on a client's individual profile. Customers can order new coverage or review existing agreements. The screening of users provides the underwriting control to prevent the company from taking inappropriate risks through the Web site, said Jochen Deiser, an underwriter at ERC Frankona. "I have full control of this in the back office," he said.

In March, the reinsurer was preparing to roll out the service to brokers as well as direct purchasers, Deiser said. Brokers will be required to identify the client to ensure that ERG Frankona is dealing with an established customer. Where clients are new or want coverage that hasn't been previously offered to them, the online transaction won't go through, and the broker or customer will have to work with ERC Frankona's underwriters.

Just four purchases had been closed online as of late March. "We don't expect a big number to be transacted over the Web page, but the individual transactions could be quite large," Deiser said. One notable feature of the site is that users waive the right to have a paper contract and agree to be bound by the electronic transaction.

Swiss Re last year launched ELRiX, a site where its reinsurance capacity is up for auction. It went online in November with wind, earthquake and marine catastrophe capacity totaling 170 million Swiss francs (about $104 million) for named European countries. After providing basic

portfolio details, buyers bid for coverage, unaware of who their competitors are or the amounts of the other bids. Swiss Re, however, can raise the minimum bid as offers go higher, giving cedants the opportunity to respond if another buyer threatens to outbid them.

Some companies stop short of selling coverage online--at least for now. General Reinsurance Co., for example, offers online search functions, claims and premium reporting, capacity to submit and quote rates for facultative risks, data and premium processing, and help for clients in building extranets. Zurich Re lets customers review the status of claims online.

Lloyd's, meanwhile, is working with the London-based International Underwriting Association on broad-based cooperation to develop common systems for electronic issuance of policies and processing of premiums and claims across the London market.

The ultimate online bazaar for reinsurance and commercial insurance may be the Catastrophe Risk Exchange, or Catex (www.catex.com), where buyers and sellers come together to swap complementary blocks of business to balance their portfolios--or to transact reinsurance on a more conventional basis. Catex, launched in 1995 when commercial use of the Internet was in its infancy, said that as of March 15,2000, it had facilitated more than 400 transactions involving some $1.8 billion of insured limits.

Francis X. Fortunato, chief executive officer of Catex, said his company was "in the right place at the right time" with technology that speeds the flow of information among participants. Catex can tie in with the proprietary Internet-based systems of insurers and reinsurers, and its latest version features extensible markup language, or XML, which allows access to the internal legacy systems of participants, he said.

Fortunato argued that the Catex system doesn't compromise underwriting but instead strengthens it by promoting the exchange of information; some 27,000 pages of documents in myriad formats have moved across the system since its launch. In this way, he said, underwriting controls "can be exported down to a midsized American business that may not even have a risk manager."

Brendan Noonan

Hartford: Early Entry, Teamwork Strategy

Hartford Insurance Group's development of e-commerce capability was no mere serendipity. The company developed the technology earlier than most, and it set in motion a creative approach that helped it to develop quickly and efficiently.

The Hartford, Conn.-based company's first Web site, www.itthartford.com, went online in November 1994, when the company was still owned by the IIT Corp. -- and when few people even knew the Internet existed. The site wasn't interactive, but it did offer a few links.

"We were really testing the waters," said spokeswoman Sue Honeyman. "It was all experimentation and trying to keep track of who was out there and who was watching it."

From the beginning, Hartford's executives declared a strategy to develop Internet capability, but they gave each business unit the freedom to find and develop the best way to achieve its objectives. "As a company, we made a substantial commitment to e-commerce," including a financial commitment, Honeyman said. "We have unit-specific organizations but also an umbrella organization that is responsible for implementing the corporate strategy." Under this arrangement, each unit is responsible for its own finances, she said.

In the past two or three years, the pace of development has quickened, and Web sites have become more sophisticated. The Hartford Group currently is doing business online in the following areas: standard commercial, larger accounts, small commercial, personallines agency, employee benefits, individual life and group pension. The company also has a site to conduct business with customers that came to it through a contract with the AARP, formerly known as the American Association of Retired Persons.

Honeyman could not say which part of the company is furthest along in Internet capability. "The company is so diverse, not only in business units, but in distribution channels," she said. "Each one is working to meet its own specific needs. It's not a race."

Many of Hartford's Web sites are for business-to-business activity, particularly for agents who want to see their accounts and conduct business electronically, Honeyman said. These sites are often part of extranet or intranet systems. E-mail also has made "a tremendous difference" in getting answers faster, she said.

To develop these sites, Hartford adopted a team approach to solving problems with technology. "We don't look at technology as an end in itself," Honeyman said. "We have tech and content people working together, and it has helped Hartford do business better, faster and more efficiently. It's not unique to Hartford, but we were one of the first insurance companies to take this approach. It's something we required of employees, and the buy-in came."

Ron Panko

Farmers Expands the Agent-Client Relationship

Farmers Group Inc. President and Chief Executive Officer Martin Feinstein uses a doctored line from the movie "Field of Dreams" to describe how Farmers views its online business plan: "In the Internet world, it's not true--you can build something and no one will come."

"We believe in forging personal relationships and giving advice on a local, face-to-face basis," Feinstein said. "By simply creating a rating engine to quote, you make auto and homeowners products strict commodities and unlink the need for the agent to provide advice to clients."

Farmers' program section on its Web site demonstrates this customer-service focus. It's the first service the No. 3 auto and homeowners insurer made available online for consumers. The site offers information on auto loans, mortgages, education loans and vacation programs.

To reach the Hispanic communities in its two largest markets--California and Texas--Farmers will move the Hispanic section on its Web site to a seperate site-www.farmersseguros.com. The site includes a calculator and claims reporting information in Spanish. "We're trying to look for market segments and realizing you have to develop communities of people, not just put up a shopping mall for quoting. In the long run, I think it will be a strategy that will win," Feinstein said.

Consumers this year will be able to visit www.farmersinsurance.com and file a claim, check the status of a bill or make a payment. But Farmers' 14,000 captive agents and independent agents still will be needed to provide consumers with quotes or complete policy sales. Research shows that consumers want to buy from someone they know and trust, the company said. "It's the trust issue we need to evaluate over the long term. It isn't a matter of selling mass quantities of insurance, it's really a matter of customer-relationship management," Feinstein said.

Farmers is moving its agents from its proprietary in-house system onto the Internet this year. Feinstein said Farmers did in 1994 what Allstate last year announced it would do--invest in technology and streamline staff to obtain operational efficiency. That change allowed agents to put information directly into Farmers' underwriting system, then to accounting and then to its two centers that print mass customized policies. "What used to take us 28 days now takes 1.2 days. In our auto book of business, about 86% of what's being done by agents at point of sales is going through the system and being issued without any human intervention," he said.

As part of Zurich Financial Services Inc., one of the largest international insurance companies, Farmers also is involved with building a global Internet platform. Zurich said the platform would allow its business units to increase distribution and provide customers with integrated solutions. The platform will function like grocery store shelves. Each of Zurich's companies worldwide will load the shelves with its products and use the Internet to market them, Feinstein said.

Farmers will use the platform as a first step in work-site marketing. It will distribute insurance through major employers using the Internet or company intranets.

"The key thing is the technology will create an exchange, a way for all of Zurich's companies to participate by putting products into a market, and we control the market," Feinstein said.

States Praised for Posting Consumer News on Web

State insurance regulators are doing a commendable job of providing consumer information on their Web pages, according to the Consumer Federation of America's chief insurance watchdog.

Bob Hunter, the federation's director of insurance and author of the federation's Web study, praised most state regulators for trying to get information to consumers on insurance, rates, companies and complaints over the Internet. He noted the newness of the technologies involved and the relatively brief time states have had to create Web pages.

At a briefing in Washington in March, Hunter said more than half of the U.S. population lives in 15 states that have excellent information posted online, and about 95% of the population resides in 40 states with good informational Web sites. Only 5% of U.S. citizens live in the 11 jurisdictions with poor or no Web-based information available to them from insurance regulators.

Hunter said Washington state has a "great" overall Web page with "hard-hitting" consumer information. Oregon and Wisconsin provide financial and market-conduct examinations online. New York is the first state to broadcast regulatory hearings over the Internet, while Texas does an excellent job of providing company profiles, he said.

Insurance regulators in Rhode Island, New Mexico and the District of Columbia don't have Web sites.

Len Famiglietti
COPYRIGHT 2000 A.M. Best Company, Inc.
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