Esurance: The Differences Between E-Commerce Companies and Insurance Companies

The night before Esurance CIO Phil Swift teamed with his colleague, director of systems engineering Deepak Srinivasan, to deliver the opening presentation of the 2009 Insurance & Technology Executive Summit, he told me that one of his big picture goals was to get Esurance to operate and think of itself more as an e-commerce company and less as a traditional insurance company.The notion was interesting to me because, at a macro level, I was easily able to wrap my head around the differences between the two approaches. However, I had trouble when I searched for specifics. In my head, there were differences between an e-commerce company and a traditional insurance company and the way each operates and approaches technology, but the differences were visceral. When it came down to details such as how each handled business models, project management, IT decision making and establishing business goals, I found it difficult to put the approaches of insurance companies in one column and the approaches of e-commerce companies in another.

In their presentation, entitled "Customers Versus Costs: Negotiating the Balance Between Service and Efficiency," Swift and Srinivasan laid out Esurance's approach to technology and innovation. Based on their presentation, I'd have to say that the most important technology virtue at the San Francisco-based carrier is flexibility. Swift described the carrier's project management strategy as a flexible process and one that allowed high-impact projects to jump to the top of the queue as priorities shifted.

This was most evident when the economic crisis hit last fall and Esurance's business goals shifted from growth to loss ratios, profitability and conversion rates, Swift said.

In addition, Srinivasan noted how the company was flexible and able to move quickly when it discovered in 2008 that its JD Power customer service rankings compared unfavorably to its competitors. The carrier responded quickly by prioritizing several customer service-related IT projects. By April 2009, those projects were delivered. In the most recent JD Power report, Esurance showed marked improved, moving to the middle of rankings with regard to its competition.

The question that I have is: Is flexibility and the value a company places upon it what differentiates an e-commerce company from an insurance company? It seems to be something that Esurance, an organization that fashions itself as an e-commerce company, values highly. However, it's also something that most traditional insurance carrier CIOs value as well. Perhaps what we're really talking about here isn't a specific e-commerce strategy compared to a specific insurance carrier strategy. Maybe this is just a case of two different states of mind.