In the personal property and casualty industry, products have become so commoditized that low price, coupled with outstanding service, is often the differentiating buying factor for the consumer. With the mainstream acceptance of the Internet, "business as usual" has evolved into 24-hour customer service that is delivered seven days a week. With more people experiencing the convenience, reliability, and immediacy of conducting business online, studies show that within five years, two-thirds of personal lines' customers will be connected to the Internet. Unfortunately, many insurance companies currently do not have the necessary people, technology infrastructure, or business processes in place to meet these trends.

Of particular concern to institutions should be customer profitability, or lack thereof. For a typical multi-line, multi-channel retail financial institution, a small percentage of customers provide the vast majority of profits. Today, most insurance companies are operating on a foundation of patchwork information systems dating from the '70s and '80s with business values that are difficult, if not impossible, to quantify. Historically, technology has been brought in to address specific short-term processing challenges with little regard to the company's overall long-term business strategy and objectives. As a result, the majority of companies possess outdated, inefficient legacy systems that provide virtually no insight into their insureds' behavior, profitability, and product preferences. Furthermore, maintaining old file structures and outdated hardware is placing a huge drain on staff and budgets-resources that are desperately needed to take on new customer-focused initiatives. Not surprisingly, outdated technology is supporting outdated operating procedures that are based on product lines and/or geography. To prosper, it is imperative for firms to have information systems in place that provide a "holistic" view of customers and insight into their particular wants and needs. With flexible, leading-edge computer systems providing instant access to up-to-date, detailed information-sometimes at the point of sale-cross-selling opportunities and profitability can be maximized. However, this requires much more than implementing a data warehouse or an electronic commerce application. Only through the fundamental realignment of people, processes, and technology can firms gain the capabilities necessary to accurately determine customer profitability, product ownership, and delivery channel preference, as well as product usage.

The world is changing exceedingly fast for all financial services companies. To maintain competitiveness and help ensure long-term survival, insurers need to completely understand their customers like never before-their behavior, actions, lifestyles, and preferences. "Business as usual" can create a no-win scenario defined by declining service, eroding market share, inflexibility, and expensive overhead. Unless insurance companies transition to a more customer relationship-oriented strategy and begin to leverage new distribution and customer management methods, they face a continuous decline in market share to more nimble competitors.

ECommerce is changing the way in which traditional insurance business is done. Customers are looking for quicker, more convenient and more accurate customer services; insurers are competing in lowering transaction cost, shortening marketing period for new products and establishing closer relationships with their partners. The key to succeeding in this dynamic business world is to enter the eBusiness, fast. However, the question is how complicated is that?