Electronic integration and strategic advantage: A quasi-experimental study in the insurance industry

Strategic advantage through'information technology is a popular and an important theme, but the extent of research support is minimal, anecdotal, and sporadic. This paper reports the results of a quasi-experimental study on the impact of dedicated electronic integration [between a focal insurance carrier and its independent agents in the property and casualty (P&C) market] for the focal carrier. The results indicate that the agents that are electronically interfaced with the carrier report improvements in a set of four performance factors in the expected direction (six months after system installation), but statistically different from a matched set of non-interfaced agents (based on size, state, and location category) only in terms of increases in new business policies, but not in terms of effectiveness-namely, neither increases in premiums and commissions nor operating efficiency. Some explanations, extensions and research implications are outlined.