Self-Service Functionality, e-document Delivery Distinguishes Leading Carriers

By Greg Davies & Tim Carpenter, Gomez Inc.

Progressive Insurance earned the top overall ranking in the Gomez Q2 Internet Insurance Carrier Scorecard, marking its sixth consecutive first-place finish. Since our review last fall, Progressive has extended its lead by continuing to invest aggressively in improving the functionality and usability of its consumer-facing Web interface.

One of Progressive's major accomplishments is improved integration between its front-end Web offering and back-end call center and CRM systems. Reflecting an industry-wide effort to provide a more seamless transition between online-initiated but offline-completed purchase transactions, Progressive now allows its phone representatives to access prospects' incomplete online quote forms in real-time. Consumers who are unable or unwilling to complete a quote request via the Web can thus pick up right where they left off via the telephone.

Other key online enhancements detected by our Scorecard research include:

** State Farm Insurance added a new life insurance policy management area, a robust selection of decision support tools and content, online premium payments and bill presentment, and a new site for Canadian policyholders.

** Nationwide continued to improve the usability of its site in both the public and secure areas. Enhancements include self-populating forms, more expansive summaries and histories, a greater range of insurance documents, and greater educational content.

** Prudential Insurance beefed up its auto policy access by providing enhanced policy change functionality and online premium payment capabilities.

** GMAC's direct auto offering, gmac123.com, debuted on the Scorecard with an11th-place finish, showing particular strength in the ease-of-use category. The site's highlights include online binding in 21 states, automatic enrollment for online access, end-to-end endorsement requests, and electronic document delivery, complete with discount incentives.

Here are a few of the key industry themes driving Gomez's Q2 Scorecard rankings:

** Policyholder self-service grows in importance. As noted in our recent research report "Policyholder Self-Service: Increasing Awareness and Driving Adoption," a growing number of online policyholders are turning to the Web for service-related activities such as premium payments, policy/coverage inquiries, endorsement requests, or claims-related tasks. Specifically, 13.2 percent of general Web users (GWUs) with auto insurance have visited their insurance company or agents' Web sites and tried to use the Internet to access information on their policies and/or tried to perform customer service tasks. Roughly half of this latter group was successful in completing their desired service task online, while approximately half were not.

Firms such as Progressive, Esurance, Nationwide, Allstate, and GEICO, all of which provide near-immediate access to key self-service functionality, benefited in this Scorecard ranking, which takes into account the increasing importance of such facilities.

** Electronic document delivery gains favor. Insurance, as an industry, rarely leads other financial service verticals in developing online functionality. One area, however, where insurance is leading nearly every other retail financial service industry is the online delivery of customer and account-specific documents.

Currently, 21 percent of Scorecard carriers provide policyholders with the option to receive their policy documents electronically and discontinue receipt of paper documents via US mail. Direct online auto veterans Esurance, GEICO, Progressive and GMAC all currently support this functionality, often including pricing incentives. GMAC provides a best-practice example, allowing policyholders to use e-signatures to initiate immediate endorsement requests for all policy changes requiring no offline authorization.

** Despite the uptick in self-service activity, the lion's share of consumers' online insurance behavior still involves purchase-process tasks. When we drill down on the types of vehicle insurance-related activities consumers are performing online we still see tasks relating to a policy purchase or renewal topping the list. Another recent report, "Online Vehicle Insurance, Reevaluating Purchase behavior," found, for instance, that nearly one in six (14.3 percent) of GWUs turned to the Internet the last time they sought to purchase or renew their personal vehicle insurance policies. Thus, when seeking to position limited Web-spend for maximum impact—and interpret the results of the Scorecard—insurers should keep in mind that the most important tasks to facilitate seamlessly for today's online users are those relating to a purchase (quotes, applications, etc.).

Our Q2 Scorecard finds Progressive again leading the pack by offering an easy to use, online-offline integrated quote, application, and purchase process. Additionally, Progressive, Allstate, Nationwide and other top Scorecard firms have made significant strides in Web-enabling customer service functionality to capitalize on consumers' growing adoption of these features.

Yet considering that roughly half of today's online self service attempters used the Web the last time they purchased or renewed their auto policies, it's clear that insurers must continue to improve prospective customers' experience during the online quote process. These efforts will pay off by enabling insurers to capitalize on future opportunities to drive policyholders to the lower-cost online service channel.

Greg Davies is a senior insurance industry analyst with Gomez, Inc., an Internet quality research and advisory services firm in Waltham, MA. He can be reached at [email protected]. Tim Carpenter is a research analyst with Gomez and can be reached at [email protected]