News From AISG InsTech'99
ORLANDO, Fla., Nov. 10, 1999 – An insurance industry leader urged insurers to safeguard the confidentiality of information about their policyholders, claimants and businesses by working more closely with public-policy makers and being more vigilant within their own organizations.
Speaking at the AISG InsTech'99 conference here, Frank J. Coyne, president and chief operating officer of Insurance Services Office, Inc. (ISO) cautioned that if innovators were unable to protect trade secrets and benefit from what they develop, "you stifle innovation to the buyers' detriment."
"When you provide data outside your organization – whether to vendors, third–party administrators, consultants, rating organizations or government agencies – get the same confidentiality safeguards from anybody else as you do now from ISO," he told insurers at the conference.
The four–day AISG InsTech'99 conference's theme was " Building Solutions: Taming Technology." The conference drew 700 insurance and technology experts for information on practical applications of technology for claims handling, loss control, fraud prevention, premium audit, data management, and other applications.
Terry Broderick, president of Royal & SunAlliance USA, reminded insurance technology experts that people will always be the "real difference in this business."
With so much interest focused on electronic commerce, insurers should not forget that "when it comes to buying and selling, e–commerce will be used primarily for sales to buyers of commoditized products – and even there, at a relatively modest rate of increase in terms of the Internet insurance sales," he said.
"Insurance is a people business. In addition to technology, interpersonal relationships are elemental to the business transaction," said Broderick.
Fighting Insurance Fraud
Addressing claims specialists and investigators, Richard P. Boehning, president of ISO's American Insurance Services Group (AISG) unit, said the completion of the property/casualty industry's all–claims database is one of the major breakthroughs in the industry's antifraud campaign.
Another breakthrough is the development of technology that enables insurance company investigators to identify potentially fraudulent claims before they are paid in a fraction of the time it takes otherwise.
"We've built a gateway between our claims database, ISO ClaimSearch, and individual insurers' claims systems that use fraud–detection software," said Boehning.
Internet marketing was the focus of a major panel discussion, moderated by Barry Rabkin, president of Market Insight Group Ltd. Participants on his panel agreed that the Internet is transforming the insurance industry but at a moderate pace.
Vi Beaudreau, director of advanced technology for the Hartford Insurance Group, said consumers want the best price, "nothing more." His co-panelist Joel Gehman, manger of electronic commerce marketing at Reliance Personal Insurance, noted: "Consumers are ready to shop for quotes, but not ready to buy (insurance over the Internet)."
David Blair, vice president of industry and regulatory affairs, Insure Market, suggested successful Internet sales would follow effective consumer services. "The companies that will be squeezed are the ones that don't allow consumers to service their policies on the web," he said.
Hector Maury, vice president of electronic commerce, Travelers Property Casualty Insurance Co., agreed." Insurers are placing too much focus on acquisition. How much can we sell? The focus," he said, "should be on maintaining the business."
E–commerce adds value by making the sales process "as quick and easy as possible," said Maury. "If you have to answer 93 questions, the process is too forbidding."
Blair of Insure Market agreed, noting various usability tests reveal the same phenomenon. "Consumers think Internet sales ask too many questions. The user wants multiple quotes and the ability to make the decision now," he said. Beaudreau of The Hartford reminded listeners that "we must service the instant–gratification generation. People want choice, and they want it now," he said.
The four panelists agreed that to succeed at electronic commerce, insurance companies must fully and seamlessly integrate new technological and conventional sales methods. "For e–commerce to win out, we're going to see diversity of distribution," said Blair.
Agreeing, Beaudreau added, "you have to go to both (Internet and producer–placed sales). You have got to provide click–and–mortar. People want quick response, and they want to deal with a trusted party," he said.