Hoping to leverage the lessons learned from other dot-com failures and the knowledge of its parent, Zurich North America subsidiary Financial Keyosk is hoping to succeed in Internet-based distribution of insurance products.
One way Carpentersville, IL-based Financial Keyosk (FK) believes it is different is that the venture is backing its Net-based technology with people. Chuck Hofvander, senior project manager, Financial Keyosk, contends, "We are different from other Web companies," such asInsurezone and Insurance-noodle, "because we back our online offering with knowledge about insurance and real live people." FK supports its Web distribution channel with licensed reps in call centers and with agents in bank branches, one of FK's primary distribution channels. Memphis-based Union Planters Bank recently signed a deal with FK to facilitate insurance sales in its branches.
Another segment FK is reaching is smaller agents who may not have access to larger carriers and do not have the ability to process "back-office tasks that some agents cannot afford," Hofvander adds.
Besides Zurich NA, FK product partners include Fortis, Kemper Insurance Companies, SAFECO and Principal Financial Group.
However, Matthew Josefowicz, insurance analyst at Celent Communications (New York), says that FK has a better chance for success if it chooses its partners wisely. "So far Financial Keyosk is just signing deals," he says. "They have some good backing, but to say they are successful is another thing. It depends whether the bank sees insurance as simply a sales opportunity or as a strategic imperative. If the bank is just looking to bring in a little extra money, those partnerships never seem to work out. Of the online banking-insurance alliances: The strategic focus of the deal is a core success factor."
FK's technology was initially developed by Empowered Software Solutions (ESS), a Burr Ridge, IL-based software developer with a focus on Microsoft technology and the .NET Framework. Now FK is moving towards internal development, says Hofvander. "It is about 50-50. For the first nine months ESS was the sole developer, but that is a costly relationship. Now we are more comfortable bringing employees on board."
Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio