It would be a mistake for most carriers to discard agents in favor of direct sales through the Internet. Insurance retailing on the Internet, whether offered by carriers or "virtual agencies," has not been successful. (See "Sounding Line," August TD.) And in fact no consumer-focused Internet insurance business model-whether sales, auction, portal, lead-generation, consumer information, or comparative quoting-has had much impact; certainly nothing like the once-common predictions of entrepreneurs, analysts, and consultants.

If direct Internet selling doesn't make sense as a business strategy for agency carriers, what does? Does the Internet have a strategic business role to play? Where should carriers place their bets? The right answers may defy conventional wisdom.

Doing (Almost) Nothing

Sometimes the right thing to do is nothing at all. Carriers that resisted jumping into the Internet fray with ambitious and expensive e-commerce initiatives may have done the right thing. But should a carrier entirely ignore the Internet and proceed as if it did not exist? Probably not.

First, in some cases Internet-based e-mail has significant advantages over phone and fax. It's relatively inexpensive to deploy and can improve day-to-day communications with agents, insureds, adjusters, auditors, and other parties.