NU Online News Service, Aug. 3, 11:08 a.m. – Quotesmith.com Inc., Darien, Ill., an online insurance broker, says it has reduced its full-time staff by 25 employees, or 23%.
The employees were handling initial processing of term life applications. Quotesmith.com has hired two outside companies to do the work.
Quotesmith.com has been experimenting with outsourcing some application processing for two years. When outside companies handled the task, “the results were better than ours,” Quotesmith.com Chairman Robert Bland says.
The two outside processing companies call online customers and take much of the information needed over the telephone. The companies then send the customers forms with many of the blanks already filled in.
Bland admits that he is not sure whether the outsourcing fees will cost less than the salaries and benefits of the departing workers.
But “we think we’re going to save money, and we think we’ll increase our closing ratios,” Bland says.
Sending out partly completed applications could increase closing ratios, by overcoming prospects’ resistance to dealing with a “15-page application,” Bland adds.
Quotesmith.com says it is offering the terminated employees a cash separation package, but that it does not expect to incur “any material or special charges.”
Bland says no further reductions in staff are anticipated.