Opening the Floodgates

As broadband technology becomes increasingly affordable and reliable, insurers have to make some hard decisions about who to connect, how to connect them, and for what applications.

Cable/DSL Dilemma

DSL originally was picked as the best business-class vehicle for broadband at the time. But over the past year response for company-sponsored DSL access into PruLink has been disappointing, since lower-cost reliable cable modem options have become available, according to Mann. The Exario DSL connection billed at about $150 per month, compared to around $30 for cable modem service. ""We went for a high-end offering,"" Mann reports.

However, falling budgets led field personnel to seek their own connections. Just over 1,000 employees are connected through DSL, including agency offices, help center employees and call center representatives. Among the latter group, about 10 employees are in pilot with voice over the network. ""It's the first time we have people talking directly to customers with broadband technology, and that's a big thing for us,"" says Mann.

Having built PruLink to work over any kind of Internet protocol (IP) connection, rejection of DSL by some field representatives doesn't pose a problem. But with the emergence of cable modems as a more pervasive option, Prudential has had to reevaluate its DSL commitment. ""We're wrestling with that right now,"" Mann says. ""Our contract with Exario is out, but we're assuming we'll continue with them because it's not an all-or-nothing situation.""

Bottom line: By offering a variety of solutions, rather than zeroing in on the most economical, Prudential is more likely to be able to sponsor connections for more of its employees, according to Mann. ""There are a lot of places where you can't get DSL, so you want to have an option,"" he says. ""We're starting to talk to some of the cable providers that are just starting to provide business-class service. Also, we're going to be testing WorldCom (Clinton, MS) satellite services.""

Although it also is based in northern New Jersey, Horizon Blue Cross Blue Shield ($2.2 billion premium revenue) opted for cable modems over DSL. ""We started with cable because of ease of installation and availability,"" says Chuck Emery, senior vice president and CIO. ""DSL was very tedious to install and requires a lot more coordination with the DSL provider. We've also had several false starts, where you're told you're in range and once the provider gets on site they tell you you're not,"" Emery says.

The Newark, NJ-based health insurer approached broadband more out of a sense of necessity than experimentation. ""A tight labor market and facility space concerns were our initial drivers,"" Emery says. ""Our headquarters was bulging at the walls with people and we needed to relieve that without building lots of new office facilities.""

The employees Horizon wants to connect via broadband include customer service representatives and medical management personnel, who do utilization and review in a clinical setting. These jobs ""are very information intense, so they need broadband connections in order to handle the volumes of data,"" Emery says. ""Because all documents are scanned, there's a lot of imaging traffic that goes back and forth.""

Although Emery says he has seen an increase in the availability of cable modem service in Northern New Jersey, spotty coverage in the broader New York-metro area remains an obstacle to more extensive deployment. Offering a personal example of the situation, Emery points out that while he lives within eight miles of AT&T's Morris Township, NJ, offices, neither DSL nor cable modem is available in his specific neighborhood.

Despite complicating factors such as hit-and-miss availability, strategic and business challenges are driving many organizations to take the plunge. Technology staffers were actually used as broadband guinea pigs at MetLife (New York, $302.5 billion in assets), according to CTO Steve Sheinheit. ""Normally we give new technology to ourselves last,"" he says. ""But this time we had a lot of people who had to have access on a 24x7 basis. For what they had to do, traditional dial-up was too slow. With broadband technology, it's as if they're in the office.""

Through a broadband pilot launched in 2001, MetLife connected about 500 people who could connect via DSL or cable modem. In addition to the tech-support personnel, the firm broadband-enabled employees, thus creating flexible work arrangements for those who had special needs, such as dealing with a newborn, Sheinheit says. ""This gave us the flexibility to provide a robust and capable work environment."" It was a huge improvement over a dial-up connection, which ""isn't quite like being in the office.""

Enabling that office to be elsewhere also addresses business continuity concerns that were not easy to anticipate before September 11, according to Sheinheit. ""We had lots of people working at home for a time after 9/11, because of transportation problems, etc.,"" he says. Anticipating other such emergencies, the company has implemented the capacity for supporting up to 20,000 employees via broadband.

Paradigm Shift

However likely or not such dangers appear, broadband eventually will drive a radical reshaping of the workforce—at least, that's the opinion of Cecilia Claudio, CIO, Farmers Insurance (Los Angeles, $12 billion total assets). ""Right now a very clear delineation exists between the office people and the field people, but I think we will now have the opportunity to reengineer the way we work,"" she says. ""We will look to reduce facilities, and have more people working from home and other settings.""

Finding a way to a new paradigm will be a struggle, Claudio says. ""But it won't be because the technology is not there to allow us to do it. It will be because of our cultural limitations, or the extent of our desire to aggressively change the way we shape work functions today—or because we simply can't think of doing things differently from the way we always have,"" she says.

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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