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Are We There Yet?

Anytime, anywhere computing is progressing in the insurance industry, but for most applications there still are strings attached.

Bandwidth Blues

Acknowledging the modesty of the initiative, Buskard insists that such an effort is characteristic of the wireless opportunity as it exists today for insurers. ""From a ubiquitous computing standpoint, there's really not a huge amount of bandwidth available to get very sophisticated high-performing applications available everywhere around the country,"" he says. ""You also have a different form factor, taking what you can comfortably put on a 15-inch display to what you can put on one of these three-inch jobs.""

There's also the trouble of selling consumers on the new technology, to say nothing of going from 56K transmission, at the low end, to 19.2Kbps, if you're lucky, on a wireless device. Gartner's Oliva argues that insurers should learn from how slow consumers have been to use the Web to buy insurance. ""Wireless will probably be even slower,"" he says. ""Insurers are looking at potentially big investments in anytime, anywhere, so they have to ask how long it's going to be before it's actually adopted for purchasing.""

But before simply jumping on the wireless bandwagon, insurers should ask what benefit wireless would bring to the company. The desire to remain competitive can drive companies to keep up with the Joneses—even if the Joneses are maxing-out all their credit cards. ""Some people look at the technology first and say 'We've got to be 3G!' or 'We've got to be 802.11 wireless LAN!' a protocol extending Ethernet to wireless before they've even thought through what it is they've got to do,"" says John Stehman, principal analyst, Robert Frances Group (Westport, CT). While it may sound crazy, ""The problem with probably 80 percent of wireless applications today is that there is no business application profile in place to define it,"" according to Stehman.

In short, before you do it, know why you're doing it, what you're going to get out of it, who will be using it, what they will expect from it, and what it's going to take to get it done, says Stehman.

""With a business application profile, you're talking about the quality of service required to provide the reliability, scalability and performance needed,"" Stehman says. ""Do you need service-level agreements? What kind, exactly? Do you need to manage the devices, add infrastructure? What is it going to cost to roll this sucker out?"" And even if all of these questions have been addressed in turn, if the insurer hasn't looked into the actual availability of the technology, a rude awakening may be on the horizon.

The importance of understanding one's own needs is even greater because the wireless operator isn't likely to fill in the blanks—and for a very simple reason. ""Most of the wireless operators really don't understand your requirements,"" Stehman says. ""The enterprise has to have firm requirements for the application they are rolling out, and they must review it with the wireless carrier point-by-point.""

Part of the problem, according to Stehman, is that until recently, financial services just hasn't been the business of wireless carriers, who had plenty of trouble keeping up in the competitive sphere of mobile telecommunications. But it is their business now, as next-generation wireless involves wireless providers migrating from voice protocols to Internet protocol (IP).

""This is going to be very important for data applications,"" Stehman says. ""The value proposition from the wireless operator to the business has to be, 'Mr. Business Customer, we can guarantee you priority through our network. This is how we're going to do it, and this is what we'll do for you if you fail.' IT people already understand this, but the wireless carriers don't, because their networks are not IP-based yet.""

So, if an insurance company's IT shop's expectations are not set properly at the beginning, the results can be disappointing, to say the least. If an application has to run 24/7 with a maximum of five seconds delay to fulfill the business case, what happens when no wireless operator can be found to commit to that level of service? ""It's going to mean one of two things,"" Stehman says. ""Either the insurer is going to compromise its business application requirements and reset user expectations, or it simply shouldn't do it.""

The fact is that users have inflated expectations of the current possibilities of wireless, and the wireless carriers themselves continue to peddle service as if it were voice. ""And what is voice? Sometimes we can connect and sometimes we can't. That's got to stop,"" Stehman says. ""Those carriers that get it will go back to their engineering network guys and say 'How are we going to do this stuff?' so that these networks can carry voice and network together.""

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio

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