Though slow getting started, the insurance industry has a rapidly growing presence on the internet. But just what can the world wide web do for the industry? Plenty, in Tal P. Piccione's opinion.

Does the world wide web have a place in our business? I asked myself this question while pondering marketing strategy for last year.

The internet was becoming a hot topic of conversation at industry meetings, but I wondered how it could be a major factor in the reinsurance market where broker/client relationships traditionally have been highly personal and often continued from generation to generation.

Can this type of relationship be developed and/or maintained through the internet? Does the internet provide a broker the opportunity to bring his or her products and services to the attention of prospects whose doors would be closed to a request for a personal call? These are some of the questions I was asking.

At that point, I stopped to think about my own experience starting a company 10 years ago in what was then a tradition-bound industry where doors generally were closed to newcomers. Yes, I had been in reinsurance brokerage for many years with one of the giants, but I still found it hard to break in as an independent upstart. The key to success, I reflected was innovation. At U.S. RE we came up with some new products that enabled us to compete effectively.

Maybe the same would be true with the world wide web, I thought. As a revolutionary, new medium of communication, the internet was bound to become a factor in our business. So, we jumped in. The result was a web site,, which came on-line late last year. Based on early results, I concluded that in today's environment of instant global communication, reinsurance brokers who ignore the world wide web do so at their peril.

As we approach the millennium, the insurance industry, though slow getting started, has a rapidly growing presence on the internet. A study by Booz Allen & Hamilton found that the insurance industry served fewer than 10,000 customers online in 1997, compared to 3.6 million by banks, and 2.7 million by securities brokers. However, our industry is playing catch-up. According to Datamonitor, an internet research firm, approximately $1.7 billion in insurance premiums will be sold on-line by 2001. The same study finds that 60% of insurers will offer on-line purchasing by that year. Conning & Company predicts internet sales of insurance will reach $6.3 billion by 2006.

Auto and home insurance is being sold on the web today. Travelers Property Casualty introduced a pilot programme to sell auto policies through the internet in Alabama early last year and were expected to expand the programme to all 50 states by year-end. In December, The Hartford announced a five-year agreement with Juno Online Services allowing internet users to receive information and price quotes for auto and homeowners insurance. Before long, we can expect the web to become an important factor in small business insurance and other commercial lines.

Reinsurance is becoming more and more a commodity - at least in so far as the basic forms of traditional protection are concerned. So, we can expect reinsurance brokers to escalate use of the net as a way to communicate with their clients and markets. Major reinsurance industry organisations in the UK, Europe, and the US have joined together to develop standards for electronic commerce.

At U.S. RE, we first thought of our web site as a vehicle to create greater awareness of our company - in other words, a new form of advertising. We designed from the viewpoint of potential customers. It contains comprehensive information about the company's products and services. Key executives are identified and profiled. Our various subsidiaries are described. News about the company is constantly updated. Our press releases and the company newsletter, U.S.REViews, are published on the site and archived for reference. We offer visitors to the opportunity to communicate with us by e-mail. The site provides a vehicle for prospects to communicate with us. This can lead to the kind of personal relationships that have been the essence of successful reinsurance brokerage.

In recent years at U.S. RE Companies we have entered a number of new areas, created subsidiaries, invested in other insurance entities, and developed new products. We included all this information in our web site. The aim is to build awareness of our evolution from a traditional reinsurance intermediary into a financial services group rooted in reinsurance. Beyond that - and most important - we expect to become over time a significant producer of leads for our brokers.

In designing the site we placed great importance on making it easy to use. Our designer produced attractive graphics, convenient ways to navigate, headlines with links to full texts of newsletter articles and releases, plus ways for the user to go directly to that part of the site which contains the material he or she is seeking. We went on-line a few months ago. A few bugs had to be worked out of the system, but the introduction was relatively smooth.

Next, we focused on how to generate traffic to the site. This is a challenge for any company web site, but we think we have found the answer. To extend the reach of, we established a Business Centre on, the insurance industry super site. The Business Centre contains a summary description of U.S. RE and product highlights. When the thousands of users who click into daily seek information on reinsurance our Business Centre is displayed along with a direct link to our own web site. is one of about 40 sites sponsored by Vertical Net Inc., the pre-eminent publisher of business-to-business information on the internet. The Vertical Net sites provide the most comprehensive source of news and data about each industry covered. The company began with a site in the water industry and quickly expanded into engineering, chemicals, architecture, and other areas. These sites provide a convenient way for professional people to communicate with each other as well as access to volumes of industry information that is easily searchable. is Vertical Net's first venture into the world of financial services.

A major advantage to us and other sponsors of Business Centres is Vertical Net's multi-million dollar expenditure to purchase so-called keywords on the major search engines such as Yahoo, Alta Vista, and Excite. We specified keywords relating to reinsurance. Vertical Net purchased these keywords from the search engines. When these words are entered on the search engines by any of the millions who click in daily, they can be linked directly back to where our Business Centre will bring them to We expect this to be a significant generator of traffic.

So far, we are pleased with the launch of However, we did learn an important lesson early on. A web site is a living document. If left idle or unattended, visitors soon will lose interest. A professional manager who is in touch with developments in the company should be assigned to monitor and update the web site. Generally this will not be a full time job. We asked assistant vice president Susan Lubalin to take this on as an added responsibility. She is a seasoned broker specialising in the domestic and international sectors. Ms Lubalin has a network of company and industry contacts. She checks the site daily, sees to it that personnel changes are recorded, new products included, press releases and newsletters added as they are published. She channels requests for information to the correct company source and follows up to see that answers are provided and leads followed up.

The site currently serves primarily as a means of exposing U.S. RE to a wider audience. However, we look to the day when will enable us to transact reinsurance business on a confidential, secure network. In developing sales opportunities we envision the site as a support system for our brokers. We do not see it as a substitute for the personal contact that is so important in our business.

Out of 100 company visits a broker may develop 20 “suspects”. Of these, six may become serious prospects. In the end, he or she may make two sales. Effective use of the internet may enable us to shortcut this process and get to prospects faster. Given the clubby nature of our business historically, it is often difficult to get in the door of a target company that has been doing business with another broker for a long time. An interactive web site will enable the broker to look at our products and obtain some critical information without a personal meeting. If our basic business proposition proves competitive, the prospect may well bring us in. Without the web site we might never get past the receptionist.

We see the world wide web as an increasingly important vehicle of communication for U.S. RE, a significant means of generating new business, and at some point, a secure way to close deals.

Tal P. Piccione is chairman and chief executive officer of U.S. RE Companies, Inc.