Much of the insurance industry relies on agents: the so-called captive sales agents who are committed to one insurance company, or independent agents who sell products from several insurance companies. Determining their role in e-commerce can be a major organizational hurdle.
"The insurance carriers are held hostage by the brokers and agent channels because they are the ones that own the customer relationship," says Mitch Bishop, vice president of corporate marketing at ChannelPoint, an insurance technology providers.
Dealing with the insurance industry's existing technology is another formidable hurdle to clear. The industry's technical woes are connected, ironically, to its history as an innovator: Some of the first big users of workhorse computers were insurance companies. But as insurance companies added new products, they simply added new and often incompatible proprietary systems, explains Irwin, and many use data structures that are obsolete.
"It's very difficult for these companies to get a unified customer view," Irwin says.
And Web customers expect a unified view, such as an up-to-date record of all the products and services they've purchased or claims they've made.
So it's not surprising thatt major insurance companies are just now taking their Web sites a few tentative steps beyond brochureware. A few are even making inroads and leading the way for the industry.
Consider the efforts of New York Life Insurance. A "vision committee" representing the company's key business areas last year suggested a "defend-and-enhance" approach to the Internet. The idea is to use the Internet to help communicate with and train agents, plus make it easier for them to serve customers, says Mike Mazzariello, the company's chief technology officer.
"We have one primary distribution channel, and it's our agent channel," Mazzariello says. "We can't afford to jeopardize that sales force in any way."
So far the plan has translated into providing Web pages for agents at a cost of $100 for site design and $20 per month for maintenance, and costs can be covered by the agents' marketing allowance.
Another major move was Allstate Insurance's November announcement that it would turn to call centers and the Internet to "leverage the local presence of its more than 15,200-strong captive agency sales force," and plans to reduce current expenses by $600 million annually to fund these efforts, according to company officials.
Several business models are emerging. Some carriers already sell directly to customers via call centers, such as Progressive Casualty Insurance, in Mayfield Village, Ohio. There are also financial services companies such as Citigroup, in New York, that include insurance in the portfolio of products they sell online.