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When 9- month-old Ian Lochtefeld wakes up at 6:30 each morning, it's time for his mother, commercial lines broker Joanne Lochtefeld, to go to work.

After feeding and playing with her son, Ms. Lochtefeld logs on to her computer and responds to e-mail messages directed to her company's home page on the World Wide Web.

Some of the messages are junk mail, but many come from clients requesting information or changes in policies. For example, one morning recently Ms. Lochtefeld responded to a client, a software consulting firm, that had e-mailed her the night before seeking to increase its property insurance limits after buying a new computer. Ms. Lochtefeld was able to get the client a quote and update the consulting firm's policy by the time Ian's nanny arrived at 8:30 a.m.

Ms. Lochtefeld, 35, who has two part-time employees, started San Francisco-based Cymru Insurance Services in 1994 and launched its Web site that same year. She is proud of the speed and accuracy with which the brokerage responds to her clients via the Internet, many of which operate high-tech businesses in downtown San Francisco.

"By 8:30," she said, "I've already responded to eight to 10 people."

"It's more effective than the Yellow Pages," she said of marketing her services on the Web. And by exchanging information online, Ms. Lochtefeld doesn't have to stay on the phone with each client for 45 minutes.

Will more brokers do business as Ms. Lochtefeld does in the future? More will have to in order to survive, according to new research.

Agents and brokers will face new competitors as insurers increasingly use the Internet to sell policies directly to customers, a recent report predicts.

The report, "Global Insurance to the 21st Century," forecasts dramatic changes for the insurance industry. The study, which focused on personal lines, was jointly prepared by The Economist and International Business Machines Corp.

"Consumers want to comparison shop," said Alice Morrison, a principal of IBM's Consulting Group in White Plains, N.Y. Insurance agents used to make those comparisons for customers; now, with Web site operators such as InsWeb-www.insweb. com-aiming "to be a one-stop shopping mall for insurance information and transactions," the traditional role of agents and brokers is changing, she said.

The changes in the insurance industry wrought by new technology are similar to those in financial services in general, said Paula Sinclair, author of the report and a senior editor at The Economist Intelligence Unit.

"People want to go as directly as possible to providers," Ms. Sinclair said.

The report predicts a shrinking role for agents and brokers in the personal lines market over the next five years. Based on surveys with 160 insurance executives and 40 personal interviews, the report predicted that insurance companies increasingly will use the Internet to assess policyholders' needs and sell policies.

If used properly, however, the Internet also has the potential to increase the amount of business that brokers and agents produce, said Randall Cole, vp-North America Consulting Services Insurance Industry for IBM in White Plains.

"They'll have more current information than they do today," he said. "Technology will help them understand their clients' needs in detail and provide customized solutions."

Ms. Lochtefeld credits the Internet with increasing business for her brokerage.

Cymru Insurance Services' Web in October 1994, and Cymru has seen new business generated by the Web rise each year. In its first year, "Cymru had a 5% increase" in new business from its Web site, Ms. Lochtefeld said.

Although she didn't set out to target high-tech clients, it turned out they were most comfortable with doing business on the Internet.

As Ms. Lochtefeld established a niche with San Francisco's high-tech companies, Cymru's business grew. In 1996, 16% of new business came from the Web, and she predicts that percentage will rise to 20% this year, with Cymru's annual gross revenues reaching $125,000 and $150,000. Most of her policies have premiums ranging from $500 to $3,000, she said. Her Web site's home page looks like a simple brochure and fills the computer screen. Beneath a photo of a clock, it states her name, phone number and e-mail address. It lists coverages she places-commercial general liability, property, automobile, workers compensation and miscellaneous professional liability-in bold. Brief explanations regarding available coverage terms and limits follow.

Although doing business in cyberspace can be easy, it does have limitations.

For example, Ms. Lochtefeld, who is licensed in California and five other states, said she also receives inquiries from businesses in states where she cannot sell insurance. When that happens, Ms. Lochtefeld refers the inquiries to her insurers.

The Internet also played a role in naming her company. In 1994, Ms. Lochtefeld wanted to register a name reflecting the nature of her business but discovered that the phrase "commercial insurance" had been used thousands of times in Internet titles. Looking for another approach, the native of Wales named her business Cymru, which means "whale" in Welsh.

As Ms. Lochtefeld's clients expand, she is confident Cymru will grow with them. One of her software consultant clients, for example, recently saw annual sales grow to $4.5 million from $50,000, she said. "Now the bigger firms are calling."

Copies of the report, "Global Insurance to the 21st Century," are available for $575 by contacting Kristen Agrati at The Economist Intelligence Unit, 212-554-0600; e-mail: