Cover Story
Vitrual insurance policy
How Nationwide's web site caters to clients
By Kelly Tomkies
Smart Business Columbus | August 2002
More consumers are looking for insurance online, especially automobile insurance. That's good news for companies such as Nationwide Insurance.
Although it was a late entrant into the race to serve customers online, Nationwide has been steadily gaining ground against its competitors. There is, however, a major difference between the model of the $29 billion Nationwide and that of its top two competitors, Geico and Progressive.
That difference is agents, who are helping Nationwide hold on to its market share and make the most of its Web site.
Although the number of visitors to its site is growing, the majority of Nationwide's customers in the 46 states it serves still prefer the old-fashioned means of conducting business -- via an agent.
"In general, people use the Internet to gather information and shop for insurance, but most still prefer to purchase a policy from an agent," says Nationwide CIO Michael Keller.
"Agents are and will remain an integral part of our business as our primary distribution channel," he says. "The Internet serves as an enhancement to our agents and the superior service they provide. Customers want to be able to do business on their terms, whether it's with an agent, over the phone or on the Internet, at noon or midnight. We strive to do business when and how our customers want."
The Internet has allowed the company to remain competitive with Geico and Progressive, which both have a strong Internet presence. Geico sells directly to consumers without agents and Progressive does have agents. But both companies encourage consumers to either conduct business by phone with a customer service representative (any rep will do) or via the Web- with no personal contact with a rep at all.
However, the value of human contact is beginning to come into focus.
"The other big players are starting to send policyholders e-mail responses with a particular customer service person's name, so the policyholder doesn't feel like his transaction just went out to cyberspace with no one receiving it," says Tim Carpenter, a research analyst with Gomez, an Internet quality measurement company in Waltham, Mass.
E-volution of the site
The Nationwide Web site has come a long way since it launched just three years ago as an information only page. Since then, it has evolved into an award-winning site.
Internet site rating company Gomez has ranked its site in the top three the last two years for ease of use and in its overall ratings of insurance carriers' sites.
Ed Nail, Nationwide's associate vice president of technology services, says when the site launched in 1999, its first order of business was to get policyholder and consumer feedback and fine-tune the site.
"Access and ease of use were the two aspects that we focused on first," says Nail.
Nail says that in its quest for improvement, the company does a complete site redesign every year. Future changes could include wireless connectivity through PDAs and Net phones, as well as customization.
When the site is fully customized, it will recognize policyholders and customize content appropriately.
"Our studies with both customers and noncustomers show us that we need to constantly enhance the site with respect to content," says Nail.
Doing business online
So why are so many consumers turning to the Internet for insurance?
"It's a great convenience factor," says Susan McManus, director of marketing and usability at Nationwide. "On our site, you can get a quick quote in less than three minutes or a full quote in 10 to 15 minutes."
Carpenter says there are three reasons consumers access an insurance company's Web site.
"They already have a policy and want to look up their policy or make changes, they want to get a quote or they want to get familiar with the company," he says.
And since the quote process can lead to new business, it is critical that it be fast and accurate.
"We've also added some features that put the customer in control of his or her policy," says McManus. "Customers can find an agent online, pay a bill, get a quote or file a claim."
Room for improvement
Carpenter says there are several steps Nationwide can take to lead it to that coveted No. 1 spot in Gomez's rankings.
"There are tools a site incorporates to prevent the user from hitting obstacles that prevent them from completing an application," says Carpenter. "In Nationwide's case, those tools could be integrated a little better in the process."
He says the Web sites of other leading companies offer policyholders immediate adjustments to existing policies and allow them to view the cost of the change before enacting it. Nationwide's site does not yet offer this feature.
Carpenter also suggests Nationwide offer electronic document delivery, providing customers with all their documents electronically vs. sending them in the mail.
"Electronic document delivery is another area where we see the industry going," says Carpenter. "And this is another area where Nationwide can improve."
Nail says his company plans to continue to improve its Web site and is on its way to being ranked No. 1.
"And we don't consider it a question of if that will happen, but when," he says.
Gomez's overall rating of insurance carriers' Web sites
Progressive
Allstate
Nationwide
Geico
Safeco
State Farm Insurance
Amica
Esurance
GE Financial Network
Electric Insurance Co.
Gomez's ranking of insurance carriers' sites for ease of use
Progressive
Esurance
Nationwide
GMAC
Electric Insurance Co.
Geico
Allstate
GE Financial Network
Safeco
State Farm Insurance
Gomez Web site
