LIFE INSURERS' EXTRANETS FOR AGENTS MISS THE MARK

In this age where measuring IT success and returns on IT investment is a priority, most life insurance carriers do not measure traffic, ROI or even know how many agents are actually using their agent extranets, according to a report from Forester Research.

"Carriers are overestimating the usage of their agent extranets," says Todd Eyler, senior analyst, financial services at Forrester, and author of the report, "Insurers: Turn Extranets Into Sales Pipelines." Adds Eyler, "The truth is, they can't measure usage and they don't know if it is a few agents using the extranet frequently, or many agents using it occasionally."

For instance, according to Forrester's study, carriers believe that more than 50 percent of their agents use their extranets, but admit that agent call center volumes have only decreased by 10 percent. "Half of the carriers couldn't tell us whether their extranets have reduced phone contacts," the study reported.

"With most carriers 56 percent expecting to increase spending on extranets in the next two years, having some sort of ROI metrics is very important," Eyler says. "I'm very surprised. Right now, carriers are living in a cloud when it comes to determining ROI" for their agent extranets.

The lack of metrics for agent extranets is confusing carriers' priorities. Sixty-one percent of carriers complain that prioritizing extranet spending is a major obstacle. This is not surprising, according to the study, since only 17 percent of carriers use agent productivity as a way to measure their extranets' success and only 44 percent measure cost savings and ROI.

Also, points out Eyler, many carriers' extranets are designed with a carrier focus, rather than a customer or agent focus. "Most carriers to not take an agent point of view with their extranets," he says. "Agents are interested in writing new business and generating commissions. Most carriers' extranets are focused on offloading administrative functions to the agents. There is a major disconnect." Also, carriers are collectively hurting themselves by each generating separate extranets--forcing independent agents to learn many different interfaces and in turn making agents even less likely to use any extranet product, adds Eyler.

For instance, Forrester's research found that two-thirds of carriers force agents to log on separately to access functionality and re-key data for different products. Furthermore, most carriers don't integrate their extranets with agents' e-mail, contact management, financial planning, and accounting systems, forcing additional re-keying and making it difficult to keep customer data synchronized, according to the study. Also, most carriers' extranets ignore brokerage general agents (BGAs), a group that recruits and manages the independent producers who generate the majority of new business, according to the report.

Forrester recommends that life insurers improve their extranets by providing user-friendly BGA functionality to process agent appointments in a timely fashion; standardize new business interfaces for running quotes, illustrations and forms; and allow BGAs to receive frequent updates on all aspects of the policy lifecycle.

To receive a copy of the "Insurers: Turn Extranets Into Sales Pipelines" report, contact Forrester Research at www.forrester.com or 617-613-6000.

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