Canadian Underwriter

The three sided E-COIN

February 1, 2000   by Sean Laughlin, business development manager, E-Business Solution

Print this page Share

In the global economy, one of the few constants is change. Dealing with constant change has forced a growing number of insurance companies and organizations to take a long, hard look at the way they conduct business. And one of the strategies they’re embracing to survive — and thrive — is the Internet.

Now that Y2K is behind us, there is no better time to focus on using the Internet and the World Wide Web to become a more efficient business.

Proactive organizations know that they can use the Internet to deploy dynamic, database-driven Web applications to sell products and services online, as well as expand markets, improve customer service and retention, and increase efficiencies throughout the enterprise. Leveraging the power and reach of the Internet is the best way for insurance companies to increase top-line revenue and lower operating costs.

More specifically, there are three ways insurance companies can harness the Internet for e-business success — on the buy side, inside, and sell side.


Buy-side e-business strategies will allow insurance companies to realize immediate savings by using the Internet as the primary medium to communicate with suppliers and brokers. Strategic procurement software will allow employees to make all purchase requests through an online catalogue. Automating the procurement process will enable insurance companies to have more control over their employees’ expenditures. The cost and time required to manually create and send a purchase order will be drastically reduced.

Statistics from PriceWaterhouseCoopers show that the cost of an online transaction is 10 times cheaper than doing it manually. Using the Internet to set up a just-in-time system for procuring product will reduce inventory costs.

And centralizing the purchasing process will enable insurance companies to track exactly how much they spend with each supplier; in turn, it can use this information to negotiate and/or renegotiate future purchasing agreements.

Inside e-business strategies will further cut operating costs and increase employee productivity. To be cost-effective, insurance companies can migrate their enterprise resource applications to an Internet architecture, where the applications are managed centrally and accessed by clients with a Web browser. Unlike a mainframe, Internet-driven applications are cheaper to run and can provide a more compelling user experience. Internet architecture can also serve a mobile workforce. Whether they log in via a computer or from a palm pilot, each employee will be able to conduct business as if they were at the office. All that is needed is a user name and password, and a directory server will control user access to information. From a palm pilot, replication technology now makes it possible to download snapshots of the corporate database while working offline, and to upload any changes once the employee reconnects to the office. With the most current data, brokers can better serve their customers. With the Internet as its technological foundation, insurance companies can leverage their current IT infrastructures without incurring too many additional costs.

Using the Internet to provide information to customers and brokers — sell-side strategies — is a natural fit for insurance companies because the Web allows customers to make informed decisions in a pressure-free environment. Since insurance companies will be supplying information digitally, brokers can generate policy quotes online; more specifically, they will be able to mix and match variables until they come up with the ideal policy. This can lock in customers because of the convenience of doing business on the Internet. By combining its Web site operations with a call centre, insurance companies can serve brokers more seamlessly. This increased customer service will improve the closing ratio which, in turn, will help generate more revenue.

The Internet will help insurance companies boost revenue, improve business efficiencies and retain customers. Increased sales will funnel from the Web channel and the higher level of service that it provides customers. Once customers have invested their time and effort to do business the new way, the likelihood they will defect to a competitor is greatly reduced. In essence, insurance companies can use the Internet to help lock in customer loyalty.

Insurance companies will also cut costs by using the Internet internally for all their applications. The use of customer relationship management applications will help ensure that insurance companies always know their best

Print this page Share

Have your say:

Your email address will not be published. Required fields are marked *