October 1 - 3, 2000, The Westin Providence, Providence, R.I.

The I-Road Ahead Paul Tinnirello, Senior vice president, A.M. Best Co. What a difference an Internet year makes.

E-Commerce: Technology Issues Converge With Business Concerns
By David Hilgen, David.Hilgen@ambest.com

Insurers must pursue an e-commerce strategy that anticipates the convergence of technology issues with business, cultural and staffing issues to succeed online, Paul Tinnirello, A.M. Best Co. senior vice president, said.

Speaking at an insurance conference here, Paul Tinnirello, senior vice president of Best's Information Services Division, warned attendees that they will face an ongoing struggle to keep up with ever-evolving technology.

"Even what I tell you right now is going to change five minutes from now," he said.

Tinnirello was the closing speaker at "E-Fusion: Where Insurance and Technology Converge," a conference sponsored by A.M. Best Co. held Oct. 1-3 in Providence, R.I. Full coverage of the event is available online at http://www.ambest.com/e-fusion.html.

Among the cultural issues that insurers must address are online-privacy concerns, Internet trends and habits of Web surfers. Staffing issues include obtaining the best employees, with business and technology backgrounds, who can help cultivate the company's vision. "There is no one person who can provide a vision for a company," he said.

Tinnirello offered a view of the future of e-commerce that was both frightening and refreshing. He offered findings from various studies that indicate e-commerce will make quantum leaps in the coming years, but many businesses are unprepared for that growth. For example:

• only 13% of the estimated 2.3 million small businesses have the ability to facilitate e-commerce;

• about 106 million U.S. adults, or 53% of the adult population, are connected to the Internet;

• e-commerce will be almost 5% of the U.S. gross domestic product by 2002; and

• by 2003, $4 billion of insurance will be sold online in the United States.

Tinnirello said insurers must establish a comfortable stride in the race to be online. Insurers traditionally have been slower than other financial-services companies to offer products and services on the Web.

"Many companies are jumping ahead so that they are getting to the party early," he said.

The "I-road ahead" also is fraught with many legal roadblocks, including protecting rights to intellectual property and Web sites that are established to criticize businesses, Tinnirello said.