Alongside these more established efforts are emerging marketplaces or portals, such as InsWeb; Insuremarket from Intuit, in Mountain View, Calif.; and Quotesmith.com, in Darien, Ill. These insurance portals let buyers do comparison shopping, and they accept applications online and forward them to the carriers. In addition, there are pure Internet players, such as eCoverage.
Several different models may succeed, analysts say. But one thing seems clear, Irwin says: The old way of doing business won't survive untouched.
"Selling vertically, [such as] a MetLife agent selling only MetLife products [face-to-face] is dead," Irwin says.
To succeed in the Web game, Irwin adds, insurance companies have to "recognize that they have no choice and be willing to spend money." Then they must tailor a specific value-proposition for their customers that is different from what they do in the physical world.
Although the Web-savvy start-ups that have heated up the Internet race in the insurance industry may have the upper hand initially, the traditional big names in the business that learn to leverage the Internet may come out on top. That's because they come to the market with two powerful advantages: treasure troves of customer data and a well-accepted brand name, Eyler says.
"The big losers will be the companies that can't overcome channel conflict, and sit on their hands," Elyer says.