Home, Life, Auto, Click: Insurers Vie for Web Customers

Isolated bare-bones sites have put insurers behind their competitors on the Web. To catch up and attract customers, insurers need to add features, secure screen space on high-traffic sites, and connect to offline channels.

By Gil Irwin, Paul Lockmiller, and Larry Altman

Insurance companies haven't kept up with Internet innovations or the online needs of their customers. Although some have succeeded in building site traffic with such basic tools as account-tracking, most insurers remain far behind banks and brokerages — many of which now market insurance on their Web sites.

The fourth-annual Booz-Allen & Hamilton eInsurance study surveyed top insurance carriers and financial institutions and intermediaries, reviewed 206 financial-services Web sites, and analyzed Internet usage data from Nielsen//NetRatings Inc. The survey found:

• The top 10 insurance sites attracted only 5 million unique monthly visitors — far fewer than the top 10 brokerage sites, which attracted 10 million unique monthly visitors, and the top 10 banking sites, which attracted 18 million unique monthly visitors.
  
  
• Visitors spent an average of only 13 minutes on insurance sites (those selling auto, homeowners, renters, and term life policies). This compares with an average of 22 minutes on bank sites and 36 minutes on brokerage sites.
  
  
• Insurers like Nationwide Mutual Insurance Company and Prudential Insurance Company, whose Web sites offer a range of financial services, attracted about 3.2 monthly visits per person. But insurers whose Web sites focused exclusively on insurance attracted about 1.2 monthly visits per person.

In mid-2000, the top 10 insurance Web sites surveyed by Booz-Allen & Hamilton attracted 5 million unique visitors monthly compared with 10 million for brokerage sites and 18 million for bank sites.

The Web is a natural channel for information-intensive businesses like financial services. Transactions are convenient, fast, and relatively secure, so it makes sense for insurers to enhance their online presence. However, because insurers hear from their policyholders only when major life events happen — births, new car purchases, illnesses, retirements — their challenge is to build the Web site traffic necessary to attract and retain customers. Otherwise they risk losing business to banks and brokerages, which interact with their customers far more regularly (weekly, daily, or even hourly) and can therefore get their marketing message in front of customers far more often.

As insurers attract more traffic to their sites, they will learn more about their customers' identities and needs. Insurers that integrate their sites with other channels (e.g., agents, call centers, branch offices) can effectively use that knowledge. By pooling information, the channels can create and share detailed profiles of customers — their policies, personal details, future needs, previous contacts with the company — that can be a valuable resource for sales and service agents anywhere. When a major life event hits, customers' needs can be met through the Web or other channels, building confidence in the insurer's products and service.

If high-transaction banks and brokerages can market insurance, why shouldn't insurance companies market other financial services?

Tips to Get More Clicks
Insurance sites have improved slowly since the first Booz-Allen eInsurance survey in 1997, when most sites were no more than online brochures listing agents and describing products. By 1999, 14 percent of the sites surveyed had some advanced features such as account-viewing and claims-tracking; that number rose to 43 percent in 2001. Interactive customer-specific features draw visitors, and alliances with other sites give insurance companies more visibility on the Web. The latest eInsurance survey found three strategies can help insurers thrive on the Web:

• Give customers more reasons to visit your site. Fewer than 50 percent of insurance sites let consumers view their accounts online — a basic feature of banks and brokerage sites. Insurers should add account access as well as tools that let customers resolve problems, get quotes, and report and track claims. Room for improvement is ample, since huge gaps separate what customers expect from insurers and what they get. Whereas 86 percent of survey respondents said that customers want online transaction processing, fewer than 30 percent of insurance sites offer this service. Customer support is also lagging. In a test of 50 insurance sites, an embarrassing 54 percent did not respond to an e-mailed question within one day; an astonishing 28 percent did not respond at all.
  
  
• Expand beyond your core products. If high-transaction banks and brokerages can market insurance, why shouldn't insurance companies market other financial services? Almost 20 percent of survey respondents have formed partnerships with other companies so they can add non-insurance products to their online offerings. For instance, Nationwide Mutual's site offers in-house mutual funds and group pensions, and Prudential's site markets investment and even real-estate services.
  
  
• Ally with high-traffic financial sites. Cross-marketing can work both ways, and some insurers use alliances to grab virtual shelf space beyond their own sites. For example, American International Group auto insurance has a presence on the Wells Fargo & Company banking site. Companies like Wells Fargo want to increase their range of offerings by marketing insurance, but they don't want to own and operate an insurance company. Hence, an alliance to distribute another company's products appeals to them. Insurers who find the right partners can find spots on sites run by banks, brokerages, account aggregators, and comparison-shopping marketplaces such as Insweb. The eInsurance survey revealed that 59 percent of the surveyed executives have formed partnerships to expand distribution. However, insurers with little alliance experience could find this approach challenging; only 30 percent of respondents said they have the skills needed to manage partnerships.

Increased site traffic does little good if customer data is not coordinated across channels. The first insurance companies to integrate internal systems with external channels will reap huge rewards.

Crossing the Channel
Increased site traffic does little good if Web-generated customer data cannot move to other channels, or if customers cannot easily speak directly with an agent or buy an annuity offline. Insurers need to integrate their internal systems and external channels so information flows across them. Internally, integration means that companies can collect and analyze all relevant customer details and share them among marketing, underwriting, and customer service departments. Externally, it means that customers will find that every company representative has the relevant details on hand during every contact.

But integration is hard. Only 15 percent of respondents said they can track a customer's activities across channels. A little more than half of the insurers have tied their Web sites into their back-office systems, a requirement for online sales and servicing.

To harmonize the Web with other channels, insurers should focus on three areas, in this order:

• Customers. Find out what your customers want. They may prefer one channel over another for specific types of transactions, or for stages of a single transaction. This is typical behavior when people buy financial products. For instance, most customers for financial planning services want to start the relationship with an in-person meeting, whereas follow-up communication involves e-mail, phone, and face-to-face contacts, according to a 2000 Booz-Allen survey.
  
  
• Profitability. Use the profit potential of customers to guide your decisions about how and when to offer particular features. Aim the most costly services at the customers with the greatest profit potential. For example, profitable customers, with several life insurance policies and mutual-fund investments, could be offered free in-person meetings with a financial planner. Less profitable customers, with a single life-insurance policy, may only be offered access to an online planning calculator.
  
  
• Technology. Once you understand customers' needs and economic value, then tie together your current and developing IT systems so they work across divisions, alliances, products, and channels.

Insurers should bring their sites and systems in line with those of leading financial-services companies. The effort will pay off because the first companies to get integration right will reap huge financial rewards. Real integration may take five years to happen, but it is coming. Insurers who build and integrate useful sites will give visitors a reason to stop and stay, rather than move on to a more attractive destination.

The authors would like to acknowledge the participation of Giridhar Rao and Christina Casanova in this project.

Human brain in the workplace

Human brain in the workplace

NEW YORK: The modern workplace is an emotionally charged landscape of constant threats and unconscious fears that can addle or even destroy our brainpower, according to three recent books on neuroscience, says a Reuters report on Nov 4.

The flow of brain chemicals triggered by common workplace experiences -- feedback session, anyone? -- can erode our ability to think straight, harming productivity and diminishing our capacity to solve problems or work well with others.

Yet when approached with greater regard for how our brain operates, work can also be a deeply rewarding, creative experience. Getting there, though, may require ditching some of our more counterproductive work habits, the authors say.

"One of the things organizations need to do is respect the deeply social nature of the brain. People are not rational, they are social," David Rock, author of "Your Brain at Work" (HarperBusiness), told Reuters in an interview. "The social brain is such that we are really driven to increase social rewards, and we are really driven to minimize social threats."

Rock, the founder of a company that applies the insights of brain science to leadership coaching, lists five areas in which our brain's threat mechanisms are easily triggered at work: status, certainty, autonomy, relatedness and fairness.

When we feel threatened in any of these spheres -- a superior displays power over us, rumors circulate about the future of our job, our work is micro-managed, we are excluded from colleagues' conversations, or our work is unjustly overlooked -- our brains focus our attention on the threat.

In doing so, the brain diverts scarce resources away from the prefrontal cortex (PFC), the area we use to set goals, make plans, control impulses, solve problems, visualize the unknown and think creatively -- in short, the part of our brain we use to do good work.

The PFC is the seat of our conscious thinking. Deprive it of fuel, and we make mistakes, lose our train of thought, forget key information, miss patterns and waste time. Productivity falls, and so does job satisfaction.

How can we work more effectively with the brain? Rock has some suggestions, as do the four authors of "The Brain Advantage" (Prometheus Books), Madeleine Van Hecke, Lisa Callahan, Brad Kolar and Ken Paller, and Charles Jacobs, the author of "Management Rewired" (Portfolio).

-- Become more "mindful" of what our brains are doing:

Whether we are leading teams or taking orders from above, it helps to recognize when our brains, and other people's, are perceiving threats, so we can regulate our reactions.

Acknowledging our emotions -- "I am getting angry/scared/indignant" -- helps us to think before we react rashly. One study shows we generally have 0.2 second to veto an impulse after it emerges from the unconscious.

-- Find the right level of stress:

A little stress is good for most people, but studies show a high level of stress-related chemicals such as cortisol and adrenaline can kill existing neurons, and stop the growth of new neurons in the hippocampus, which is important for forming memories. Better emotional self-regulation helps, as do talking things over with friends, and physical activity.

-- Find better ways of giving and receiving feedback:

Offering even constructive feedback, let alone punishment for poor performance, can serve to underline the "alpha" status of the giver, writes Jacobs. Organizations that want people to learn should avoid cookie-cutter, depersonalized approaches to feedback, explore more self-appraisal by individuals and teams, ask questions rather than give answers, and strip as much status-threat as they can from the process.

-- Arrange work around the brain's energy levels:

Studies show doing more than one attention-rich task at a time decreases accuracy and performance, and memory starts to degrade when we hold more than one thing at once in our minds.

Whenever possible, we should carve out blocks of time, away from phones and e-mail, for different kinds of thinking. Wading through e-mails while seeking inspiration is a bad idea.

We can only do a few hours of high-grade, conscious thinking in a day -- we should know when our brain does it, and not fill that time with low-grade tasks that can be done when we are tired or low on energy. Prioritizing is key.

-- Build a virtuous circle. Help colleagues feel safe in those key areas defined by Rock: status, certainty, autonomy, relatedness and fairness. - Reuters

Zonked

Everything in slowmo, and I am suddenly agreeable to everything... or am I just nodding off. Crap! Need either a coffee or rest of the day off.

Hell 0 world!