TOP INSURERS SLOW TO GROW WEB FEET: IT’S ONE STEP AT A TIME AS THEY LEARN TO LOVE THE INTERNET WITHOUT ALIENATING THEIR AGENTS

For Metropolitan Life Insurance Co., launching an ad campaign on the Internet last fall felt like a walk on the wild side.

Now it is ready to take an even bigger leap online, offering policy quotes through two World Wide Web-based insurance malls.

“We’ve been kind of gun-shy about doing this,” admits Neal Zamore, the director of interactive commerce for the New York insurer’s retail business.

Such sentiment is widespread in the life insurance industry. Until last year, reluctant to mess with the high-profit tradition of selling coverage through agents, major insurance companies all but ignored the web.

Then competition shattered their reserve, as banks, brokerages and new online insurance services began marketing policies on the web. For MetLife and other big insurers, it was time to go with the flow.

They’ve only gone part way, however. Still reluctant to step on the toes of the sales agents, most big insurers aren’t selling policies online.

Instead, they are offering clients information on their accounts and the ability to create personal insurance files. While some big insurers are quoting prices online, the goal is to steer the leads to local agents.

“We’re really looking for people who want assistance from a professional broker,” says Ken Hittel, an assistant vice president and webmaster at New York Life Insurance Co.’s virtual service center.

Forrester Research in Cambridge, Mass., estimates that only 12% of carriers have done any online selling — defined as issuing a policy to a customer who has submitted an application and received a quote over the Internet.

“It’s astonishing how little activity there is among the insurance companies to allow customers to complete transactions online,” says Bill Doyle, an analyst at Forrester.

The companies say that the benefits of web transactions don’t outweigh the risks of alienating agents. Tom Baker, vice president and chief information officer at Guardian Life Insurance Co. of America, says that because life insurance policies are complex, they are best sold in person by trained specialists.

More aggressive insurance companies are eager to test Internet sales. They’ve seen the success that online brokerages have had and they want to apply the do-it-yourself approach to insurance.

Zurich Life Insurance Co. of America, for example, has locked up an exclusive deal to market term life insurance on Charles Schwab Corp.’s online supermarket. Reliance Direct, a unit of Reliance Insurance, also sells insurance on the web.

“The longer the (established insurers) wait, the more upstarts are going to make headway,” says Mr. Doyle. His firm estimates that by 2003, Internet-influenced sales will make up more than 5% of the insurance market.

MetLife, among others, sees price quotes as a first step toward selling policies online. This year, the insurer will begin offering prices on term life policies through InsureMarket and InsWeb — online insurance supermarkets that provide information from a variety of carriers.

One of MetLife’s main Internet efforts is Metgician, introduced last year for clients to create customized insurance-related sites. It also has a chat area.

New York Life has created a virtual service center for such tasks as filling out insurance forms and changing the beneficiary on a policy.

Similarly, in November, Mony Group Inc. launched a personalized customer service center, My Mony.

Both Mony, which went public in November, and MetLife, which is planning an initial public offering, are feeling increased pressure from Wall Street to compete with online financial services.

Business clients next

Guardian plans to extend online services to business clients early this year, letting companies pay bills and manage corporate portfolios via the Internet.

Insurers are also becoming more comfortable advertising on the web. As they expand into mutual funds and other product lines, carriers are using the Internet to spread the word.

Through its deal with Microsoft Corp.’s Sidewalk city guides, MetLife is pitching term insurance and Roth individual retirement accounts in 71 major markets around the country.

New York Life is launching a campaign on Sidewalk this year, linking users to 145 sales offices nationwide.

Hartford Financial Group recently hooked up with Juno Online Services, a free e-mail service based in Manhattan’s Silicon Alley. In the five-year deal, Hartford will promote its personal insurance to the online service’s 6.1 million subscribers.

A spokesman for InsWeb, one of the online insurance malls through which MetLife is advertising, says another big New York carrier is close to signing on. In the last year, the Redwood City, Calif.-based company’s site has jumped to 28 insurers, up from two.

Some of the biggest insurance companies say they still have the jitters, though.

“So far, we feel we don’t need to,” says New York Life’s Mr. Hittel. “But there may come a day when we simply have to.”

Crain News Service