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

Pursuing the Multiplatform E-Commerce Strategy Johan Troskie, chief executive officer, Netcover.com

New Distribution Channels Multiply the Possibilities
By Brendan Noonan, noonanb@ambest.com

South Africa's largest Internet insurance provider has learned the importance of some relatively old-fashioned technology, even as it strives to reach customers through a variety of cutting-edge vehicles--not only online, but via their mobile phones and interactive television.

The rate at which quotes were converted to policies increased fivefold when Netcover.com added a call center for customers to finish by telephone what they started online, said Johan Troskie, the company's chief executive. The call center also is the only way to get quotes from two of the four insurers Netcover represents.

Netcover.com has deployed an array of technology to make the two connections necessary for its business. To bring customers in, it offers a Web site where the entire insurance transaction can be completed online. But insurance buyers also can make their initial contact via interactive TV, getting an estimated quote, or via mobile phones that use the wireless application protocol, or WAP. In the latter instance, for example, a customer buying a car could contact Netcover from the dealership via a WAP phone, get a rough quote, then speak with a representative to bind coverage.

The Web site puts "all the control in the client's hands," including tracking claims and scheduling appointments with adjusters in the event of a loss, Troskie said. A customer can ask to have updates delivered via the messaging system on the WAP phone.

Troskie said the goal is to eventually bring the functions available on the Web site to the other channels, which are now limited by the capabilities of their user interface--a handheld remote or a mobile phone. A new generation of portable devices holds out much promise for reaching that goal, he said.

To interact with insurers, Netcover.com had to build bridges between itself and the insurance company legacy systems, offering the options of e-mail exchanges of data; structured text, a form of electronic data interchange; or XML--that is, extensible markup language. The latter, he said, is a crucial technology for further development of Internet insurance capabilities.

Netcover.com has had to be flexible to accommodate different insurers, and it has had to balance the desire to give total control to the customer against the preferences of the companies. For example, Netcover was allowing customers to switch carriers at a single click on the Web site, which the insurers found complicated and costly. That service, which the company has stopped advertising, is now available only via phone. It will be relaunched later on the Web site, but with a switching fee.

Insurers using Netcover.com have found that the risk profile of the customers is actually better than in the general marketplace, and the business written has had a loss ratio, or claims as a percentage of premiums, of 61, despite price discounts Netcover.com has negotiated with the carriers, Troskie said. It has sold about 4,500 policies through the Web site--a good result given the size of the market, he said.

Troskie founded Netcover.com in 1998 after working in information technology consulting with Coopers & Lybrand and in risk management with South Africa's Protea Assurance and Santam Insurance. The latter, South Africa's largest property insurer, named Troskie as product coordinator for Internet development in 1998 and now is one of the companies offering coverage through Netcover.com.

Troskie spoke 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.