After flirting with test pilots, phased rollouts and other levels of adoption, the jury is still out on whether mobile computing will become as ubiquitous to insurers as pen and paper.With claims management activities providing the most compelling impetus for adoption, a select group of insurers have sworn by the capabilities of mobile computing technologies to improve workflow and customer service. But other insurers continue to wait for greater application functionality, dependability and scalability before they commit to adopting the technology.
And, in a surprising twist, the firms leading the adoption of mobile technologies are not the ones you would expect.
Smaller, regional insurers are leading the way, reaping return on investment with their initial implementations and now moving into next-generation programs.
Conversely, a handful of large insurers with the capital muscle to afford large-scale mobile initiatives are just kicking the tires.
At Safeco Corp., for example, the adoption of a mobile computing strategy to support the property/casualty carrier's auto claims processing efforts is regarded as a promising, yet unfulfilled opportunity.
Based on the implementation of an electronic claims workstation built on a client-server architecture, Safeco's internal claims staff of about 2,300 people relies on the technology to distribute assignments to Safeco's 650 field specialists who process automobile claims.
"Our field representatives use DSL (digital service line) to connect from a home office to access new claims assignments, and to upload and download claims estimates taken from the field," says Paul Barry, vice president of claims operations for the Seattle-based insurance company.
Safeco has been able to streamline dispatching and reduce claims processing cycle time-a capability not lost on auto policyholders. But Safeco executives like Barry are eager to tap into far greater mobile computing functionality, such as using the technology to transmit claims in real-time and perhaps issue a reimbursement check on the spot.
Unfortunately, that day has not yet dawned.
"Our field reps, who mainly use cell phones and laptops, are not able to conduct real-time processing at a claims site because of a lack of bandwidth. There are a host of spotty coverage issues we've faced in early testing," says Barry.
"We've found that claims reps must have wireless access available at least 85% of the time while they're in the field to make the effort worthwhile for real-time processing. All in all, it's a proposition that's not yet ready for prime time," he says.
Approximately 2,000 miles east of Safeco's headquarters, Indiana Farm Bureau Insurance Co. has a different impression of mobile computing.
The Indianapolis-based regional auto and homeowners insurance provider has found that in the three years since investing in a mobile program to support claims processing, the effort is going a long way toward providing greater efficiencies for its network of 42 material damage appraisers.
Indiana Farm Bureau has been able to reduce cycle time for auto claims resolution, and contain failure rates on claims, says Joe Marcum, property/casualty director, field services for the carrier.
Indiana Farm Bureau uses technology built on two separate but integrated components: a lightweight mobile data wireless hand-held device that integrates with a rugged, wireless Toughbook laptop developed by Panasonic Computer Solutions Co., Plano, Texas. The software was developed by San Ramon, Calif.-based ADP Claims Services Group.
The hand-held devices have a pen device attached. The ADP claims software is graphical, which enables appraisers to easily use the device. They can touch areas of the screen to identify damage and make notations. The hand-held device connects via a wireless fidelity (WiFi) protocol to laptops, which remain in the appraiser's vehicle during inspections. WiFi, which provides high-speed wireless connectivity to the Internet or to office networks over a short range, typically 50-150 feet, is normally used with laptops and personal digital assistants (PDAs).
With its return on investment in place, Indiana Farm Bureau is looking to reap additional results thanks to ongoing program upgrades introduced by Panasonic.
"We've had a host of success stories," Marcum says. "When this program was first launched, a wireless card was inserted into laptops to transfer data after appraisers had logged it into the hand-held device. But late last year, Panasonic embedded wireless technology into the laptops, making the wireless card unnecessary. The screen configuration on the hand-held and laptop was also upgraded-it's much cleaner now. Overall, we're very pleased with the way the technology is helping support our auto claims efforts."
Marcum says Indiana Farm Bureau ultimately will operate a "true" wireless network that enables the claim site to become a virtual office. The company is getting closer to that goal.
"Our appraisers are already able to transmit data in the field wirelessly, but it's inconsistent," says Marcum. "Using the wireless laptop, we have found that they might drop coverage, but within a mile or two, they might phase back in, which means they're able to pick up where they left off. The key is: We're not requiring a lot of data to go back and forth."
Industry experts agree that with mobile computing, claims management has and will continue to receive the lion's share of the insurers' mobile investment dollars.
One reason why: It's hard to build an ROI case for other types of activities, notes Chad Hersh, research analyst with Celent Communications Inc., a Boston-based financial services research and advisory firm.
In a report released in April 2004, "Wireless Technologies in Property/Casualty," Hersh projected that only about 15% of P/C carriers would have a serious wireless project on the table by the end of 2005 to support claims. "In 2006, adoption will really pick up," he says. "And by 2007, wireless initiatives will become nearly ubiquitous. The thing is, carriers like to wait before jumping into the fray. It's a very risk-adverse industry."
Echoing Hersh's adoption projections, Kimberly Harris, vice president and director of insurance research, for Stamford, Conn.-based Gartner Inc., says in mid-2004, companies were asking more questions about new pilots and performing RFPs (request for proposal). "When insurers go out to acquire new systems, many are requiring that these systems be able to support and deliver a wide range of wireless devices to their agents and claims handlers," Harris says.
Insurers, she notes, are "making it a stipulation that their vendor partners have wireless capabilities embedded into a core claims application, so when they make the plunge, they have the built-in capabilities in place. But it's not that simple: Some vendors can provide this, while others can't."
Beyond claims management, mobile programs supporting new business and CRM initiatives have generated a niche following, industry observers say-but still widely trail those ventures introduced to support claims (see story on page 30). The reason is simple: The technology has provided tangible results for the claims management business case-retain and grow business, and suppress loss costs.
"We aim for reduced loss costs, to get a customer's car back quicker and reduce rental car expenses," explains Safeco's Barry.
"Our customer surveys have told us that the most important thing to customers is getting their car back from repairs as quickly as possible. So it's our goal to reduce cycle time by enhancing productivity of the field reps," he says.
Electronic scheduling software can also reduce claims cycle time by enabling adjusters to quickly produce a list of preferred collision repair shops shortly after first notice of loss. "It's a powerful advantage for insurers who want to make an impression to customers about their claims efforts," says Gartner's Harris. "It's a way to foster flexible scheduling and, in the end, a customer might see their auto repaired in three days rather than a week."
Insurers admit they have their work cut out for them in trying to determine the specific characteristics of a mobile computing strategy. One question often asked is: How should we start to proceed with a mobile initiative?
Celent's Hersh says insurers should make certain that key personnel understand the limitations of the technologies. This can also lead to swifter upgrades to newer technologies, he notes. "Pilot projects can help prevent glitches from becoming widespread problems that hamper short- and long-term acceptance and adoption of wireless technologies," says Hersh.
Carriers should also move forward with field trials, which help garner feedback from the target audience, Hersh says. "Field trials help refine wireless devices and applications, and they're also critical to develop training for a successful implementation. Training is paramount to ensure adoption."
Another uncertainty centers around the variety of mobile devices on the market, and how carriers intend to use them for claims processing. Safeco's Barry says that after examining the wide range of wireless devices, the company concluded that each has advantages and drawbacks.
"We did a pilot with tablet PCs and found that it was neat technology, but from a cost standpoint, tablets cost as much as laptops. And we found that PDAs (Palm Pilots, Pocket PCs, etc.) still require that you buy laptops to fill in the (functionality) gaps of a PDA.
"A laptop can do it all-the problem is: It's cumbersome," Barry says.
"A laptop is not really the best workflow tool because it's awkward. But at the end of the day, it has what you need most: A monitor and keyboard. A PDA doesn't. What we are really waiting for is the emergence of that elusive all-in-one device."
Selecting the most compatible device is only part of the process. The uncertainty of various wireless protocols, such as WiFi, WIMAX and Bluetooth only compounds the matter.
Another emerging wireless protocol is 3G architecture, regarded by experts as the next generation of wireless data access via cellular networks.
3G enables speeds similar to DSL connections, and would be able to support an insurer that relied on cell phones and laptops. The readiness of 3G holds the key to users who want to migrate to a true wireless computing environment.
Safeco is one such insurer. "There is a lot of potential with 3G, but unfortunately it's not ready for prime time-but we are getting close," Barry says.
Safeco tested wireless cards to ensure field coverage. But therein lies the rub: Wireless cards linked to laptops have a tendency to be tedious in transmitting data back to corporate mainframes and servers, says Barry.
"The wireless cards we tested were painfully slow," he says. "We did a structured pilot to evaluate performance. We wanted to know-if we invested in wireless cards whether or not they would provide a productivity lift. Would our field people be able to upload and download at such a rate that it would provide that lift? The answer was no, it would not. It did not give us the impetus to rush out and buy wireless cards."
For now, Safeco claims appraisers return to an office and then fire up their laptops to access a company intranet to electronically submit claim estimates to a branch office.
"If we were truly wireless, we would not be burdened with these trips back to the home office," says Barry. "If we were truly wireless, people in the field could send the estimates remotely.
"It will be at least 12 to 18 months before we reach a point where the technology we are exploring will be at the maturity level to provide us with the cost-benefit we're seeking."
Life Insurers Sold On Mobile Sales Support
While property/casualty insurers are using mobile computing devices to support claims management, life insurers are looking for opportunities to enhance the capabilities of agents and brokers in marketing wealth management products.
For instance, wireless devices that have built-in customer relationship management capabilities add a significant level of traction to agents and brokers looking to identify new sales opportunities.
"If an agent is sitting with a customer, a wireless device that supports real-time data transmission helps that agent to capitalize on sales opportunities on the spot: In essence, grab the business from the customer before they have a chance to shop around," explains Kimberly Harris, vice president and director of insurance research, for Stamford, Conn.-based Gartner, Inc. "Pulling data from a back-end system that's linked to a laptop provides the agent with information to cross-sell and upsell."
To carry mobile sales a step further, an agency principal can track the performance of agents using a mobile-driven application.
Seymour & Associates, a Maumee, Ohio-based insurance agency that markets life, annuities and retirement products from Springfield, Mass.-based MassMutual, is currently using a mobile performance management tool called ManagePro for its 55 career agents and another 55 independent brokers in its network.
The software enables agency managers using a laptop or PDA to determine whether agents are meeting their sales projections. Agency principals can track agents' completion of tasks and goals, development of marketing programs, and appointments and activity prioritization, says Angie Barney, the business manager for Seymour.
"We're able to determine an agent's production and whether that agent is lagging behind in fulfilling a goal based on the time they have to accomplish it," Barney says.
Using a laptop most of the time, Barney is considered the "power user" of ManagePro at Seymour & Associates. Rather than being tethered to a PC in her office, Barney uses ManagePro while in transit and at home.
While the ManagePro version that Seymour is using is not a Web-based product, it does have the ability to link to the company's e-mail server to access Microsoft Outlook. "From the database, I can pull up and review what one of our agents is doing from anywhere, and on the spot send an e-mail to the agent to revise or modify a goal," Barney says.
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