E-service more important than E-sales
NEEDHAM, Mass. - A TowerGroup research report E-Service: A strong second lead for e-insurance finds that many insurers still lack the technology infrastructure to effectively service consumers online. With an estimated 70% of consumers using the Internet to research insurance companies and products, the report indicates this number will only increase as the almost 80 million members of Generation Y enter the workforce. "Insurers are tooling up to sell online but they are missing a perfect opportunity to enable their policyholders, who are already customers, fulfill basic service needs online," said TowerGroup Insurance Research Senior Analyst Jamie Bisker. According to the report, personal line property and casualty premium resulting from online sales is expected to grow significantly by 2005, approaching 3% to 4.5% up from the 2000 industry estimates of only 1%. "As consumers become more comfortable with online financial services, Web-based sales will emerge as a significant portion of total insurance premiums. In the short-term, insurers need to demonstrate superior online service capabilities which in turn will produce satisfied customers and higher retention rates," said Bisker. "The challenge for insurers is to make certain that their e-service activities are more than just marketing offers. They must be backed by enterprise-wide commitment and by effective coordination between customer relationship strategies and information technology infrastructures." Bisker defines e-service as the use of technology to facilitate the process of servicing insurance products, both for consumers and insurance professionals. According to Bisker time is running out for companies still relying heavily on legacy systems. "Firms that continue to rely on quick fixes to integrate core systems with customer-facing applications, such as those utilized on the Web, will face greater challenges in extracting value from new distribution channels as their customer base becomes increasingly savvy."