Bricks and Mortar Agencies Clicking to Compete

Higginbotham & Associates, Arthur J. Gallagher make dash for the Internet.

Being web accessible will be an absolute necessity for insurance agencies and brokerages in the next few years.

So says Rusty Reid, president of Fort Worth-based Higginbotham & Associates, one of the country’s 100 largest brokers.
The changing market climate means Higginbotham will begin selling small business insurance products online by nsext month. Following suit is another large broker and risk management firm, Arthur J. Gallagher, which has paired with Digital Disrupters to offer online insurance services.

Teaming with InsureZone, a San Francisco-based business-to-business web provider to financial services institutions, Higginbotham hopes to maintain the stellar reputation of its brick and mortar business established more than 50 years ago (the company has grown at an annual rate of 30 percent each year since 1991), while also becoming a contender in the quickly growing e-insurance market.

“We looked at the Internet, and it was very apparent that the insurance industry is going to change dramatically over the next few years,” Reid said. “By teaming with InsureZone, we could stay at the forefront of both those initiatives.”

The teaming has “pretty much” received regulatory approval according to Reid. Already, the companies have soft-launched the privately labeled web site, which will provide Higginbotham customers with small business products.

The companies hope to launch new products within the next year, including a possible foray into online professional employer organization (PEO) products. Higginbotham has already teamed with AdvanTech Solutions, a Florida-based PEO utilizing brokers and agencies to sell it products.

“We’re in very preliminary discussions,” Reid said, noting that moving the PEO products online seems a natural next step.

So where does such a system leave independent agents? Not out in the cold, according to Reid, who will also serve as InsureZone’s president and COO. He said remote agent systems would likely be a necessity, and numerous agents are already clamoring to be added to the new site’s call center.

And understandably. A 30-minute demonstration for IJ Texas showed that InsureZone’s real-time customer service technology could easily be considered superior to that of other insurance Internet sites.

Real-time chat is available for customer questions, as is email for those not interested in immediate information. Perhaps the most impressive part of the system—one that thwarts the argument that Internet customer service could never be as good as person-to-person—was the immediate call back service.

Literally two seconds after clicking a “call request” button on the web site (phone number and other vital information is entered by the customer upon entering the site), the IJ Texas phone was ringing with an InsureZone representative on the other end. The call center will be operational the same day the site goes live, with additional personnel being added as needed.

Already, Higginbotham has added 75 new positions to handle the demands the web site launch will create. And coverages can be bound immediately, so there’s no waiting period for customers.

Policies available on the site are targeted to businesses with 50 or fewer employees and include business liability, business property, workers’ comp and umbrella liability insurance. The carriers include the Chubb Group, The Hartford, Kemper, St. Paul and Travelers Property/Casualty.

Another broker entering the new insurance frontier is Arthur J. Gallagher & Co. based in Itasca, Ill. Hoping to revolutionize the way small businesses purchase insurance, Gallagher, the world’s fourth largest insurance broker, has teamed with Downers Grove Ill.-based Digital Disrupters to launch BigCover.com by the end of 2000.

Gallagher is hoping to tap the $50 billion property/casualty, health and disability market for U.S. small businesses through its new online service.

The companies plan to reach this under-served market by providing one-stop insurance solutions 24-hours a day. BigCover will function as a full-service online broker, providing quotes, binding coverages, servicing clients and handling claims.

Nicholas Elsberg, Gallagher CIO, said the move is “absolutely critical” in competing in today’s changing insurance marketplace.

“The expectation is you will have e-mail, you will have a web site and you will provide lots of information over the Internet,” he said.

Topics Agencies A.J. Gallagher