Old Mutual's Click-and-Mortar

Apparently learning from the expensive failures of many Internet-based insurance ventures, a number of carriers are launching their own direct selling, partially Web-based operations.

However, unlike some of the recent failures, the new breed of insurer is not using a B2C model. Americom Life and Annuity Insurance Co. (Overland Park, KS), a fixed- and equity-indexed annuity and life insurance company that is a wholly owned subsidiary of Old Mutual plc ($265 billion in assets), recently opened its first regional sales center in Seattle.

Modern Technology

Americom Life will use the Internet and call centers to generate business by selling directly through independent agents.

"Americom Life is the company our competitors would build if they could start from scratch," says Joe Sulzinger, national sales director, Americom Life. "We can use the Web the way it was intended to be used for independent agents: to deliver marketing materials instantly, to check the status of cases...and immediately deliver policies via email." Americom Life will also distribute producers' commissions using electronic fund transfer on the same day a policy is issued.

"All of the technology we are using already existed," says Jim Morrison, chief marketing officer, Americom Life. "There are plenty of vendors out there offering products to complete the entire transaction. Unlike other traditional companies, we started on day one with the new technology so we didn't have to worry about legacy system complications."

Americom Life has assembled a host of products to complete the entire insurance process electronically. The policy administration system is run by Transaction Application Group, a Lincoln, NE-based insurance services company. COSS Development (Mequon, WI) is providing sales support and Web applications. Wire transfers are routed through Bank of America (Charlotte, NC). MAAS (Mid America Agency Systems, Inc., Omaha) provides underwriting expertise.

For appointing agents, Americom Life is utilizing Innovative IT's (Lansing, MI) Sircon products. Cosmos, a subset of Sircon, allows agents to link directly with the agent database at the various state insurance departments in which Americom Life is licensed.

The resulting technology makes the process smooth and efficient for Americom Life's agent, Morrison claims. For instance, "An agent can fill out the data page through the agent appointment system and can get the confirmation of licensing within 14 seconds," according to Morrison.

Change the Mindset

The only challenge, Morrison says, is changing traditional processes. "The technology challenges are already solved. You have to change the mindset," he says. "It is taking a lot of retraining to get people to accept the technology."

The new insurer will sell policies initially in 44 states, and plans to sell nationwide by the end of 2001, he reports. "Old Mutual purchased Unified Life Insurance Company in March," Morrison says. "Old Mutual never had an active presence selling life products. It gave us an immediate presence. However, there are still a number of legal hoops."

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