Some of those agencies cited a number of factors, including the lack of time, knowledge and resources, as to why they are not utilizing their Web sites more fully. But at the same time, there are a number of agencies, particularly in specialized, niche markets, that are now successfully offering their products online.

“Most agents do have Web sites, but many are just brochure-wares,” commented Jeff Yates, executive director at the Agents Council for Technology, which is affiliated with the Independent Insurance Agents and Brokers of America Inc. in Alexandria, Va.

“Around 10 percent of agents offer customer services on their Web sites, with fewer agents offering products online. But I think the number is growing,” Mr. Yates observed. He said an increasing number of agents now have client-oriented sites, with features like getting certificates of insurance and auto identification cards. “Agents' Web sites are starting to have the functionality to allow clients to find out about policy information,” he added.

Gary Savelli, president of Internet sales at Basic West Insurance Agency Inc. in San Francisco, agreed that, for now, only a few agencies have fully tapped into the Internet's potential. “Generally, I don't think agents are doing a good job of utilizing the Web,” commented Mr. Savelli, who also works as an Internet consultant for independent agents. “I do a lot of consulting, and probably more than 90 percent of the agents I talk to don't really know how to leverage the Internet,” he said.

“Agencies are not utilizing the Web as much as they should. The biggest factor that I have seen is the lack of time and knowledge. They just don't have enough experience and they often don't know what works and what doesn't.”

Mr. Savelli argued that most agents are too busy to reach out to gain new knowledge and have ended up just offering basic services on the Web. “That's what I have seen; agents are just focusing to enhance current customer service, because that's all they can do with their current knowledge.”

Furthermore, Web-based sales have not been “the big ramp-up” for agents that everybody thought they would be, according to Scott Kerns, co-owner and vice president of BayRisk Insurance Brokers Inc. in Alameda, Calif.

To illustrate his point, Mr. Kerns noted the lack of interest from some customers in buying insurance from his Web site. He said his agency's site has a feature called “Virtual Producer,” which, in an agreement with SAFECO Corp., lets customers buy auto or life insurance online at any time, day or night.

“It's a link to SAFECO, but because it uses masking features, it doesn't look like you are going to the SAFECO site. Customers are still going through our Web site, and it has our firm's design and name. And we receive a reduced commission on those,” Mr. Kerns noted. But so far, the response has been “really not very heavy,” he said.

“We have been getting minimal response,” he commented. “We do get some people who buy insurance at, say, three o'clock on a Saturday night, but not very often.”

On the service side, BayRisk's Web site offers several useful features, including interactive online forms for commercial insurance, as well as for coverage for home, auto and boat. “Customers would fill out an ASP form and it comes to us by e-mail, and then we can respond to it. We also have a ratings system that can quote two or three different companies for auto and home,” Mr. Kerns explained.

Mr. Kerns said what he's been finding is that the service is “really the reason why people are coming to our Web site. We provide an access for them to request certificates of insurance–they can also go onto links to some of the insurers and get identification cards for their auto. There are also ways to submit claims after-hours.”

He also pointed out that his Web site makes a handy educational tool, especially for workers compensation issues.

“Out here in California, we have tremendous problems with the workers compensation crisis,” Mr. Kerns said. “So we offer workers comp-related information and articles on our Web site,” he explained. “This is helpful, because even though all the information is out there, most insureds don't have a clue until they get hit with their renewals. And then they scream at us and my CSRs get beat up. I think it's a good way for us to educate our customers.”

Eric Bossuk, chief executive officer at Tri County Insurance-Calabasas, a full-service independent agency in Calabasas, Calif., also said his firm uses its Web site primarily as a service tool.

“Our Web site,” Mr. Bossuk explained, “is a tool for our customers to communicate with us and for them to make changes in their policies, as well as to request identification numbers and report claims, and get information about insurance companies they are insured with.”

Mr. Bossuk said that while most agents still see the Web as just a service-oriented tool, some agentsespecially those offering specialized productshave enjoyed more successes in online sales.

“I wish I had the timenot necessarily the money, but the timeto develop a strategy utilizing the Web. There are opportunities out there, but it's hard to allocate more time and resources,” he noted. “If we could allocate more resources, we would want to have a bigger online presence in sales process [and] be able to market and write more business on the Internet.”

In addition, Mr. Kerns from BayRisk observed that for many agents, the Web is used more and more for business-to-business transactions with their insurance companies. “Insurance carriers are the ones still driving the boat. They are making us all go to the Web-based platforms for all of our work now,” he explained, “and that's fine because that saves them a lot of money.”

For example, Fireman's Fund Insurance Co., SAFECO Corp. and Travelers Property Casualty Corp. all require Mr. Kerns' agency to do online downloads everyday. “We go to their Web sites and we download policies to our agency software on a daily basis. And they are shutting off our paper in a lot of cases. They will send me one copy of the policy–they will send me the insureds' copy. They won't send my copy anymore,” he said.

But while most agents have yet to venture into Web-based sales, there are some niche players who are successfully conducting business on the Internet. One example is the Commack, N.Y.-based IMT Services Corp., which operates InsureMyTrip.com. “We are the largest aggregator of travel insurance on the Web,” explained Jim Grace, president of the firm. “We offer 44 different travel insurance plans from 13 different companies.”

InsureMyTrip.com, launched in June 2000, also offers private labeling and co-branding of its site for more than 500 other travel sites around the world, Mr. Grace said. “It is the only site on the Web that allows customers to compare travel insurance policies from the major providers in the industry.”

He said premiums range from 4 percent to 7.5 percent of the trip cost for the package policy. On the travel medical side, they range from $15, up to $2,500, depending on factors like age and the trip length.

Haylor, Freyer & Coon, based in Syracuse, N.Y., is another agency that has been successfully tapping into the Internet. “For sales of insurance products, we have a section on our Web site called the 'college student section,'” said Cyndy Smith, vice president of technology at the firm.

This online service, which works with a number of universities around the country, was launched last year but already has about 10,000 customers, Ms. Smith said. “So it's new to us, and we are still learning some of the pros and cons. But it's a very nice product for us,” she added.

She explained that her agency has a team of producers that deal directly with U.S. colleges. “They will go to colleges and get an approval to market fire policies for students to cover their personal propertycomputers, clothes, booksin their rooms or apartments,” she said.

“We would get permission from the school to market this product to their students, and once we get that permission, we would get a list of the students from the school,” she explained. “We send out marketing materials that say, 'In order to purchase this insurance, please come to our Web site.'”

Ms. Smith pointed out that in many instances, their parents will have separate coverage on their homeowners policies, but it is usually very limited. “So this provides them with an extra bit of coverage for their personal belongings. The most insurance you can buy is $10,000 with a $50 deductible, and the price is $135. You can also buy the minimum insurance, which is $2,000, with a $100 deductible, and the price is $50.”

Ms. Smith also noted that her agency offers medical insurance online, underwritten through Blue Cross/Blue Shield. “For medical insurance, we also go to universities and get approved from them. The cost for health insurance is around $1,000 for a whole year for each individual student, and about $500 for half a year.”

The online insurance is renewed every year, and if students come back to the agency's Web site to repurchase, they can type in their old identification information. The Web site will present them with all of the information from the previous year, and “they can go through a very brief renewal process,” Ms. Smith explained.

The only way students can purchase this insurance on the Web site is to use their credit cards, and Haylor, Freyer & Coon's site has a built-in credit-card processing feature through VeriSign Inc.

“This process approves the credit card right on the Web, and once the credit card is approved, we allow the student to download the policy copy. The copy is created in a PDF file, and the student can print the policy directly from their local printer,” she added.

“In the personal property program, we have 18 participating schools, and the Web-based health program has four participating schools. We are hoping to grow and get more schools to participate in our online programs.”

Haylor, Freyer & Coon is a large independent agency, with some 25,000 personal-lines clients and around 10,000 commercial-lines clients, and it has been offering these insurance programs for many years, Ms. Smith said.

“But by using the Web, students are essentially self-enrolling and self-administering their policies. We used to have all the applications in our office with their checks or credit card information on their enrollment forms, and we had to enter the information into a system,” she recalled.

“We had to call the credit card companies to verify payments, and then we had to manually print out policies or confirmation of coverage, put them in the mail and send them out to students. It was a nightmarea paper nightmareto deal with that many students all at once.”

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, August 25, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.