What's New in Cybertalk?

by Jean Gora
April 1998

Note: CyberTalk is a column that appears monthly in LOMA's Resource, the magazine for insurance and financial services management. To see more contents of the magazine and to see how to subscribe, click on Resource.

Upgrade! The New "Single" Face of Prudential on the Web

Many insurance companies that have made a strong commitment to the Internet update their Web sites annually or every 18 months. These updates allow the companies to take advantage of evolving Internet browser features and development tools. They also provide outsiders with useful indications of the companies’ Internet strategies. This month’s CyberTalk examines how Prudential’s Web site has evolved over the past year.

Prudential has made major additions to and modifications of its Internet site and developed a number of impressive extranet and password-protected Internet services that are announced and/or demonstrated on its public site. When Prudential first appeared on the Internet, it did so through several sites, each of which presented information on a particular Prudential subsidiary. Although these sites were hyperlinked, there was no graphical integration. The sites looked as though they had been prepared by totally independent organizations. That separation reflected the way that Prudential traditionally operated—with separate fiefdoms that communicated little with one another.

The company, like many insurance companies, lacked the ability to provide a customer with a comprehensive view of that customer’s entire relationships with Prudential. New Prudential CEO Arthur Ryan changed that approach and introduced a "One Prudential" policy. In a June 1997 interview with InternetWeek, he said that he wanted the single Prudential brand name to unify all of its activities. He plowed $1 billion into the construction of a massive internal corporate TCP/IP network that provides much of the back office technological underpinning for the "One Prudential" policy. He also invested massive sums in a printed media promotional campaign that highlights the Prudential brand and continues to this day. A key element of his strategy was to offer customers universal access to Prudential—that is, access seven days a week, 24 hours a day.

Arthur Ryan’s policy prompted a major redesign of the Prudential site at the end of 1996. The revised site sported a single uniform look. Similar topics received similar treatment, irrespective of where they appeared. For example, the description of a managed care product was approximately the same length and the same level of detail as the description of a life insurance product. The Prudential Securities portion of the site no longer looked like it had been designed by someone who was unaware of the existence of Prudential Insurance.

The revised site was rich in geo-locators that allowed site visitors to find Prudential securities brokers, insurance agents, and affiliated medical providers located near their homes or jobs. The site also offered numerous interactive tools that Prudential’s prospects or customers might formerly have been able to use only if they were in personal contact with Prudential representatives. And Prudential Securities offered one of the first services to allow retail stock brokerage customers to monitor their portfolios on the Internet. This service was password-protected but accessible from the main Prudential site. Thus, the 1996 site provided not only a unified view of Prudential but also important elements of universal access.

The current revision of the Prudential site maintains the single unified view of Prudential but gives it a face lift, streamlining site navigation and using brighter colors. It also grants access to additional business areas of Prudential and provides demos of extranet-based services that do so. Thus, the present site realizes even more of Arthur Ryan’s vision of universal access than the 1996 site did.

The revised welcome page presents a scrolling message box with a caption that says, "Check this out…." Scrolling messages refer to Prudential’s plan to demutualize, the new Roth IRAs, the availability of daily net asset values of Prudential mutual funds, Prudential’s new online retirement service, and other site highlights or recent Prudential actions.

In addition to the scrolling messages, the welcome page also lists five topics: personal investments and insurance, the business center, corporate fact finder, employment center, and community center. When the visitor moves the cursor on top of the buttons beside the topics, explanatory information automatically appears. There is no need to click on the mouse. The visitor can then click on a button and go to the associated section of the site.

In each of the five areas, the visitor finds other menus that list important sections of that part of the site. For example, the personal investments and insurance part of the site lists sections on retirement planning, education funding, insurance, healthcare, investing, real estate, banking services, and estate planning—essentially all services that Prudential makes available to its individual customers. The business center lists sections on executive services, commercial banking, corporate relocation services, commercial real estate, and real estate franchising opportunities. A horizontal frame across the top of the screen offers hyperlinks to a search engine, a directory of the site, worksheets, e-mail access to Prudential, and return to the welcome page. An office locator button appears that the beginning and end of each section menu.

Interactive Tools

The worksheets page provides hyperlinks to all of the site’s interactive tools. These tools, many of which appeared in the 1996 revision of the site, include the following:

• Retirement planning: a retirement planning quiz, a tax deferred growth calculator, a Roth IRA calculator, and an IRA conversion calculator (for individuals who already have IRAs).

• Education funding: a college cost calculator and a quiz about the rising cost of college.

• Life insurance: quizzes for newlyweds, new parents, and new homeowners; a ‘prepared for the future’ quiz; a life insurance worksheet; and an insurance needs quiz.

• Homeowners insurance: a home safety quiz and a homeowners insurance savings quiz.

• Auto insurance: an auto safety quiz and a quiz about eligibility for discounts.

• Real estate: calculators that show the price of a house an individual can afford, the likely monthly payments on the house and the likely principal and interest; and a test of an individual’s knowledge of real estate franchising.

• Banking: Equity credit line savings and payment calculators; calculators that show how much a person can borrow against his/her stocks, bonds or mutual funds; and a calculator that shows how much an individual can safe when he/she rolls over a 401(k) plan rather than cashing it out

• Estate planning: an estate planning worksheet and an assessment of whether the site visitor needs an estate plan.

• Healthcare: a medical provider locator, a health style self-test quiz, a family health plan quiz, a test of one’s knowledge of important facts about childhood immunization, an assessment of one’s risk of a heart attack or brain attack.

• Investing: an investment personality quiz and a wealth accumulation calculator.

The following sections take a close look at how Prudential is translating the principle of universal access into reality through Internet or extranet retirement, mutual funds, securities, healthcare, and commercial real estate services.

Retirement Services

Employees of companies that sponsor retirement plans managed by Prudential can access these plans through Prudential Online Retirement Center. A demo of this center is available on the public site. This demo marries typical interactive retirement planning calculators to the ability to monitor daily plan values. The combination is extremely effective. The employee is invited to follow the following five steps:

• Read an overview of the retirement planning process.

• Establish retirement planning goals and determine the level of savings required to meet those goals.

• Evaluate one’s investment type and how it should affect one’s asset allocation.

• Select mutual funds that allow one to allocate assets accordingly.

• Enroll in the employer-sponsored plan with the desired asset allocations.

An employee who follows the steps outlined above receives a powerful illustration of the importance of contributing to retirement plans. This feature is likely to have an important impact on participation by eligible employees in 401(k) plans. Federal law restricts the contributions of highly compensated employees in plans that have low levels of participation by other employees.

Mutual Fund and Securities Services

The mutual fund section of Prudential’s site allows site visitors to download fund prospectuses. It also provides extremely useful information regarding the performance of each fund. For example, it shows the average annual total return for the fund for the year to date, one year, three years, five years, ten years, and since the fund’s inception. It provides this information in two formats, one that is adjusted for sales charges and one that is not. It also presents average total return for comparable funds as measured by Libber Analytical Services. Finally, it presents a graph that shows how much a $10,000 investment made at the fund’s inception would be worth now.

One of the most impressive elements of the Prudential site is a demo of its updated Prudential Online securities portfolio monitoring service, which is available to the customers of Prudential Securities. Although this service does not at present allow online trading, it offers many of the other benefits available through the major online securities trading services such as Charles Schwab or Fidelity Investments. With a number of clearly labeled navigation buttons, this service offers screens that allow an investor to view:

• Accounts: account type, classification, name of account holder, securities value, money market and cash balance, and net worth.

• Balance: priced securities value, money market funds, cash balances, VISA purchases, net worth, and funds available for withdrawal with and without borrowing.

• Transactions: type, quantity, date, description, trading symbol, and price/comments.

• Portfolio detail: For equities and options, it shows symbol, quantity, prior day’s closing price, price change from the day before, prior day’s closing value, and recommendations of Prudential researchers. For corporate bonds its shows a description, quantity, current price, current value, estimated accrued inter, and estimated annualized income. Similar types of information are presented for mutual funds and unit trusts in the portfolio.

• Portfolio allocation: A pie chart showing the allocation of the portfolio as of the close of the prior business day.

• Monthly statement: The prior year’s consolidated statement plus the current month’s statement showing portfolio detail, unrealized gains and losses, account activity, command card activity, checking and bill payment activity, and money fund purchases and redemptions.

• PruPay Online BillPay Service: all of the features found in a typical online bill payment service. A money market fund substitutes for a checking account.

• List of recommended stocks: stock name, symbol, industry, the prior day’s closing price, the target price, and risk/volatility.

Healthcare Services

Prudential is developing a Web-based healthcare benefits management system that allows employees of plan sponsors to look up personal information on their health benefits and interact directly with Prudential’s claims and member services departments. This system is now running on a private extranet Web site that serves the employees of Netscape Communications Corporation. Netscape and Sun Microsystems are co-developers of the site. This site allows employees to do the following:

• Change primary care doctors.

• Look up doctors and dentists in the network to find out their specialties, medical background, hospital affiliation, and languages.

• Obtain directions to a doctor’s office from one’s home or office.

• Assess the status of a claim and review claims history.

• Download claim forms.

• Request ID cards.

• Review benefits summaries and other plan information such as plan type, co-pays, and reimbursement rates.

• Send questions to member services.

Employee personal information is available only to the employees themselves. Benefits managers can log on to the system at a level that allows them to create welcome messages to employees and to track plan activity.

Commercial Real Estate Services

Prudential has made a major enhancement to the commercial real estate section of its public site. It has added a feature that allows visitors to search and view commercial real estate listings by location, property type, square footage, and investment and financial information. Color photos of the property are available. Prudential brokers can post their clients’ requirements to other Prudential brokers. Prudential also makes available to its brokers material that they can print as 2-5-page color brochures describing key properties. This move lowers printing costs for both Prudential and its brokers.

These services show that Prudential is using the Internet to open many of its core business processes to its customers and partners. The emphasis in these services is on allowing the types of interactions that bind a relationship. Although Prudential’s public Internet site does not make direct sales but rather refers prospects to sales agents, it has an important marketing purpose.

One of the biggest problems in traditional service marketing is that a prospect cannot sample the service without actually using it. For example, a prospect for a dry cleaning service cannot know the quality of the dry cleaner’s service without actually sending an item of clothing to be cleaned. Traditional insurance and financial marketing has confronted the same problem.

A customer who cannot sample a service in advance has a natural reluctance to buy. By using its public Internet site to offer so many demos, Prudential is creating an important opportunity for prospective customers to sample its services. The very high quality of these demos is likely to have a positive effect on its sales.