New York — Insurance technologists have good reason to be wary of the next big thing. For every promising new technology that delivered as promised, the memories of the numerous ones that didn't still linger.
So what do carriers make of Web 2.0, which is not a single technology but a rubric for several emerging ones? A new research report from New York-based Novarica contends that because of its diverse nature, insurers need a general awareness of Web 2.0, not a grand strategy.
"Insurers should avoid trying to catch a consumer hype wave driven by media and venture capital dollars, but should not blind themselves to real value that Web 2.0 is bringing to the industry today and will bring tomorrow," reads the report, authored by Matt Josefowicz, director, insurance and Steven Kaye reseacher, insurance.
Indeed, the report carefully parses the separate technologies comprising Web 2.0. It finds blogs and wikis, the technologies most readily associated with Web 2.0, being mostly useful internally and only having a modest impact on customer-facing operations. The report recommends that insurers first focus internally when it comes to blogs and wikis, and only use them externally when they have a specific customer communication strategy to do so. Moreover, the authors question the consumer demand for, and business logic of, interactive Web forums hosted by insurance companies.
The report also finds AJAX, a Web development technique used to create rich applications, gaining widespread traction, with 39% of the insurers Novarica surveyed stating they are using AJAX and deriving value from it. Yet, in a similar vein to blogs and wikis, the carrier showed the greatest enthusiasm for using AJAX to improve key internal systems such as underwriting and claims, even more so than for customer and agent-facing systems.
Josefowicz says the growing adoption of AJAX is indicative of larger move away from desktop applications toward Web-based ones. “The need for this technology is acute with so many insurers deploying browser-based applications—both internally and externally—that anything that promises to make those applications more powerful and perform better is going to attract attention,” Josefowicz tells Insurance Networking News.
The survey finds similar optimism for another, more nascent Web 2.0 technology, cloud computing, although the use of it is still extremely rare today. However, it states that insurers may see a use for the technology, which allows them to tap into powerful computer systems on a pay-as-you go basis. Cloud computing would make sense in areas such as actuarial calculations, where insurers need serious computing power, but only on sporadic occasions.
“Traditional methods of buying computing power are expensive,” Josefowicz says. “The thing about actuarial calculations is that you don’t use them all the time—it’s not a daily occurrence.”
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