March 13, 2007

By Nathan Conz

In an effort to offer increased value to customers and stay competitive in the marketplace, Commerce Banc Insurance Services (Cherry Hill, N.J.; $1 billion in annual premium volume) has launched a new service that allows customers to get instant automobile insurance rate quotes and initiate their purchase of coverage online. The insurance agency, a subsidiary of Commerce Bancorp, offers the new service through a partnership with Travelers, a business of St. Paul-based The Travelers Companies ($113.76 billion in total assets).

Travelers has similar partnerships with other insurance agencies, says Peter Crichton, director of partnership marketing at Travelers. "We're trying to reach those customers whose preference is to shop online and who might normally only be exposed to direct-writer companies," he says. "Here, we can go into that segment of the marketplace and bring them to Travelers through an independent agent."While Travelers' "co-branded sites," as they're called, are capable of handling purchases entirely in an online environment, the Commerce site doesn't yet offer that option. However, Crichton says that most customers prefer to speak to an agent before actually purchasing coverage, even if they initially begin the process online.

On the Commerce co-branded site, potential customers do have the option to initiate a purchase. If visitors indicate that they're interested after reviewing their quote, their contact information and their quote are uploaded onto Travelers' processing system and Commerce agents are notified via e-mail. "We actually go into the Traveler's processing system. We see your quote and we can call you up and talk to you about it," explains Rosalie Grosso, Commerce Banc Insurance Services' vice president of personal lines. "If nothing has changed, we just hit 'issue' and it's done. It's a very quick process."

"For both the distributor and the carrier, the economics are much more favorable when consumers initiate the purchase process online. It expedites the process and takes costs out of the acquisition," Crichton adds.

Commerce executives say that Travelers was chosen as a partner because the carrier is in all markets within the agency's footprint and was willing to work on a special program basis.

Special emphasis on streamlining and expediency steered Commerce away from a multiple carrier online presence. "The day may come when we actually do get more involved in providing online, multiple carrier rating pieces," says Timothy Casey, chief information officer for Commerce Banc Insurance Services, "but the technology is such today that to do that is a cumbersome process."

The co-branded site is essentially "a Web-linking integration" from the Commerce site to the Travelers site, Casey says. Potential customers access the instant rate quoting service from a link on the Commerce site, but the service is actually hosted by Travelers and uses the insurance carrier's software and tools.

The service launched in October, but Commerce refrained from marketing until February, when the agency was comfortable with the service's functionality. "We started out very, very slowly, but now we're getting there," Grosso says. We've received about 200 to 300 contracts so far." In all, more than 2,500 people have visited the site. Crichton calls the early returns "favorable."

In the future, Commerce will consider "buy now" capability for the service and similar partnerships in other lines of business. Eventually, Commerce executives expect this to be a bigger part of the business. "I think it will be significant, but it won't be the only channel of distribution. In order to get a good response, you need to have presence with your customers in multiple ways. That's what we're working on now," Grosso says.