Taking insurance products that fit into the large national risk market and shrinking them to fit the small-to-middle market is not as simple as putting them on the Atkins diet. But ACE USA (Philadelphia), the U.S.-based retail operating division of The ACE Group of Companies ($49.5 billion in assets), is creating a new unit, ACEONLINE, that it says will focus on transforming products that have been sold to the large market and making them affordable for small and midsize organizations.
The miracle pill in this case is the Web. "Distributing products on the Web is a way to get them to the smaller market efficiently, with pricing that people are accustomed to seeing," says John Herbkersman, senior vice president of communications, ACE USA.
ACEONLINE offers Internet-based distribution of two of ACE USA's existing online products - workers' compensation through ACEComplete and the underwriting facility for storage tank liability through ACE TankSafe - with a number of new products currently in development, according to Mark Benson, president of ACEONLINE. ACE is building the technology for this initiative through what it considers internal resources, although it is working with IBM on the project. ACE USA is in a long-term technology contract with IBM, which is designing the Web site technology.
Finding the Right Formula
ACE is carefully considering which of its large-market products will fit the ACEONLINE product line next. "Right now we are talking to our business units about which products they'd like to see online and then coordinating with agents to prioritize," Benson says. ACEONLINE allows agents to access the ACE products that are currently available, as well as those that are being developed for future online use.
By developing a constructive formula of products, ACEONLINE is building a complementary package. "In essence, we're going to weave the products together so that if you are buying one, you are essentially buying more than one product," Benson explains.
Some might wonder why a company that already has a strong base in the large national market is moving toward smaller products. But, Benson says, "ACE's primary customer has been the large account broker, so growth in the future is going to be somewhat dependent on the regional to local broker production base. We are putting together something that is useful to that segment of the market."