From Resource, October 2003 
Copyright by LOMA

Creating the Optimal Portal
Disappointed with the lack of ROI from your portal? Don’t give up yet. Find out how you can begin to reap the long-awaited rewards from your investment.

By Tammy J. McInturff

Portal technology can help insurance companies get closer to customers, improve speed-to-market, streamline interactions with agents and business partners, and achieve operating efficiencies. However, to be successful you need a portal with the right kind of features and capabilities for your business. At the LOMA Systems Forum, Kimberly Harris, research director, Gartner Group, discussed the strategies and capabilities necessary to have a successful portal. She also discussed how to leverage some of your past investments in portals.

For the insurance industry the interest in portals or Web sites started with the emergence of e-colleges or e-business sales. "When the first ‘e’ hit the insurance industry, companies were energetic, excited and eager to learn how to make money on the Internet," Harris said. "The Internet was going to be the sales tool that was going to allow them to reach all new customers and do a lot of sales activity." So the first portal insurance companies created was a sales Web opportunity. Companies invested in all these new types of portals, online agency models, and created Web sites with insurance products that customers could view online. But the reality is, insurance companies invested a lot of money in portals and did not to see much, if any, return on their investment. Customers were just not ready to buy insurance products online. Harris explained, "The industry saw a little bit of interest in auto and homeowners insurance but the majority of carriers had not seen any return on investment."

As the hype faded, insurance companies decided that Internet portals and e-business were really not all they touted to be. So, companies decided to be more conservative with their investments. According to Harris, companies began looking at distribution and ways to get more Web sites out to agents. "We wanted agents to have more information at their hands, yet it wasn’t an information site because it didn’t allow us to do transactions or interactions. It was purely an effort to build stronger agent relationships. Along with this investment, carriers began to invest in building customer service Web capabilities." Harris said. "These sites were static, however, and only allowed the customer to come in and get information about the company and product. Although customers could login and see the company’s information and products, they couldn’t do anything when they got there. All they could do was view. The site needed more personalization and financial planning tools."

Adding financial planning allows the customer to come in and do a needs-assessment. "We can start by doing an analysis of their portfolio to determine where they need to have certain products," Harris said. "We wanted to personalize the experience and give customers very specific information that is tailored to them, based on what we know about them. Of course, to have personalization it means you have to know your customers. You have to have your CRM projects in place where you have customer databases that allow you to see your customers’ references—like what life events they may be having. Many companies haven’t accomplished that in their databases."

So today many companies are at what Harris calls a ‘trough of disillusionment.’ Companies are realizing now that portals are not all they were hyped up to be, but there is hope. In order to rise out of the slump, companies will need to refocus efforts for their portals. According to Harris, more e-marketing will be needed and more focus on full customer self-service. You will also need to focus on supply chain management and channel integration. "It is not going to be easy and there will be some core development issues you will have to deal with," Harris said. "We are just beginning to realize the benefits we can derive from the investment."

There are many potential opportunities for companies to create a return on investment with portals, both in terms of reducing your costs and in generating revenue, agent extranets, corporate intranets and customer self-service are just the tip of the iceberg. Portals can allow a lower cost channel for servicing and transactions, give you the ability to reach customers and allow electronic interaction with suppliers and partners. Portals can also be a 24-hour sales and service channel, allow a collaborative workspace and be a great employee desktop tool.

"All of us, because of the economic situation, are looking for ways to snip costs for our organization. We need to focus on centralization of information, cutting out redundancy, improving accuracy, reducing the cost of content information storage and increasing productivity," Harris explained. "We are also still focused on revenue generation. So we can look at ways of fulfilling revenue generation through customer service online. We can move some simple transactions to the Web site and eliminate some of the simple transactions from the more expensive channels. This will make the customer feel more in power and make the supply chain more efficient. We can promote the agent broker relationships through this. So in this context we can continue to invest in portals."

Most companies have portals today, although some have invested in them more aggressively than others. According to Harris, Gartner classifies companies into three groups. Type A companies are technology aggressive and very innovative. They are the first to go after new technology products. Type B companies are the followers. They like to let the A’s go in and test the technology and see if it works. Then they will come behind it. Type C companies lag behind. They are the last to respond and only do so under pressure. So based on this what we are seeing are the A’s have portals for all across the space. They have portals for agents, for different lines of business and basically for anyone you can possibly think of to connect with electronically.

The B’s have some portals depending on the company and C’s are very low adopters of portals. However, most of the portals that companies have today are very independent. They were developed by different people across the enterprise using different tools, different approaches to the information content and many of them have their own content document repository seen behind the portal.

"We have a lot of independent, siloed portals that are allowing us to touch our customers and make the short-term objective of improving agent or customer communication," Harris said. "But when you look across the whole enterprise, most insurers are not acting as one enterprise. They are overspending because they have so many independent projects that are in conflict with each other."

According to Harris, when you think about portals, you need to think of it as a portal ecosystem. You want to take all of your portals and clean them and consolidate them so that you have one hot entry; so your customer can come in, be greeted, and then branch out into different pathways depending on his or her needs. Consolidating information and portals will allow you to better manage the corporate brand. It will also give you more centralized information and more control of all the portal applications that you have. Don’t forget that portals are about information delivery.

In insurance, portals cannot be information only; you have to go beyond information delivery to look at the transactions. "When the customer or agent wants to interact with you they don’t want to just see information," Harris explains. "A lot of companies have information built into their desktop solutions—for example a point of sale or agency management system. Customers want personalized financial information. They also want to be able to interact and transact at one site."

Theoretically, you can create portal connectivity with customers, captive agents independent agents, brokers, investors, service suppliers, reinsurers and regulators. So a portal can connect you with both front-end and back-end operations in your company. "You need to think about how you can reach these customers using both wired and wireless solutions, and looking at what information applications and transactions they would want to be engaging with you," Harris said. "Look at the unique user requirements for each group of people—reinsurers, regulators, agents and customers. What are they going to be looking for? Your users are going to be looking for information, interaction, transaction, convenience, integration and collaboration. They want the right information at the right time, delivered through the right channels, 24-hours a day. They also want the information to be personalized. They want to be able to reach you if they have a question or need additional help. So you have to look at ways to collaborate through these very intimate environments."

According to Harris, the first way companies have started creating a more intimate environment is through personalization. "The bad part of personalization tools is we have put them on the Web site similar to a ‘my AOL’ or ‘my Yahoo’ page, where they say here is the Web site, pick the content that is important to you. The user only then can take the screen and put in what is important to them. We need to focus on presentation personalization. The next step is to take your CRM database and integrate it with your portal. This way we can take all the information we know about our customers’ life preferences, or life events and then give them a list of things they might find interesting based on their information. Leveraging personalization technologies is a good start, but it is not the ultimate answer."

When you talk about portals in the world outside of insurance and financial services, you talk to vendors. "Vendors will tell you that they can create a portal that will take all the information in the company and align it with your portal. But what they do is very generic," Harris said. "This portal isn’t going to answer all of your needs, because you will be missing insurance-specific transaction capability. When you bring all this content to a Web site you are only offering more opportunity for failure if you stop there. It is like window-shopping, when the store is closed. The store may have all this functionality, but if the door is locked, you can’t go in and buy anything. You are missing the opportunity to close the sale, to increase the customer satisfaction, and to increase the relationship with the customer." So the transaction stage is needed, where the points can be tightly coupled and integrated. Then the customer can actually start the transaction via the Web site.

Harris described a study that Gartner conducted on portal progress in the insurance industry. "In our study we compared the year 2001 and 2002 in terms of portal progress. Everyone we looked at in the life industry had a Web site. At year-end 2002, 42 percent had a customer service site compared to 33 percent at year-end 2001. Most carriers have started to invest in building these very siloed application portals. At year-end 2001, 79 percent had a corporate intranet, which grew to 98 percent at year-end 2002," Harris said. "Sixty percent had an agent extranet at year-end 2001, compared to 75 percent at year-end 2002. However, the supply chain extranet implementation was significantly lower in adoption. At year-end 2001, 38 percent had a supply chain extranet, which grew slightly to 48 percent by year-end 2002. Think about the money we have spent in our organizations and across the industry for what we have today in terms of portals. We have spent a lot of time looking at the low-level portal functionalities so we are starting to make simple progress in looking at fulfilling the transactions."

"Gartner asked insurance companies what they were doing on the self-service channels. At year-end 2001, 42 percent of life insurers supported a customer service site. We also collected information about the individual customer service tools they provided including advisory services, aggregation, bill payment, bill presentment, links to other financial sites, financial calculators, view claims status, submit claims, e-mail, make policy changes, make simple changes, view policy, and non-transactional," Harris said. "A lot of companies report that they are focused on financial management, but when asked how much they can do with the information, a lot of times it is very simple. For example, they may have a tool on the Web site that will allow customers to calculate how much money they will save on retirement, based upon what age they are going to retire and their income level. But when you get the answer, there is nothing else next. It doesn’t show you how to look at annuities to save money or show you retirement funds that could prepare for the retirement income that you would like. It just says you don’t have enough money. So the benefit to the consumer is limited."

Some companies have expanded focus to include electronic bill presentment and payment. These carriers allow you to login to the Web site or submit a claim. "These Web sites may also allow you to see claims status check which means they are just opening up Web services, a workflow system that says, ‘I’ve received your claim, it has been handed off to the adjuster, thank you. Call us if you have any questions.’ Once again the site is not answering all the needs of the consumer," Harris said. "And further more, most of the problems related to this have to do with collaboration. We asked a sample of companies if someone is on your Web site self-service and they have a question is there any way they can contact you. Many of the life and P&C companies reported that online users could not even send e-mails to them. Ultimately, there is no way to interact or contact the carrier from the Web site in this instance. Of those who are working to implement a collaborative environment, e-mail is the most popular, compared with shared screens, interactive chat, or call back. It is a very sticky situation because customers are there and want to talk to the insurer, but they have no way to communicate in real-time with company representatives. So insurers are losing opportunities to build customer relationships and enhance current relationships."

Another problem is agent extranets. Although, companies have invested a lot of time and money into agent extranets, a lot of these Web sites are not the most user friendly. "It takes a lot of investment to get agents to come to a portal-based technology. Most companies said they had to invest in marketing, do promotions, even giveaways for the agent to actually use the site. So it is not as easy as build it they will come," Harris explained. "We see more and more portal acceptance from the agents, however we’ve had to invest twice as much money through marketing. Sites had to offer more functionality; so many times the reason they are not using the portal is because there is no value. The industry is still not answering needs even though it is getting better."

Claims is another portal that has emerged in the last few years. "Gartner asked life, health and P&C insurers if they were building portals or using some of the third party portals that are out there to couple claims. There is a low acceptance in the industry. They appear more attractive to the P&C insurers because of the nature of their claims transactions," Harris said. "Now we are not only talking about portals that we develop and control, we now have to deal with all these third party portals that are going to come up for lawyers and litigation. So the portal environments are now reaching from inside our corporate walls to all this vast majority of other third parities."

When companies start consolidating and looking for opportunities to leverage their investments in agent, customer and internal employee portals what they will see are opportunities to improve both the process as well as the return on investment.

With the portal there is a good opportunity for you to maximize your CRM investment. "Portals can help support insurance channel management," Harris said. "To have a successful portal you need to focus on user requirements, integrate the channels for information flow and collaboration, centralize content and information, implement workflow across applications, apply business logic and rules to trigger action and access data from application and legacy systems in real-time."

"If we think about portals as delivery to all the different parties across the continent using both wireless and wire-based technology, we can think about how our organization can centralize the information," Harris said. "You can look at the rules and essentially automate the internal processes you have of delivering information and consider how you can alter the information in the process, based on your needs. Then we can have applications integration, which will allow us to deal with transactions. So looking at our internal processes and data will be the first step."

The insurance organization of the future will have a lot of requirements and the portal will be a great tool to help accomplish some of these tasks. The main two tenants of the next generation insurance company, according to Harris, are going to be focused around process management and leveraging infrastructure investments. The old legacy systems will have to be upgraded or replaced. "If we think about adding modern technology as a way to fulfill those two requirements, you can see how the portal fits very nicely into that structure," Harris said. "It is a new technology that we can use Web services and applications integration to extract data from the legacy environment, which in no way can be opened up to the Web interface directly. We can then support end-user requirements and begin to take process management into a new era, where we can expose the appropriate process using simply based technology focused upon the customer’s needs."

A lot of the portal fallbacks that you see are focused more on internal intranet communication information delivery. You want to start leveraging that investment, by taking the next step and identifying different opportunities you would have for other parties. "You can create communities through the technologies and determine how you are going to deal with knowledge management. You can look at workflow, productivity and performance metrics," Harris explained. "Look at e-learning as well as relationship benefits and expand it to the value network, realizing that different parties could find similar benefits from that process. You can use a portal as a way to deliver e-money to your distributors, or to educate your agents on new products, or when you plan to give financial planning seminars." Internal portals can be used for enterprise e-learning, work and productivity applications, to create communities, for enterprise and executive communication and for employee self-service (e. g. , forms, FAQ, procedures, and policies).

Part of the future is going to be surrounding the idea of consolidation, what Harris calls the uberportal. According to Harris, the uberportal is a high level, horizontal portal, providing an entry point to multiple horizontal and/or vertical portals. "Today when you deal with an insurance or financial company you have multiple Web sites," Harris said. "I was talking to one company a few weeks ago that has 35 Web sites. With that many Web sites there is no way for them to deal with information and brand consistency. One way to consolidate is to merge together portals that are redundant. Insurers don’t need different lines of business portals in many cases, a lot of times we create one customer service portal for one line of business, another for a different line. Organizations can have that integrated into one customer service portal. Many of the customers want to see a consolidated view, so it makes perfect sense. So we need to consider how we want to leverage all of these independent portals into this uberportal."

Harris showed how portals have developed from generation one to generation four. Generation one began in 1998, during this time the focus was on information access and content aggregation. Portals included personalization, search and categorization and a lightweight application framework. Generation two began in 2000, these portals had a robust application framework, allowed collaboration, were mobile and wireless and included a management framework. Generation three began in mid 2002 and allowed advanced personalization, process integration, abstraction layers, knowledge management, Web services, offline support and federated search. Generation four is set to begin in 2004 and will include multichannel interaction, composite applications, personal content, advanced Web services and universal federation. "Most insurance companies are still somewhere between generation two and three," Harris said. "So you are not necessarily going to get to generation four by next year. But you need to map where you are on the generation time-scale today and determine, knowing generation four is out there, how you can fulfill the requirements to get there."

How do you get to generation four? When you look at the insurance market today, you have four options. First there are horizontal portal providers. "These types of portal providers don’t care what industry you are in," Harris said. "The horizontal portal will allow you connectivity with your applications, content business intercom intelligence integration, but it will not allow you to do anything specific to insurance—like insurance transactions, claims, or agent learning. You are going to have to buy something and integrate it or do it yourself."

The second option is core-processing vendors with Web-interfaces. "Your back office vendor may be able to create a portal for you. If you are only running one back office system and are completely locked in to one vendor it will help you. But be realistic about the complexity of the different applications that you have. Technically this is not the easiest path for you," Harris said. "Typically it is helpful to open up that system but you would want a portal on top of a core-processing vendor. Otherwise, you are going to have multiple systems from different back office vendors. So, this poses challenges for system integration."

The third is CRM vendors with portal capability. "Your CRM vendor will tell you that they can consolidate customer information. It will allow you to have portal functionality and it is good for a CRM application, if you are only going to send out customer information. But, it is only going to be linked to the customer information," Harris said. "They are not going to fulfill other portal requirements related to business intelligence, documents, content or transactions. Some of them will allow you data entry but that has to be integrated to another system."

The fourth option is insurance-specific portal providers. These fulfill the requirements of the portal and go beyond that to help with integration of systems. They are familiar with ACORD XML and other standards that you are implementing. "Because these portals are insurance specific they are familiar with your internal systems and the processes of executing your transactions," Harris said. "So they are going to move up that transaction merit and allow you to have transactions on your portal, without a huge burden on your IT departments."

The portal in many ways is going to be reliant on your individual infrastructure. "One of the misconceptions about portals is that they will help you short-term. They are going to help you deliver information, but you also need to be devoted to your back office systems and infrastructure," Harris said. "The more up-to-date, clean and organized your infrastructure is, the easier it is going to be for the portal provider to come in and bring the systems together. The typical insurance organization has a very siloed business unit and application area and each one of these has its own system that was never meant to communicate or interact with any other system. So there are huge integration challenges today. Portals will help you, but they are not the silver bullet. We can’t continue to think that they are going to answer all of our problems, just because we have a portal on the top to open up information. If our systems are bad or slow on the back-end because they are not integrated, a portal is not going to solve that problem. So we need to focus on both the portal on the front-end and the infrastructure as a way to have end-to-end straight through processing."

The insurance industry is in a tight economic situation at this time. The focus on how you get return on investment out of technology is crucial. So as you look at portals also look at the ways to measure success. Look at risks both of what could happen if you invest in the portal and if you do not. Will it make an impact on your business? Will customer satisfaction decline? Will agent satisfaction rates decline?

Looking at an internally facing portal, increased productivity would be one benefit. If you start bringing information to your employees through the portal, productivity will increase; because they will have more information at their fingertips, and spend less time searching for files and searching different systems. Some of the soft benefits you are going to see are having a single user interface, a single sign on, presentation layer, correlation and user satisfaction and ubiquity of access. Some of the tangible ROI benefits may be cost avoidance, targeted deployment, self-service and business velocity.

Insurance companies have done bits and pieces of what Harris calls the perfect portal. Now they need to leverage past investments and identify opportunities to deliver on the investment. Consolidation is the first step to creating the uberportal that will allow you to have more control of portal investments.

"We are in a world where we are trying to promote CRM, supply chain management and other types of relationships that are critical to us. The ability of personalization is important. One of the quickest ways of looking at the current optimum investment is to start looking at centralization," Harris said. "Many companies have various disparate content information systems spread across the organization and many times the content in these systems won’t be 100 percent matching. So if you start dealing with centralization, you can have reduction of storage costs. All of a sudden you can be focusing on consistency, which is going to promote accuracy and on target interaction with customers. You can then make a portal sticky. You want to have features so that customers will continue to want to come back. So focus on financial investment planning and having information news releases. Having some of these features or a niche will attract customers and keep them returning."

"Portals need to be both vertical and horizontal in the insurance industry. As you deal with horizontal vendors, realize there are certain things that are missing from their packages and figure out the best way to start addressing those vertical requirements. Understand that vertical requirements have to be fulfilled whether it means going with a vertical portal vendor or doing it yourself," Harris said. "And also you want to ensure real-time integration with core systems and content/information sources."

Portal technology can help insurance companies get closer to customers, improve interactions with agents and business partners, and achieve operating efficiencies. Consolidating your portals into one uberportal, and adding personalization and transactions are great ways to leverage your current portal investment. With a little extra investment, companies may begin to reap the long-awaited rewards from their portals.

Contact Resource:
resource@loma.org