To respond to the changing demands of their customers, insurers are experimenting with a range of distribution methods, everything from selling on the Internet to forming partnerships with banks.

For more than an hour, a panel of insurance industry executives dissected the topic - distribution of property/casualty products in the 21st century - at the Joint Industry Forum held here on Wednesday. Nancy Carini of Conning & Co. presented the highlights of a study the research company did of the changes going on in the distribution systems of the property/casualty industry.


''Conning has been tracing developments in distribution for more than 10 years,'' she said, ''and never before have we sensed such a dramatic shift occurring within the property/casualty industry.''

She said the change is just beginning to be seen as about a third of the 50 property/casualty insurers are using multiple distribution channels for their personal lines. About half that number are using them for commercial lines.

The traditional division of personal lines insurers between agency writers and direct writers has blurred considerably. The study mentioned that A.M. Best continued to separate the personal-lines insurers only into direct writers and agency writers.

''Anyone following today's insurance news,'' Ms. Carini explained, ''realizes that the marketplace is not conforming to such a simple paradigm anymore.''

Conning research indicated that of the top 50 personal lines insurers, 14 (28 percent) are pure direct writers; 17 (34 percent) are pure agency writers, but 19 (38 percent) use multiple distribution channels - a combination of independent agents, captive agents, salaried employees, direct response, direct bank partnerships or electronic commerce.

After hearing the results of the Conning study, the panel gave their views of how the transformation from one distribution channel or the other to a broad array affected their companies' operations.


Robert T. Herres, chairman and chief executive of USAA, believes the industry is undergoing an evolution in its shift to new distribution methods.

He said his company has used direct mail and telephone sales to reach new customers, and would use the Internet. ''We must adapt our methods of selling and servicing our products,'' he said, ''to the expectations of a new generation.''

But he cautioned that a lot of testing has to be done before spending large amounts of capital on marketing on the Internet.

At USAA, ''we're thinking of taking five to 10 years to get ready for future systems,'' Mr. Herres said. We're looking at products, markets and seeing how to best use the Internet and ''hoping like hell we're right.''

But Robert V. Mendelsohn, chief executive of Royal Insurance and Royal & SunAlliance USA, declared the change in distribution systems is revolutionary, especially distributing on the Internet.

In the United States, he said, independent agents and brokers are used by Royal & SunAlliance to sell and service its products. But outside the United States, we use ''every kind of system to reach customers.''

He noted that no matter what kind of channel reaches customers ''we must at all times keep our eyes on our customers' needs.''

Daniel J. Cavanagh, president and chief executive of Metropolitan Property and Casualty Co., said an evolution is under way in the methods insurers use to sell their products.

Met P&C is a large supplier of employee plans. It uses the intranet, kiosks, payroll deduction, life agents and independent agents to market, sell and distribute its products.

One thing the company has learned is not to have all agents selling all lines. ''That has proved to be a failure,'' Mr. Cavanagh said. ''What we have found is that it is possible to sell different products to the same customer, but different sales people have to do it.''

Part of the Conning study showed that by the year 2002, insurers using independent agents and those using multidistribution systems were planning to shift business away from agent arrangements and move most of it to direct access channels, with electronic commerce getting the majority of the transfer business. This was not rosy news for independent agents.


On the panel was Bud Wilson, president of the Independent Agents of America, who forcefully presented the independent agents' view.

Mr. Wilson, chairman of Wilson Insurance Agency Inc., Chula Vista, Calif., exclaimed, ''We are the multidistribution system for companies. We want to be there. We welcome participation.''

Turning to banks' wanting to sell insurance, the panel seemed to discount banks' making any serious inroads into the insurance business.

''Banks have been selling life insurance for years but not very successfully,'' Mr. Cavanagh said. ''We're not sure banks are going to be any more successful in selling general insurance.''

USAA's Mr. Herres commented that he thought banks' selling of insurance is uncertain.

''I don't think they have any advantages,'' he said. USAA owns a thrift, but, Mr. Herres explained, it operates only as a convenience to USAA customers to provide them with a full range of financial services.

Mr. Wilson exclaimed, ''If God had wanted banks to sell insurance, she wouldn't have given them the Federal Deposit Insurance Corporation.''