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Breaking New Ground

Unitrin Direct heads into uncharted territory by establishing a virtual presence in Second Life to court Web-savvy consumers.

Seeking a new way to reach Internet-savvy consumers, Unitrin Direct, a subsidiary of Unitrin ($9 billion in assets), has established a presence in Second Life, the online virtual world that has been growing in popularity since mid-2006. The move makes the carrier the first auto insurance company to own a building in the Second Life realm, according to Unitrin Direct.

Unitrin Direct executives say they are hoping to interact with more customers who prefer to communicate with insurers via the Web through the virtual world. "We're very intrigued and pleased by the qualities of the customers who want to deal with us on the Web," explains Brian Crumbaker, the carrier's SVP of operations and claims. "This is another medium that affords us an opportunity [to reach them]." Inside Unitrin Direct's virtual skyscraper, a replica of its Chicago-based headquarters, visitors can view Unitrin commercials, visit with other customers and get instant auto insurance rate quotes via kiosks located inside the building that link to Unitrin Direct's Web site, Crumbaker notes.

"It is a way to tap into where the insurance market is growing," adds Tom Mercer, VP of marketing at Unitrin Direct. "Young people leave home or leave college and buy insurance for the first time -- this is an opportunity to reach those customers in the sorts of avenues they're using."

Within the 3D Second Life virtual world, which was created by Linden Lab (San Francisco), tens of thousands of users, controlling their virtual representations, known as avatars, can buy and sell land, products and services. Second Life's in-world currency, the Linden dollar, can be exchanged for real-world U.S. dollars.

The low costs associated with establishing an in-world presence makes Second Life a space worth exploring, says Craig Weber, a senior insurance analyst at Celent who is based in San Antonio. "They're in this uncharted world, literally, where it's not clear what the objective is or who goes there or what they like to do when they are there," he says, adding, "We're not talking about a big-dollar, splashy marketing program here."

A Low-Cost, Low-Risk Venture

The costs associated with setting up a corporate presence within Second Life are modest, confirms Jeff Silver, Unitrin Direct's director of marketing and the point person on the Second Life project. Land use fees, for example, are around $15 per month, he says.

According to Silver, the process of establishing a presence took only a month and a half, with help from Second Life consultants. An in-house graphic designer was involved in creating the virtual building. The in-world land, he continues, was purchased from another Second Life resident. "It was sort of humorous because the consultant who helped me find the land thought I was paying too much on a Linden dollar per-square-foot basis," Silver notes.

Unitrin Direct's Crumbaker says the carrier is "kicking the tires" with its initial foray into Second Life. "This really is dipping our toe in and seeing what kind of traffic we are going to get, what type of consumer actually goes in there and wants to deal with us, and how often they are willing to go to a kiosk and click through to our Web site," he says.

While Unitrin Direct does not have any plans to expand its Second Life presence, according to Crumbaker, a future opportunity could include positioning staff within the building to answer questions and offer insurance counseling. Celent's Weber, however, cautions that if insurers decide to go beyond basic brand-building efforts within Second Life to actually selling products and offering insurance counseling, they could run into compliance issues. "When a character goes from poking around to talking to an adviser in real-time," Weber explains, "obviously that has crossed a line between a fantasy world and a real world where regulations apply."

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