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Monday, November 16th
"Insurers Share e-Commerce Lessons"By Leslie Werstein Hann
Thinking it would be the leader of the inevitable pack, Liberty Financial secured its site with digital certificates, a device for verifying the identify of the consumer and the authenticity of the site. Now only 15%-20% of brokers and consumers doing business with Liberty over the Internet use the certificates. The rest use the less-secure method of typing in a user identification and password. "We were going to use digital certificates to make it so secure that they couldn't get on the site," said Jeremy C. Jaffe, head of electronic commerce for Liberty Financial, Boston. "It's the most secure thing out there, but people don't want it." That was one of the e-commerce lessons that Jaffe presented Monday at "Fulfilling the e-Promise," A.M. Best Co.'s Annual Insurance Information Conference in Boston. While one of the main objectives of e-commerce is reducing the cost of doing business, Zurich Kemper Life Insurance Co., Long Grove, Ill., found that the opposite was true, said Tracey R. Witte, director of e-commerce for Zurich Kemper Life Insurance Co., Long Grove, Ill. Consumers were submitting online applications, but the price, process and commission for the policy was the same. Getting the online application into the traditional process added steps and costs. "The back-end process must be redesigned," Witte said. Sometime next year, Zurich Kemper plans to release a life insurance product that will be sold and serviced entirely on the Internet. Other themes struck by both speakers included the importance of having an evolving Internet strategy; the need to get sustained commitments for e-commerce initiatives from top management; the need to provide value so people return to the site; the need to work closely with business units; and the difficulty of measuring the results of a web site. Liberty Financial found that few customers rely exclusively on the Internet. "Customers are multichannel," he said. The role of customer service representatives has changed as a result. Customers now call with more meaningful questions, rather than mundane requests for account values, Jaffe said. In addition, customer service representatives are expected to provide technical support for the company's Internet functions. The Internet has raised customers' expectations for more information faster, Jaffe said. If the closing price of a mutual fund isn't on the web site by 6. or 6:30 p.m., "they call and scream at us," he said. In fact, there is a growing demand for mid-day prices. "Expectations keep increasing exponentially," he said. Speedy access also weakens the shields that traditionally protected companies from customer anger when something failed. The time it took to write a letter and receive a response gave them time to cool off. "We can now 'tick off' a customer 7 by 24," which means seven days a week, 24 hours a day," Jaffe said. The Internet also allows companies to reach new customers, but Liberty Financial is still trying to figure out if they are the right customers, Jaffe said. The first Internet shoppers tended to shop every year, which costs the insurer money. In fact, attracting new customers is only a secondary objective for Liberty Financial, Jaffe said. The first is retaining existing customers and improving relationships with them. Zurich Kemper learned the hard way that despite the desire for content, too much content can be a bad thing because of the difficulty keeping it up to date. "My mantra now is less is better than wrong," Witte said. Other challenges include integrating different technologies, such as call centers, Internet, extranet, intranet and data warehouse, which Zurich Kemper hopes to do next year. Competing technologies are some of the other issues meeting the sometimes conflicting needs of disparate business units, she said. The expectations of business units that realize the benefits of the Internet are running high, as are the expectations of consumers, she said. Clients who apply online no longer ask if they can access their account online, "they ask where," Witte said. |
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When consumers said security was an important consideration for
doing business on the Internet, Liberty Financial Cos. Inc. listened.