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Weighing Wireless

Significant barriers counsel against major wireless initiatives, and customers still show only limited interest. But wireless applications can give field reps a competitive edge.


Dennis S. Callahan

Senior Vice President and CIO, Guardian Life Insurance Co., New York.

Brad Adrian

Research Analyst GartnerG2, Stamford, CT.

Ed Mann

Vice President, Information Systems, Prudential Financial, Newark, NJ.

Jerry Goedicke

Chief Executive Officer Mobitor, San Ramon, CA.

Robert A. Lotter

Chief Executive Officer eAgency Systems, Newport Beach, CA.


Q: What kinds of wireless initiatives will insurance companies implement with the greatest success in the next year or two?

A: Dennis Callahan, Guardian Life Insurance: We want to empower our field force with access to Guardian data and client information wherever they are doing business through whatever device they choose. Wireless technologies that integrate with both front- and back-end systems are important to achieving these types of instant transactions. A wireless platform is a key component of our enterprise architecture initiative, allowing us to extend the reach of our computing systems beyond existing infrastructure.

A: Brad Adrian, GartnerG2: During the next 12 to 24 months, insurance companies wishing to "get into the wireless game" will have a couple of options. They will either try using wireless technologies to facilitate internal processes such as claims handling in order to gain favorable ROI or they will try to provide customer-facing applications in order to gain first-mover status.

A: Ed Mann, Prudential Financial: It's really difficult to predict the future of wireless because right now there are so many security issues to be resolved. I can see big potential for wireless LANs that can be used for business continuity and in temporary offices, but we're not seeing much demand yet.

A: Jerry Goedicke, Mobitor: Laptops have not been as widely adopted by agents in remote situations as hoped. However, a new mobile computer, Compaq's PocketPC, is a breakthrough form factor. It can be used in virtually any remote selling environment, it has the computing power to run real applications, and it is much easier to use. Thus, I see large opportunities in mobile applications for worksite marketing, mutual fund wholesalers, financial product distributors, farm, flood and crop insurers, agency marketing teams, career agents, financial planners and advisors, and wealth managers.

A: Robert A. Lotter, eAgency Systems: Wireless initiatives should be geared toward agents since they are the ones in the field generating revenue, are the point of customer contact, and have the most to gain through wireless applications. Wireless SFA/CRM tools will aid agents the most, since they have to manage large amounts of customer and policy data. Additionally, being able to access forms and documents wirelessly will greatly reduce submission errors (currently around 25 percent in the industry).

Q: What are the current obstacles to broader use of wireless applications in insurance?

A: Callahan, Guardian: Wireless technologies, while widespread, have not fully matured. There remain issues of inadequate privacy and security, few service-level standards and limited geographic service range. At the Guardian, we feel that it is important for our enterprise architecture to only integrate "device agnostic" wireless services and products that will endure beyond 12 months and have the capacity to meet both voice and data requirements. Wireless applications will become ultimately more appealing as they meet these criteria, and as the overlap between portal packages and traditional wireless application service vendors continues to increase.

A: Adrian, GartnerG2: The two greatest impediments right now to widespread adoption by the insurance industry are a lackluster understanding of exactly what wireless data is, and a dearth of back office infrastructure capable of providing real bite to any wireless initiative. It will be 2003 before a sufficient number of North Americans feels comfortable transacting wirelessly using handsets and PDAs.

A: Mann, Prudential: One of the biggest obstacles in the wireless environment is security. Other issues are cost, coverage, development, and vendor viability. Vendors are out there touting their products as the best and promoting wireless as the next Internet. They promise you the moon and then you find out that they only had enough capitalization to operate for six months. So you don't know if the company you're doing business with will be around to support you.

Q: Are customers-both consumers and business partners, such as agents-ready to adopt wireless services?

A: Callahan, Guardian: Agents are certainly ready for wireless technology, as long as it's an uncomplicated, consistent, and secured product that really helps their business.

A: Mann, Prudential: No one seems to be banging down the door looking for wireless solutions. The business units are not asking for it and consumers aren't threatening to do business elsewhere if they can't get real-time information on their PDAs. And, while wireless technology can help increase productivity, some members of our field staff have fears this technology smacks of Big Brother peering into their computers at everything they do. Also, wireless is supposed to be "on all the time" but in reality isn't. Sales professionals feel silly when they walk into customers' homes ready to do business on their laptops but the service keeps dropping off.

A: Goedicke, Mobitor: So far, customer-facing Web initiatives in insurance have had little impact on real transactions. Thus, extending the Web with customer-facing wireless applications is even less likely to produce revenue. And, who is going to pay for the connect fees? Mobility is critical to agents, but from a wireless perspective, agents are not going to put up with spotty connections and performance.

A: Lotter, eAgency: B2B and B2C markets are hungry for value-added wireless applications and services. The problem has been to deliver wireless "always on, always connected" access to these applications, with significant coverage, security, at a reasonable cost. Integrated cell phone/PDA GPRS devices should help increase adoption since the additional cost for data services is minimal and most mobile employees are already bearing this cost.

Q: How should insurers make a business case for investment in wireless?

A: Callahan, Guardian: Guardian IT is first and foremost a partner to Guardian's business areas, and together we expect a hard-dollar impact from any investment—wireless is no exception. As with any technology investment at Guardian, it is subject to a rigorous ROI process. The projected costs are weighed against benefits, including increased revenue and income, expense reduction, cost avoidance, increased market share and additional revenue opportunities, with payback achieved in three years or less.

A: Adrian, GartnerG2: In the vast majority of cases, the value of wireless applications will be demonstrated solely in terms of cost savings and gained efficiencies. It is not a cliche to say that ROI calculation in every case is unique; however, common key savings components include more efficient data delivery to remote users, more effective use of sales force and claims adjusters' time, reduced redundant data entry, better use of down-time, and enhanced data entry error detection.

A: Mann, Prudential: We have an office in Arizona that uses wireless LANs for mobility within the office and to support ad hoc short-term work groups, but for the most part our businesses are not telling us that they need it. It would be great if there were a way to equate wireless with X numbers of clients on a monthly basis. But that doesn't exist, and it's difficult to prove ROI for wireless. In the final analysis, when it comes to ROI, there are too many projects chasing too few dollars.

A: Lotter, eAgency: Wireless applications will both increase revenue and reduce costs. Even wireless e-mail solutions have proven returns greater than 1,500 percent. Coupled with SFA and CRM tools, I think there is tremendous potential for payback on these kinds of initiatives.

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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