A handful of tech-savvy insurance agencies are realizing the efficiency of the Internet as a marketing and sales tool. But they aren’t crowing about their success.

“Why would I want 20 competitors out there?” says John Jordan, an electrician who moved to insurance sales in 1992.

For competitive reasons, Jordan divulges scant details about the size of the niche he has built on the Internet. The certified financial planner set up his www.term-10quotes.com Web site, based in New Hamburg, Ont., more than four years ago. He will only say he’s “very comfortable” with the leads and the sales his site generates.

The guts of the enterprise is simple. Consumers searching the Web for basic term insurance products will land on sites such as Jordan’s more often than not. They will read a little about the product and will want to know what it costs. His Web sites uses life insurance quotation software that scours the product marketplace for rates. Given a few parameters, it churns out a term quotation.

The trick is to extract a name and phone number from the Net surfers, who tend to like anonymity. Some of these surfers will leave names; some will not. Others leave phoney names, but the pure volume of interest pays off. Advisors simply call up the lead, offer their services and begin selling.

This tends to alleviate the need for cold-calling. When too many people say “no” to advisors, it eventually drives them out of the business, Jordan says. Now, he no longer has to face that challenge: “Now, there’s no such thing as a cold call.”

Although the former Metro-politan Life and RBC Insurance advisor runs a one-man shop, Jordan has been able to keep his Web site among the top Google hits for term insurance in Canada. He admits he’s no technology whiz but, with a bit of sponsorship and search engine savvy, he has managed it basically by himself.

Jordan is one of several independents online. IDC Insurance Direct Canada Inc. , owned by 64-year-old self-professed Internet junkie Russ Smart in Langley, B.C., runs a more robust service at

These independents share Internet space with major sites such as www.kanetix.ca, run by Kanetix Ltd. , which is majority-owned by Canada Life Assurance Co. , itself owned by Winnipeg-based Great-West Lifeco Inc.

For his part, Jordan says there is nothing like the Internet for marketing term insurance. He tried print advertising — “Nothing,” he says. Speaking engagements were only moderately successful: “I think people are seminared out.”

Jordan’s Web site was inexpensive to create, but it has taken time and money to develop a presence. A friend of Jordan’s who builds similar sites for U.S. insurance reps told Jordan to try it. The timing turned out to be great. “Four years ago, I had my worst year ever,” Jordan says. “This year, I had my best year.”

Unlike in the U.S., insurance underwriting in Canada is still a paper-based transaction. Like others who ply their trade over the Internet, Jordan still needs signatures and witnesses. And “para-med” nurses will meet clients, who also must send him copies of their ID. Jordan is registered in every province, except Quebec — a cost he says is more than worthwhile.

A Canadian online insurance community of advisors and service providers — who all seem to know one another — has grown steadily for a decade. The Canadian marketplace nowhere as competitive as it is in the U.S., says Glenn Cooke, president of Insurance Squared Inc. , also based in New Hamburg, Ont.

“In Canada, the insurers are mostly reluctant to talk about [online] business,” says Cooke, a Canadian-licensed rep who also develops Web sites for the industry on both sides of the border. “The insurance agents haven’t really picked up on it yet. We’re a little more conservative up here.”

Cooke says most Canadian agents aren’t Web-savvy, and they don’t like the heavy-volume “numbers game” online. Many of the leads are soft, he admits, but once the Web site is up and running, it is effortless to attract the numbers and pursue the strong leads. About 25% of hits are strong leads, he adds.

“The consumers online are different,” he says. “They are educated. They go online for something they’re ready to buy.”

@page_break@Insurance Squared is authorized by Compulife Software Inc. of New Jersey to distribute its quotation software, which is integral to the online insurance world. (The other software provider is Lifeguide, owned by CompuOffice Software Inc. of Richmond Hill, Ont.) Compulife also runs the www.Term4Life.com site that spits out term life insurance quotations for Canadian and U.S. prospects. Compulife markets services for advisors to set up online businesses and it generates the quotes for Smart’s IDC Web site.

Smart, IDC’s CEO, built his Web site more than eight years ago, beginning with only education and contact information. Since then, he has expanded the site to include quotations, which he divvies up among a team of about 20 associate advisors, with whom he splits commissions 50/50, he says.

“Everybody who signs with us signs a quite stiff non-compete, non-disclose agreement,” says Smart, whose Web site notes he has a master’s degree in business administration from the University of Toronto. “I saw this as a business opportunity very early on.”

Other models for Internet-driven businesses are also available. Many Internet-driven sites will sell their leads to interested advisors.

Smart admits there were plenty of naysayers in the insurance industry about the usefulness of the Internet for the insurance business, but he always believed there was a way to make it work.

He was a computer junkie in the 1960s and ’70s, long before the dot-com boom in the late 1990s, when he set up his own site at the URL he holds today. His watershed moment came in May 2003, when he was an advisor with Vancouver-based Custom Plan Financial Advisors Inc. He closed 38 life insurance applications in one month as part of a company contest, which he won — thanks to his Web site.

“I would say three-quarters came through the Internet,” says Smart, who had to hire administrative help to do all the paperwork.

He registered and incorporated IDC in every province more than two years ago, and last February he left Custom Plan to join a new managing general agent, Vancouver-based Canada Financial Group Inc. “I’m converting us into a virtual MGA for people all across the country,” he says.

“I don’t golf, I don’t play video games, but this was my hobby,” he adds. “Still is my hobby.”

The insurance application and underwriting process is a long way from automation. That could explain why so little research has been compiled to detail the progress of the online insurance channel. Even in the relatively simply auto insurance underwriting world, recent data by Massachusetts-based Forrester Research Inc. suggest clients still want to speak to a human being.

“Prior to submitting an application, most auto insurance prospects want to talk to someone,” says the Forrester report, which was issued in the third quarter of 2006. “Of those who went on to apply online, 27% said they turned to an agent or advisor to research the policy.”

The Forrester report, which surveyed more than 4,000 policyholders in the U.S., suggests that although prospects want to search anonymously online for the lowest price, they still need assistance with the final decision because policies can be different. Forrester recommends online insurance marketing should give price quotations with no strings attached, but should also include pointed service and “hand-holding” messages.

For some low-cost, niche life insurance products in the U.S., the entire application process is done online. Canada’s Manulife Financial Corp. has also introduced some online products, but their costs reflect the fact that the underwriting is processed afterward.

According to some online sources, the Canadian insurance industry has deliberately allowed the Internet world to leave it behind. It lags other financial services by a decade or more, in terms of thinking and business investment, says Gregory Ellis, co-founder of Kanetix in Toronto: “It’s also risk-averse, operationally.”

For manufacturers, supporting too much online activity risks “channel conflict” with the advi-sory community. The industry does not want to cannibalize the traditional business, Ellis adds. Canada Life did not return several voice-mail and e-mail messages about Kanetix.

Ellis, who would not disclose the details of Kanetix’s affiliation with Canada Life, says that sooner or later, the insurance industry will have to change. More than any segment of the financial services industry, the average age of advisors in the industry is rising, he notes, and with that, a potential connection to a growing online distribution channel is drifting away.

“Going forward, we have to find a way to serve people who need $500,000 life insurance policies,” Ellis says. “Who can afford to drive 20 minutes there and 20 minutes back to meet a client for a product that can be sourced online?” IE