A convergence of innovation: converged networks are providing insurers cost savings and the ability to maximize existing IT investments.

The insurance industry is experiencing notable success as it begins to come down from the top of the most recent underwriting cycle. The first half decade of this nascent century finds many insurers becoming integral components of today's financial services family, and insurance carriers have the potential to lead their siblings in the quest for converged financial services offerings.

Technology is clearly seen as an ally in this quest as insurers are buffeted by increasing regulatory burdens, the challenge of emerging markets, as well as the ongoing struggle to attract and retain the most profitable consumers as policyholders of protection products and customers of their financial services. This period also represents a time of transition for some carriers as they work to draw even with their peers in terms of products, technology and business capability.

For companies that are making investments in the transformation of their core systems, back-office applications or customer facing infrastructure, there is an IT concept that will support the coordination of these new strategic tools. In the course of upgrading IT and communications infrastructure, insurers can invest in additional functionality across their company by supporting the development and use of converged networks.

A converged network is a term that describes the use of a digital, Internet packet network to carry voice and video information in addition to the software application data and transactions for which it was designed. As an example of this concept, many companies are deploying "voice over IP" across their internal networks as a way to save money and to maximize the utilization of their existing IT investment. The public is being offered similar service via their existing broadband Internet connections (such as cable, DSL) from companies such as Vonage, Citron and SIPphone.

Now imagine applying this capability to an insurer. IBM is actively exploring how converged networks can enhance customer self-service, just-in-time and continuing education, or instant messaging to empower contact center professionals and claims adjusters, as well as agents and brokers in their daily activities. When we consider what innovations might arise from converged networks, the key thought process turns on the fact that previously disparate technologies can now function using the same device--the increasingly ubiquitous digital computer. Tasks for a given interaction can be performed in a coordinated and more synchronized manner, and most aspects can be enhanced to improve results and provide a source of innovation.

For example, one of the most challenging topics for insurance industry leaders is how to better work with consumers and existing policyholders. The goals of a contact center event such as a billing question might include the delivery of retention and cross-sell messages as well as servicing of the actual request among other activities. Today, the call would come into the contact center's telephone system and be handled by several applications with the result hopefully being the proper record being made available to the representative familiar with the type of inquiry in the proper screen.

This customer service transaction could be enhanced to increase customer satisfaction for the carrier that invested in converged networks. As the call came in, it would be in digital form and could be analyzed for emotional stress patterns as the call progressed. If the contact center agent was unfamiliar with the transaction request, he or she could consult online with a list of available expert resources that match the type of service being requested, and then talk to the expert within the same system. The help could be in the form of online text chat, a three-way call or even a video exchange if the customer wanted that. Likewise, a self-service event could be handled so that the customer was in control of a set of resources as is the contact center agent.

As wireless data speeds increase and become more widespread over the next several years, the same type of enhancements can be made available to mobile devices that support insurance field professionals. Along with a smoother and more coordinated approach to customer service, the all-digital mechanism means that the transactions can be analyzed "on-the-fly" so that more options or information are presented to assist the contact center agent, an adjuster or customer.

The potential for improved operational coordination can only increase as this technology becomes more embedded. Converged networks provide a source of innovation in A financial services that will make measurable differences to a large segment of stakeholders.

Contributor Jamie Bisker is a global insurance industry leader for IBM Institute for Business Value. He can be reached at [e-mail]