Insurers can't understand the benefits of wireless technologies unless they experiment with it, as Progressive Insurance has done for the past year. At the same time, the lack of industry standards, coupled with current limits on how much data can be transmitted and received by mobile devices, limits the types of services that wireless devices can support."This is a technology that consumers are dying to use, except for claims and servicing," says Jamie Bisker, a senior insurance analyst with TowerGroup, Needham, Mass., and author of the recent report "Wireless Realities In Insurance."

"It's important not to let expectations for the technology to be driven by hype. Some people believe that because wireless has been successful for the securities industry, then it should be successful with insurance. But there aren't a lot of people out there buying insurance on wireless devices," he adds.

Progressive, the first carrier to use Wireless Application Protocol technology, which enables consumers with Web-enabled cell phones and personal digital assistants to access the company's Web site, recently added new features to its "wireless Web" program. In addition to receiving auto quotes, purchasing auto policies and locating independent agents, policyholders can now receive vehicle crash-test ratings and use calculators to determine costs of leasing a car as opposed to buying one.

"A lot of what we're offering comes down to giving consumers the information they may need when they're buying a car," says Toby Alfred, Internet site manager for Mayfield Village, Ohio-based Progressive. "In a streamlined world, consumers could have one device that combines the attributes of a cell phone, a Palm Pilot and a calculator."

Technical limitations

However, until a consensus is reached on eliminating competing wireless data communication standards, and mobile devices incorporate larger screens and keypads, wireless technology within the insurance industry will not become an effective tool that extends carriers' e-business strategies.

"While waiting for the potential change that true wireless broadband might bring to their markets, insurers need to revisit their business strategies and plans to determine where high-speed data communications would provide additional value," Bisker says.

Carriers may find that the best fit for wireless technology is claims handling, he adds. "Adjusters and agents can use the technology to improve their workflow and leverage the Web and wireless Web," Bisker explains. "An adjuster, for example, can enter claim information at the point of service and upload it to the corporate claims system whenever it's convenient."

Until improvements are made in the technology, the cost to support wireless may also inhibit some carriers from testing it. Progessive's Alfred declines to say how much the carrier has spent on wireless, but says that the company limited its expenses by developing an in-house solution. "There is a lot of maintenance because of the ever-changing interfaces, and it's been a headache, to put it mildly," she says.

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