Where are we now

(Reprinted with permission from Alberta Broker, Feb-Mar 2002 issue)

Internet communications on top of telephony bring an
immediacy to communications. Thus it is a challenge to write for the Valentine’s Day
period when I am wrapping Christmas presents. In spite of the timing, my perspective on
the year behind and the one ahead.

The fall 911 WTC tragedy touched us all – and it too has
Internet stories. Closer to home, let me touch on three areas: the consumer, business and technology.

The Year Past

The Consumer:

The acceptance of the Internet by the consumer is increasing. A free daily newsletter
from emarketer.com gives tidbits, Canadian too, about the Internet.

A survey by Pollara Inc., Canadian Internet users could
increase their online sales by as much as 40% in the upcoming holiday season. The survey
also found that 14% of Canadian Internet users are expected to do their holiday shopping
online, which is up from the 10% recorded in a 2000 survey. The online shoppers are
expected to spend $470 Canadian on average.

Taylor Nelson Sofres (TNS) conducted a survey in July and
September 2001 on the use of online government services in 27 countries. Norway has the
highest level of e-government usage, with 53% of Norwegians tapping into e-government
resources over the previous 12 months. Other high scorers include Denmark (47%), Canada
(46%), Finland (45%) and the US (34%).

Similarly Canadians use on-line banking and debit cards way
more than our southerly neighbours. Look at the lineups to use the Internet terminals at the local library.

My 15 year old son is a prime example of a recent Globe
& Mail article which noted how teens’ communications habits have changed dramatically
towards chat over the web – that’s him.

Many of our Canadian Consumers are being touched by the
online world, and now they have different expectations – of us.

Business too has accepted the Internet tool, and the
transition has been this year from early adopters to business as usual.

According to SES Research, Inc., 46% of Canadian SMEs
(small- to medium-sized enterprises) have bought or sold online in 2001 — up from 41% in
2000 and just 27% in 1999. The report also finds that the value of these online
transactions in 2001 totaled roughly $2 billion, compared to just $760 million in 2000.

I also subscribe to several discussion lists from
AudetteMedia (www.audettemedia.com).
With a focus on good content and not on advertising,
they were not self-sustaining. A conversion to a paid-subscription list was a major
decision, but done. The media frequently reports on others now considering the same.

The tenor of the Internet is changing. The dot.coms are gone and the business reality
is coming to the fore. People will pay for things from which they receive value.

Internet technology

Internet and related technology and infrastructure is
becoming more robust and better all the time – in many cases all that I need. Do I really
care about the next version of an Internet browser?

  • The move for newsletters from text e-mail to
    html looks really good and increasingly common. This is one of the things we will do at
    Insurance-Canada.ca this year for our free newsletter about insurance in Canada, for
    insurance professionals, with a technology thread through much of the content.

  • Information is easier to find, the search
    engines are more comprehensive – and fast. Google has now indexed over 2 billion pages,
    including 550 from our site alone (I didn’t know we had that many!). How do they search
    their pages so quickly? – a news item notes they use over 8,000 servers.

  • Very common are Life or P&C company
    announcements about another Internet function for their distributors or customers – Sun
    Life and Clarica (separately) for group customers, Allstate for online quotes, kanetix
    with more markets, RBC Insurance on-line quotes, London Guarantee for broker Fidelity
    bonds, Clarica for secure messaging, etc. Many more, for restricted audiences like
    brokers, are little-publicized.

A peer once said that a tool will be used if it meets two
characteristics: provides value, and is usable (easy to use, fast). The Internet is
obviously a tool which now enables those characteristics like never before – up to us
providers to provide the informational or transactional value.

Not unexpectedly, the Internet has deservedly become more pervasive and entrenched in 2001.

The Year ahead

No crystal ball here, but I predict:

  • The Consumer will use the Internet more in 2002 than previously

  • The Business community is readier in the
    back-office than before and will turn that to greater competitive advantage – in the
    supply and distribution chains and to the consumer. More focus on shorter projects with
    real value deliverables, and managing the benefits for short-term ROI.

  • The technology is stronger, faster, more
    reliable, and easier to implement. The IT services industry is along the learning curve,
    and helping customers do more, quicker.

In a word – More…

Yes Virginia, insurance too is making the transition. In 2002:

  • the CSIO broker portal will move to
    production, riding on top of company-unique implementations. The questions will include:
    What is critical mass? (Different answer for each broker), and When will it be reached (same answer).

  • in life distribution, similar activity will
    move forward, but less predictable yet

  • in P&C claims, hubs like those from InsuroCity and Correlation Technologies
    will prove themselves and migrate from concept and pilot to beneficial production.

In addition to transaction-based systems, early investments in people-supporting
functions will occur:

  • distance learning and training form a subset of knowledge management, and

  • collaboration tools, on-line meetings, for improved teamwork

The large global players have been investing here; the
transition to mid-size companies will increase and we may see a taste of it.


Although the Internet is just another way of communicating,
its impact is just starting to be felt. At the end of the day people have trust in and
will do business with those with whom they have a relationship. An insurable but
non-predictable risk has a cost – the value of insurance requires a trusted relationship
to best describe and service it.