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Speaking Up for VoIP

As Voice over IP matures, more insurance technologists than ever are clearing the hurdles that once hindered the protocol's full potential.

Has It Come of Age?

Still, despite the fact that the technology has been available since 1996, some business technology executives are not convinced that VoIP has come of age. A recent InformationWeek (Manhasset, N.Y.; a sibling publication of Insurance & Technology) Research VoIP Survey that crosses industries reports that uncertainty surrounding performance tops executives' list of concerns and continues to compromise corporate-wide use of the technology. According to the subset of planned and executed users among the 300 executives surveyed - who are responsible for the management or administration of their companies' networking or telecommunications products or services - quality of service, uptime and potential security risks are the most frequent catalysts of performance anxieties.

In an effort to clear up some of the uncertainty about the implications that a VoIP system might have on companies, business consultancy and systems integration firm BearingPoint has created an IP telephony readiness assessment tool. BearingPoint's Veron explains that the tool "provides a rapid template that helps users to get a look at the potential of implementing a VoIP solution in their environment. After an assessment is made, recommendations for the next steps that should be taken are provided. It's simple, it's posted on our Web site and anyone can use it - for free."

The assessment tool helps answer questions regarding whether or not a company's existing technology can support voice as an application transported over its private network; how an organization should prepare itself for the deployment and operation of these solutions; and what impact IP telephony will have on an organization, its customers and its operations. According to Veron, the assessment tool can help insurance companies understand the benefits of VoIP.

He points to customer service as an area that the technology can enhance. "If you're dealing with an insurance representative who moves around from branch to branch, you can call the same extension each time in order to reach him," says Veron. "We've seen this as a tremendous benefit because the transfer of calls is made much easier from the customer's perspective. This type of service is much more personalized." Carriers that decide to implement IP telephony can also enjoy the benefits of a single voice and data network and reduced long-distance call costs, he adds.

Thinking of Making the Switch?

For some insurers, however, making the switch to VoIP technologies is not feasible. Among the roadblocks faced by carriers are legacy PBX systems that are still under lease and far from reaching their life expectancy. In an effort to provide such companies with options, VoIP technology providers like Cisco Systems are beginning to offer lease buy-back programs, explains Cisco's Olslund.

"I believe that most companies would replace their PBX system if they could, just to gain productivity," he says. "But their return on investment may be impacted by the lease that still exists on their existing [telephone] solution." To lower the hurdle to adoption, Cisco's lease buy-back programs offer firms an incentive to make the move to VoIP technology. "We will pay the insurer for each PBX system and [analog] phone that they have," says Olslund. Aside from reduced long-distance call costs, he relates that carriers that make the switch to VoIP technology can also realize savings when it comes to moving, adding and changing phone lines.

"In order to move, add or change VoIP phones, insurers just have to unplug the phone and plug it into another LAN port with no configuration changes," asserts Olslund. With PBX-based systems, "Phone companies have traditionally charged $90 and up for each move, add and change. If you have lots of employees moving in and out, that can equal $25,000 a year," he says.

Best People for the Job

Because of the cost-effectiveness of adding, changing and moving phones with VoIP technology, Johnson Insurance (Monroe, N.C.; $5.5 million in assets) is able to save money on salaries by shifting the locations of its employees to regions with lower costs of living. The carrier implemented VoIP technology from AltiGen (Fremont, Calif.) one month ago. "We've reduced staff at our Charlotte, N.C., location," explains Todd Johnson, executive vice president of the property and casualty underwriter. "This is very important because the cost of living in Charlotte is much higher than in our two other locations. We can add a position to deal with the phones at one location and remove that position from our Charlotte location. That immediately cuts $4,000 to $6,000 off of our annual payroll expense."

Although the carrier was a little apprehensive when approaching the project, Johnson is pleased with its results. "I had concerns about VoIP's reliability, especially since our three remote locations only have a standard high-speed connection," concedes Johnson. The technology, however, "provided a cost-effective way to accomplish a 'single-office' atmosphere. We are able to route calls to the employees that possess the appropriate skills set for each call. This ultimately allows employees to focus on doing what they are good at."

Johnson explains that the carrier's Jenesis (La Miranda, Calif.) agency management software allows Johnson Insurance to track quote closing percentages. Armed with this knowledge - and the flexibility of IP telephony - the insurer has the ability to route callers looking for policy quotes to the individuals with the best closing rates. Additionally, employees who are skilled at dealing with customer problems are placed on service calls.

Johnson Insurance is also benefiting from the reporting features offered by AltiGen. "They allow us to monitor calls on an individual basis, whether they are outgoing, incoming or long-distance calls - all of which are very important to monitor," relates Johnson. "Since employees know that we monitor individual phone usage, this helps reduce personal calls and ensures that our customers are getting the service they need."

CI Direct (Harlan, Iowa), an outsourcing communication center for insurance companies, has also improved its customer service thanks to the flexibility that was gained when the company began leveraging the VoIP substandard SIP (Session Initiation Protocol). After switching to the protocol in January 2003, it is better able to route calls to its licensed agents, who act as call center reps.

"SIP is a lot more flexible, and it saves us money because we don't have to worry about the cost of toll calls when we shuffle between the sites," says Matt Jones, director of technology services, CI Direct. "Because our insurance company clients wanted our assurance that it would be a reliable standard, we brought our agents up on the protocol at six or seven at a time. Then they became more comfortable with it."

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