Last October, when Allstate Insurance Co. developed a plan to best assess damage and settle claims in the wake of the Southern California wildfires, the Northbrook, Ill.-based company reasoned it would be counterproductive to set up operations in brick-and-mortar offices located in the vicinity of the fire's epicenter.With the fire spreading and local residents scurrying to find shelter, Allstate established a unique operational presence to conduct business amid the blazing inferno, dispatching some of its local claims adjusters and a 270-person national catastrophe team to operate out of six mobile response units (MRU) scattered around the area.

The fact that mobile home-style MRUs could move from place to place was one thing. The fact that they were powered by wireless satellite technology was another. With the satellite lighting the way, Allstate's catastrophe team established remote but real-time access to its various claims and policy databases and used the corporate e-mail server to communicate back and forth with key operatives.

The result: Allstate received 2,780 auto and property claims from the last week in October through mid-November, enabling the company to begin processing far more claims than it would have deploying convention means. And while assessing damage to homes was vital, Allstate's front-lines presence enabled it to provide critical-and rapid-claims reimbursement to customers for temporary living expenses.

"Our mobile response units provide all the resources we'd have if operating from a brick-and-mortar facility," states Brian Clark, Allstate's national catastrophe team controller. "But the difference is: you can drop an MRU into a damage area, whereas with a brick-and-mortar facility you can't.

"In the past we might have had mobile units during disasters but it was only regarded as workspace," Clark continues. "In reality, an adjuster was able to perform the same tasks that customers could, such as calling 1-800-Allstate to perform claims inquiries. Now, an MRU is providing adjusters with access to key information to process claims."

As mobile computing solutions go, Allstate's ambitious MRU program probably exceeds what many other insurers are embarking upon these days-such as arming claims adjusters with wireless laptops or requisitioning Blackberry hand-held devices to brokers to sell policies.

Regardless of the scale, insurers have awakened to the potential of mobile solutions. In examining all the options across the mobile computing spectrum, business-to-business efforts-particularly for claims management-have become too powerful to ignore, say industry experts.

A survey conducted by global management and consulting firm Accenture indicates that policyholders consider quick claims settlement a higher priority than the settlement amount-in essence, many are willing to settle for less, as long as the claim is processed rapidly.

Whether it's a disaster of major proportions, such as the California wildfires, or a felled tree that damages a single home, insurers are latching on to solutions that can best enhance claims management, and mobile strategies speak to this need, say industry experts.

Undoubtedly, insurers have an unequivocal desire to settle claims quickly for policyholders, inasmuch as quick claims settlement enables them to recruit new customers as well as retain existing ones.

Insurers such as Mayfield Village, Ohio-based Progressive Insurance Co. have experienced a great deal of success in championing mobile solutions on the claims side of the business.

"Carriers such as Progressive have programs that can link an adjuster, agent, auto repair, car rental and other service providers together," says Brad Adrian, senior analyst, at Stamford, Conn.-based Gartner Inc. "They've become a leader in rapid claims response, with very high customer satisfaction. They've cut processing time in half and established strong partner relationships," he says.

In addition to enhancing customer service, insurers have another motivation for considering mobile computing: It can cut costs.

For instance, Fairfield, Ohio-based Ohio Casualty Group is deploying a mobile solution introduced by San Diego-based Qualcomm, which reduced its claims cycle time from 14 days to 7 days.

"Its advanced charges fell from $303 to $154 per unit, which generated $1 million in savings, and field appraiser productivity increased 12.5%," says Jeff Ross, director of enterprise market development for Qualcomm.

Not that there have not been negative implications as mobile programs are implemented. Oddly, mobile efficiency might be too good for some insurers. As claims-based mobile programs have been introduced, it's led to a "tug of war" between claims units and accounting departments, says Patrick Garner, senior sales executive for Natick, Mass.-based Prelude, a provider of technology solutions to the insurance industry.

"Accounting departments regard the issuance of claims reimbursement checks in the field as an operational nightmare because these checks are often cashed before they're posted on an internal accounting system," says Garner. "It has led to some friction between the two departments."

To rectify the problem, insurers must find a way to capture claims payouts in real-time, where they are logged into an accounting system or claims administration system. To resolve the accounting-claims dilemma, Prelude recently introduced PointPay, a solution that links home-office computers with laptops in the field so adjusters can print checks at the point of adjustment.

The technology integrates with whatever systems are already in place and accelerates claim adjudication, significantly reducing the associated payment costs, increasing payment security and enhancing customer service, explains Garner.

"With PointPay, adjusters will conduct a damage report and then log in to the Web-based system to enter pertinent data, such as a policy and claims number, name of claims payee and dollar amount," says Garner. "Checks are issued on the spot using a bubble jet printer. The adjuster can upload the data to whatever database the insurer deems necessary for proper processing."

Dishing it out

Implementing solutions such as PointPay to quickly issue claims reimbursement checks to policyholders holds a great deal of value in appeasing customers.

The relevance of quick claims settlement holds true with even the most simplistic and mundane of claims. So imagine customer expectations when the claim involves a catastrophe.

This priority was not lost on Allstate when it descended on Southern California in late October. Taking six to eight months to develop the wireless satellite technology in conjunction with Houston-based InfoStat, Allstate actually launched the MRU program during Hurricane Isabel in August. But the equipment was not fully operational until the October wildfires, states Clark.

The launch of the program was regarded as a significant upgrade from a previous satellite technology deployment. As part of that program, Allstate used satellite telephones that proved to be effective-but only up to a point. "We could connect to our company mainframes but we did not have access to the Internet or the Microsoft Outlook e-mail server," Clark notes.

"The dish enables us to connect to these vital components and settle claims quicker. Once we position an MRU so it provides a clear shot to the sky, the satellite searches for a coordinate, locks in that coordinate, and we're ready to go. We never need to get on top of the vehicle to adjust the dish, because it's all mechanized. Our MRUs were in operation an average of 12 hours a day, and we never experienced a satellite signal failure," he says.

During the California wildfires, Allstate's 270-person catastrophe team processed claims from the MRUs, and at the outset, served about 60 to 70 policyholders per day who came to an MRU to file a claim. Some of them had been forced from their homes and had no way of engaging the company.

"We got the word out through the local media, and also posted details on our Web site that these mobile response units were available for any policyholder who had the need," says Bill Mellander, a spokesman for Allstate Insurance who helped coordinate the effort in San Diego.

"We had customers visiting an MRU and it was just like they were sitting in an agent's office. They didn't have to furnish us with a policy number-just a form of ID."

For the most part, Allstate's MRUs established a position and then remained there for the duration, says Clark. Two of Allstate's mobile units are configured with seven and eight desktop positions, respectively, for adjusters to settle claims. Another is equipped with five workstations, explains Clark. Adjusters use standard-size desktop PCs that are enabled by satellite transmission linked to a phone line.

"We have an equipment cabinet inside that serves as the nerve center of an MRU," says Clark. "There are three core pieces of equipment that enable this to work: A Tracstar controlling device that establishes the coordinates for the satellite itself; a Skystar modem that enables data to be sent and received; and a Nortel junction box with Category 5 phone cable that feeds the satellite signal to the respective workstations," he says.

On the radar screen

The MRU initiative had been on Allstate's radar screen for more than five years, but the prohibitive costs kept the insurer from moving forward, says Clark. "Advances in technology helped bring the costs down, and once this occurred, it made it possible for us to rethink the MRU investment," he says.

Allstate's MRU program is among a growing number launched on the business side-rather than consumer side-of the equation.

By and large, consumers have shown little interest in using mobile devices to interact with insurers, says Gartner's Adrian. The use of a PDA or wireless phone to obtain an insurance quote or check on the status of a claim has not proved to be a priority to most of them.

Progressive discovered the pros and cons of consumer-driven mobile programs when it executed the first live customer transaction using WAP technology in early 2001. Using a Web-enabled Palm VII PDA, customers could download an application from the carrier's site at to pay premiums wirelessly.

While Progressive was busy engaging its customers with mobile options, it also had ambitious plans to enhance the efforts of its internal affiliates.

Specifically, Progressive in 2001 armed about 1,500 adjusters with laptops. The adjusters logged in to the network to extract policy information from a claims database.

Using laptops that had hard-drive capacity ranging from 6 to 10 gigabytes, adjusters were able to launch damage-estimation software to determine the extent of vehicle damage. Once a claims report was complete, they transmitted it back to a claims office, received approval and issued a check.

However, it's uncertain exactly how much these programs at Progressive have evolved over the past two years, or whether they even still exist. Shannon Radigan, a spokesperson for Progressive, says Progressive continues to leverage mobile computing solutions, but she would not provide specific details about the programs.

Taking the plunge

Despite all the challenges of mobile computing, the question seems to be not if most insurers will take the plunge, but when they will take it.

"We've been after the insurance vertical market for some time," says Qualcomm's Ross. "Over the last six months to a year, we've seen some full-scale deployments with meaningful ROI, particularly on the P&C side and auto coverage where adjusters are reaping big productivity gains with mobile devices."

"I'm getting a lot of questions from our clients, and they are laying out formal plans for adopting new and emerging mobile computing solutions," says Gartner's Adrian. "It's more than just a passing interest from what I see."

Growing Pains Remain For Mobile Computing

When carriers conduct capital expense analyses for mobile technology investments, many have found such investments to be inconclusive or insufficient from an ROI standpoint. As a result, insurers often table mobile expenditures for the future.

One drawback to mobile computing solutions is that some devices are not effective substitutes for traditional technology. For instance, in using a Web-enabled cell phone to view a quote, consumers found that there was something lost in the translation. It proved easier to use a PC to accomplish that task.

That's why a wireless laptop serves as an excellent bridge connecting tradition with mobile efficiency. "Laptop deployment is more cost-effective because most insurers already have laptops expensed," says Jeff Ross, director of enterprise market development for Qualcomm.

"I still see a device like a PDA (personal digital assistant) in a test-and-measure stage, while laptops are the workhorse alternative for insurers," he says.

Insurers consider other factors as dubious in the mobile computing arena. The platform on which many mobile programs were developed-wireless application protocol (WAP)-has several flaws, industry experts concur.

"One person using a WAP-enabled device might not be able to communicate with a person using another WAP device," says Brad Adrian, senior analyst, at Stamford, Conn.-based Gartner Inc.

"The display of data from one device to another may not be standardized. The positive news is that HTML is proving to be an effective standard to support mobile communications," he says. "With HTML data, users don't have to worry about the data, just the presentation. With WAP, there are discrepancies with the data exchange from user to user."

Many observers discovered that the low bandwidth of WAP led to its phase down. "WAP had lots of promise in 2000, but it's a browser-based protocol that didn't have a lot of range," says Qualcomm's Ross. "It had no synching capabilities. HTML code-rendering is taking over as the protocol of choice because you write it once and it supports all mobile devices across the spectrum."

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