TECHNOLOGY CRUCIAL, SAYS KEMPER CEO

CHICAGO-Although the insurance industry may seem obsessed with merger mania, one executive maintains that bigger may not necessarily be better.

"I don't know that there's any specific advantage to size" in the insurance marketplace, said William Smith, president and chief executive officer of Kemper Insurance Cos.

Mr. Smith, speaking recently at an Assn. of Professional Insurance Women luncheon in Chicago, noted that "having an awful lot of people (in a company) is a cumbersome task."

While servicing customers is paramount to a company's success, maintaining personal contact with customers doesn't literally have to be face-to-face, he said.

Mr. Smith noted that technology will enable insurers to communicate with and service customers without meeting them in person all the time.

"The winners (in the future) are going to be those who have figured out how to put someone in front of each person,either in person or electronically," he said.

In addition to changing the nature of customer service, technology will change how people within a company work with each other, according to Mr. Smith. "This is going to lead to some redefinition of what is teamwork."

Ultimately, the winners in the insurance marketplace of the future will be "highly focused regional companies," Mr. Smith predicted.

Mr. Smith also noted that with the explosive growth in small companies started by entrepreneurs, many of them women, insurance companies are going to have to look for customers in non-traditional places.

Small, home-based businesses employ 14 million people, Mr. Smith noted. As a result, there has been a "profound change in where our customers really, really are."

Small companies represent "a significant market opportunity for" Long Grove, Ill.-based Kemper, Mr. Smith said.