Make Sites Stickier, Pursue Partnerships, E-Biz Study Advises Insurers

Having yielded the unsurprising result that insurance Web sites trail behind bank and brokerage sites in terms of unique visits per month and visit duration, Booz-Allen & Hamilton's (BAH, New York) 2001 eInsurance Study notes an "explosive growth" in insurance Web site activity and points to ways carriers can maximize their e-commerce efforts through making sites stickier and building partnerships with online distributors.

The study's findings on insurance sites' performance-both against one another and and with respect to their financial services competitors-are based on BAH's analysis of Neilsen/NetRatings Internet usage data, as well as findings from the analyst's survey of top insurance carriers, financial institutions and intermediaries, plus reviews of more than 200 Web sites of insurers, banks, brokerages and online intermediaries.

Among the performance disparities between insurance sites and their financial services counterparts reported in the study are that the top 10 insurance sites were visited by 5 million unique users in April 2000, while the top 10 bank sites had 18.2 million and the top 10 brokerage sites hosted 11.1 million. Insurance sites also demonstrated significantly less stickiness, gripping visitors for an average of 13 minutes per month, as compared to 22 minutes for bank sites, and 35 for brokerage. Nevertheless, the study reports an 1,150 percent rise in insurance site traffic from April 1999 to April 2000.

The study's findings reinforce the conventional wisdom that "insurance Web sites are not inherently as interesting as your brokerage account or even your bank account," according to Paul Lockmiller, principal, insurance practice, BAH. This is due fundamentally to the differences between insurance and other financial services products, Lockmiller says, "But it's still not good news. It means that insurance has to work harder to get traffic than other industries, and that partnerships are going to be more important."

One of the key ways to increase traffic at insurance Web sites will be to give customers more reasons to log-on to a carrier's site, according to Lockmiller. This includes broadening product offerings, but also providing various types of functionality corresponding to the pre-sale, sale and post-sale phases of customer interaction, he adds. "You've got very few chances for interaction, so you have to make the most of every touch point you have with the customer. If you're going to be a pure manufacturer, you better have rich content: It better be easy to use, provide a lot of good education, and it better have a quote engine, which customers really want."

Support for online sales is one area where mature technology gives insurers an opportunity to score, Lockmiller says. "Insurance companies could do better with things like instant messaging through an agent, audio collaboration or automatic call-back."

But since consumers are just plain unlikely to spend as much time at insurance Web sites as they do elsewhere online, insurers can benefit from having a presence on sites with higher traffic. "We think that companies intent on online sales need to be partnering with online distributors, be they bank or brokerage sites or a Web-only sales-oriented site," says Lockmiller. However, such sites do not have unlimited "shelf space," he adds. "As the Web continues to grow and become a more important distribution channel, it's going to become more important for insurance companies to find partnerships-and not all of them will."

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio