By Tim Carpenter, Gomez, Inc.
Online access to insurance policies and self-service was traditionally the realm of non-agent-based firms, such as Progressive, that built their businesses on a direct sales model (with the Internet eventually becoming an immediate extension of the 800 number), and Esurance, which relies predominantly on the Internet channel for relationship management.
More recently, traditional insurance carriers have altered their relationship strategies, going to great lengths to enable online access to policy and billing information, as well as going to varying degrees to enable clients to make administrative changes to personal information and coverage levels.
Of the 16 P&C companies on the Gomez Q1 2003 Internet Insurance Carrier Scorecard that offer password-protected access to policy information and/or online payments, every one offers the ability to use its Web site to enroll for online access. Yet, there is significant differentiation regarding the timeliness with which customers can enroll and gain access to key functionality. Amica policyholders, for instance, can submit an enrollment request online but have to wait up to a week for log-in information to arrive via mail. Direct sellers Progressive and Esurance make online access to policy information and payment capabilities immediate and commensurate with the underwriting process for online buyers. They have been able to link the policy purchase and online policy management processes.
Traditional agent-affiliated carriers take a laddered approach, but none offer automatic enrollment for new policies, according to our Q1 2003 Scorecard. Allstate, Nationwide, Prudential and State Farm make additional accounts immediately available for Web access, but timeliness of online policy viewing varies by carrier. Of the eight carriers on our Scorecard that field significant captive agent forces, more than half currently allow policyholders to view auto policies online. Not all of these carriers provide immediate online enrollment, and of those that do, not all provide immediate access to policy information.While 80 percent of the captive agent-affiliated Scorecard carriers presenting policies online also provide immediate access to the password-protected area of the site upon enrollment, fewer than half provide instant access to policy information.
No doubt, traditional carriers are appeasing their agents by making policyholders pursue online enrollment on their own rather than via an automated policy purchase process, thus introducing them to a wealth of somewhat befuddling data before agents have had the opportunity to introduce themselves and the policies they represent.
Moreover, technical difficulties stand in the way. For example, State Farm's operations are distributed across 13 geographical zones, holding a client's respective policy details and account updates hostage to batch updating. Thus, the client's ability to react in real-time is severely limited. Specifically, while policyholders can gain immediate access to the secure area after enrolling, they must manually select the policies they desire to access and then wait 24 to 48 hours before they can view or make changes to their policies or pay their bills.
With these thoughts in mind, let's look at what traditional carriers are doing to keep agents and customers satisfied relative to the online enrollment process.
PROMOTE IMMEDIACY: Nationwide, for instance, makes a major site misstep by not touting instant online access to policy information. Customers only need to provide their policy and Social Security numbers to gain instant access to payment and policy viewing/changing functionality. Yet, any user would be hard-pressed to find and take advantage of it. Instant access is mentioned only in a buried press release or once the policyholder has already agreed to enroll online.
STRESS CONVENIENCE: State Farm reduces friction to enroll for online policy management by stressing time savings. On the home page and "register now" pages is language specific to the benefits of online policy management. While access to policy details is delayed, State Farm could improve messaging around immediate access to the secure area. Knowing that they will not have to wait up to a week for log-in information to arrive by mail will provide enough incentive for many to fulfill the online enrollment process.
INCLUDE THE AGENT: Allstate exhibits best practices by messaging everything from registration information to providing several options -- direct call back or an agent call -- to help customers complete the process. By including agents in the process, Allstate elevates the likelihood of seeing increased agent support of the online channel and, consequently, promotion of the online channel to its clients. Insurance customers have limited opportunities (e.g., an accident, an address or policy change, etc.) to interact with their P&C carriers or agents. Reducing obstacles to online services enrollment, while seemingly threatening to the agent's valued touch points, in fact promotes the underlying value of the online channel.
If deployed correctly, the online channel will better promote the agent's role in the relationship due to abundance of resources and services that can serve to provoke meaningful interactions between policyholders and agents, while creating efficiencies in agent administrative responsibilities.
Tim Carpenter is an analyst in financial services specializing in insurance and investments at Gomez, Inc., a Waltham, MA, provider of Internet benchmarking and advisory services. Learn more at www.gomez.com.