Instant connection: Instant messaging is taking the business world by storm, and some insurers already are finding it improves productivity and reduces costs. (Technology: Instant Messaging).

"Call me" and "Are you at your desk? Phone number, please" are just some of the many messages the nearly 55 loss-control representatives, risk consultants and premium auditors in Chubb Corp.'s Southern zone exchange daily via instant messaging. The technology, which once was used predominantly by teenagers, now is making its way into the corporate setting, and some insurers already are finding value in the tool that instantly connects users in real-time.

Off to Work

The IM revolution increasingly is pervading today's businesses.

Like the Internet, IM began as a user-driven phenomenon. The communication tool began in the 1980s with bulletin board and chat systems. In 1996, Mirabilis Ltd., an Israeli start-up company, introduced the first free IM service--ICQ.

Today, the technology has moved from household use into the workplace, and in business, N now is changing from unauthorized business use into proper business systems. "For many years, the public IM services were used by business people to chat with colleagues and business partners, but there's been a recent realization by IT departments that business-class systems are needed because they can streamline processes, speed up workflow and enable people to touch base much faster than with e-mail," said Michael Sampson, editor and consulting analyst for Ferris Research, a market and technology research company focused on messaging and collaboration technology industries. Ferris Research anticipates that users of business-class IM systems in the business market will grow to about 186 million by July 2007 from 10 million in July 2002.

Some analysts even predict N will become the pervasive communication medium. Research firm Gartner believes that by 2005, IM will overtake e-mail as the primary communication tool at work. In preparation for this shift, Gartner is encouraging companies' chief information officers to make IM one of their priorities this year. Why? Gartner believes IM is an achievable, real-time enterprise project with immediate business benefits.

Insurers' Leap

While IM is still in its infancy across the insurance field, several insurers already are finding value in its use.

"It really just makes the world a lot smaller," said Rich Agar, CIO for GE Employers Reinsurance Group, based in Overland Park, Kan. The company began a companywide initiative five years ago to improve collaboration, and IM capability is one of the tools used to achieve this end. ERC is using IM internally, with a small portion externally. For example, ERG uses IM to communicate with information-technology support services in India.

Agar said that employees have been overwhelmingly receptive to its use, and he believes IM is a large contributor to enhancing productivity in terms of collaboration.

Chubb's Southern zone loss-control department also is finding much value from IM. As a communication tool used to link loss-control staff located across the Southern U.S. region, TM is becoming a daily necessity. "IM, in general, is the virtual equivalent to walking over to someone's cubicle--something we can't do because most of our staff are out in the field or located in different regions," said Tim Farr, vice president of Southern zone loss control. Chubb uses the TM component of Lotus' SameTime product, a popular choice among insurers, for its TM functionality. SameTime now holds more than 30% of the corporate TM market overall, according to Osterman Research.

For Minnesota-based St. Paul Cos., IM is energizing work communities and bringing a human element to a virtual environment, said Erick Thompson, assistant vice president, knowledge and learning technologies. "We're using IM and Web conferencing to simulate a real-world environment, but do it in a virtual space where people can quickly and easily go to meetings and connect with one another to get work done;' Thompson said.

St. Paul currently uses nearly 90 Knowledge Exchange virtual communities to provide members with a variety of online tools to improve productivity, streamline processes and reduce costs. Two of the online components include IM to help members receive answers to questions in real-time. The "People Finder" tool allows members to locate experts within the company on a given subject, and the "Live Online" feature is a virtual meeting room inside the community. In addition to internal department meetings, the tool also enables students and trainers to share software programs and screens while working at their computers across geographical boundaries.

While most insurers now use IM internally as a way to connect employees or members of development teams, Amica Mutual Insurance Co., based in Lincoln, R.I., is taking a different approach. The company recently created a "live help" button on its Web site to link customers with agents in real-time. At the click of a button, Web users completing an online application can receive immediate answers from agents nearly around the clock.

"We undertook the project to enhance the ability of people to submit claims reports and applications online, and to remain competitive with respect to the Internet," said Lee Valentini, director of service center operations for Amica. The real-time live help feature is designed to aid users if they hit a hurdle and need a quick, simple answer, rather than disconnecting or logging off the Internet or having to pick up the phone, he said. As a result, an increasing number of online users now are completing the process more easily and efficiently.

While some insurers are finding value in IM usage, others remain a bit more leery. Kevin Dickmann, information systems manager for Tolman & Wiker Insurance, based in Ventura, Calif., said IM is another interruption to normal work flow. "It breaks a person's concentration to have something pop up while they're working," Dickmann said. He said the company doesn't have any immediate plans to implement IM tools.

Good as Gold

The familiar "ping" of a message coming across the computer screen has become commonplace in some insurers' offices, and they are finding IM not only improves accuracy and provides timely customer response but adds dollars to their bottom line.

Because the technology is less intrusive than a phone call and more immediate than e-mail, IM's proven ability as a fast, easy-to-use and inexpensive mode of communication that works across multiple platforms is driving its appeal. In addition, the technology's ability to offer presence awareness allows IM users logged online to instantly tell whether or not someone is available for a quick chat.

"IM significantly decreases the time required to find people with common business goals and respects their time while getting work done," said St. Paul's Thompson. "All in all, IM has done a lot to build the Knowledge Exchange system throughout our organization."

Insurers also believe IM lends itself well to multitasking. "Agents can efficiently handle two to three sessions simultaneously," said Valentini of Amica Mutual. However, Amica discourages agents from handling a customer phone call and an IM chat session simultaneously because of fear that telephone customers might sense the agent is preoccupied with trying to communicate in two different modes.

Insurers also are recognizing considerable cost savings as a result of using IM. Reducing staff time previously spent placing numerous daily phone calls or sending lengthy e-mails, in addition to slashing long-distance charges, all are equating to increased productivity and profitability. Gartner estimates that corporations using IM could reduce internal e-mail volume by 30% to 40% and voice-mail volume by 10% to 15%.

IM is a burgeoning technology that should be used, said Jamie Bisker, research director in the insurance practice for TowerGroup, a research and advisory firm based in Needham, Mass. "Convenience is a major benefit of TM, because it's an asynchronous communication mechanism that doesn't require both parties to actively participate, yet it provides real-time feedback because when individuals are engaged in an TM conversation they can exchange messages as fast as they can type them."

Glen Vondrick, president and chief executive officer of FaceTime Communications, which delivers IM solutions, said he believes that IM is the answer insurers are seeking, particularly when looking for methods of rapid, time-sensitive communication. He noted that IM users are privy to instant, interactive conversation not achieved by e-mail, in which users aren't aware of a recipient's availability or when the stored-forward information will be read.

"It's not the end-all to communication, but it's a piece of the communication suite that helps bring us together," said Chubb's Farr.

Security Nightmare?

IM is the popular peer-to-peer technology that could be "the Trojan Horse that allows hackers to destroy a network," according to a recent article on SearchNetworking.com. However, insurers aren't as skeptical.

While the potential for exposure to viruses, malicious code and other security risks has postponed or halted some companies' decisions to adopt the technology, insurers have found little cause for alarm. Because their TM technology sits behind company firewalls and private TM systems are encrypted, insurers feel well protected against security breaches caused by the exchange of TM messages.

"We have the ability to shut the technology down within a matter of minutes if we see a threat to the environment' said Rick Lacafta, vice president and CIO of Hartford, Conn.-based Travelers Property Casualty. The company reserves IM predominantly for internal use because security concerns, such as unencrypted messages coming in from public systems or attachments corrupted with viruses being sent via IM, have hindered Travelers' decision to move the application externally. "Because of the lack of maturity of the solutions available now, there can be some security risks associated with going external," he added.

Bill Carr, partner with the information risk-management practice at the accounting and tax firm KPMG LLP, said IM is an "insecure protocol that can allow private information and files to be transferred outside existing security parameters configured within systems that companies developed." In addition, he said the absence of history tracking, or logging of information, also might pose difficulties.

"The main risks insurers face around security include things like loss of confidential data and viruses being introduced into the organization, network bandwidth usage, productivity and legal risks," said Jim Murphy, product marketing manager for IM and peer-to-peer technology for Scotts Valley, Calif.-based SurfControl. The company recently released its SurfControl Instant Message Filter to allow companies to control publicly available versions of IM tools, such as Yahoo! Instant Messenger and ICQ, and major peer-to-peer networks. The filter selectively allows traffic to pass over a company's network, giving control to network administrators.

Companies using freeware IM programs, such as America Online Instant Messenger, Microsoft's MSN Messenger and ICQ, or those allowing public network messages to pass through their private network systems, are at risk for possible security breaches. Because these systems lack encryption capabilities, many have features that can bypass traditional corporate firewalls. That's why companies such as MassMutual Financial Group don't use public networks or allow messages coming from those systems to enter their private networks.

Insurers need to pay close attention to security risks and employees' use of the tool. "First and foremost, companies should make sure employees know their IM usage will be monitored," said Bob Pratt, director of product marketing for Blue Coat Systems Inc., adding that implementing a company policy about employee monitoring is a key step in setting up an IM system. "Notification is essentially 90% of the battle, and employees are not going to spend all of their time on IM if they know they're being monitored to some degree," he said. Blue Coat offers Web-based solutions built to protect corporate networks against Web-based viruses, unfiltered inbound and outbound Web communication and inappropriate Web content.

MassMutual Financial Group currently monitors employees' usage of IM from several standpoints, including regulation and utilization of the network, said Chris Modie, executive vice president and CIO.

In addition, companies, particularly those in regulated industries such as insurance, should install systems that can log IM messages, said Pratt. "This is particularly important under HIPAA (Health Insurance Portability and Accountability Act) and financial-service regulations in which companies will eventually legally be required to perform," he added. Finally, he said insurers should decide whether or not employees may use IM freely, or whether to shut off some public services. "This varies between companies--some want to restrict it, while others treat it like the phone and allow a certain level of personal use with employees knowing usage is being monitored," he said.

While security is hindering some companies' decisions to jump on the IM bandwagon, Pratt said that about one-half of companies he's spoken with now have IM enabled and want security on top of it, while the other 50% of businesses don't allow IM. "We've found very few companies that never want it to be available, and we see enormous interest by those using it and from people who want to use it but for legal reasons haven't been able to yet," he added.

Tomorrow's Use

Insurers believe the penetration of IM into the industry is inevitable.

As members of Generation Y, already comfortable with the use of IM, enter the work force, insurers believe it will become an ubiquitous tool in their businesses.

"IM is the ideal workflow augmentation application, and if insurers offer ability to use it through their Web sites or follow the process of application to know where it is, I believe the company will be at the leading edge in providing additional value," said FaceTime's Vondrick.

Insurers also believe IM will continue to extend its reach into mobile devices. The result? It will increase productivity, particularly among sales representatives and agents in the field or those working from home.

"IM is going to be a very important tool for companies to use to make it easier and faster to do business both internally and externally," said St. Paul's Thompson. He said IM is one of many collaboration tools helping insurers bring what he calls a human element to a virtual environment.

Instant Messaging Shorthand

Instant messaging has created a new language based on phonetic acronyms.
The following is a sampling of what's showing up in the business world.

Abbreviation          Definition

?4U             Question for You
BRB                Be Right Back
F2F                 Face to Face
GW                     Good Work
IC                         I See
IDK                 I Don't Know
K                             OK
NRN           No Reply Necessary
OTP                 On the Phone
PCM               Please Call Me
PLZ                       Please
TTYL           Talk to You Later

RELATED ARTICLE: Interoperability Effects

Insurers are feeling relatively little effect at this time from the lack of instant messaging interoperability standards.

While TM continues to take the business world by storm, some industry experts believe its growth is being hampered by lack of interoperability. Major vendors of TM services, such as America Online, MSN and Yahoo!, block interoperability in order to maintain markets and keep their systems proprietary. The development of standards would create uniform vendor protocols for compatibility and help allow public TM systems to communicate with one another.

Lack of such standards hasn't posed a major stumbling block for insurers. "This has little effect on us because agents log onto our site, aren't aware of what's happening with the technology and just click a button to chat," said Rob Shoenfelt, chief information officer of Celina Insurance Group in Ohio. Because information sits behind the company's firewall and the general public isn't logged into its system, lack of interoperability standards is creating little cause for alarm.

"While it's now easy to implement IM for an enterprise, various challenges emerge when a company wants to go outside the enterprise," said Kevin McLellan, IBM's marketing manager for workplace collaboration products. IBM has taken an open standards approach to its enterprise TM gateway, which is based on the Internet Engineering Task Force's standards SIP (Session Initiation Protocol)--a signaling protocol that provides the guidelines for a chat session between TM users on different servers--and SIMPLE (SIP for Instant Messaging and Presence Leveraging Extensions)--an application of the SIP protocol for server-to-server and client-to-server interoperability in TM. The standards allow interoperability between communities so that companies that implement a SIP gateway can connect their TM communities, he added.

While many insurers and industry experts believe interoperability standards are inevitable, they believe the move toward standardization won't be immediate. "While we believe this is motivation to get things under control, businesses face two big problems. Each tool now uses its own proprietary protocol for traffic, making it difficult for companies to manage the use of these tools, and we're not yet near standardization," said Jim Murphy, product marketing manager for TM and peer-to-peer technology for Scotts Valley, Calif.-based SurfControl, which offers Web and e-mail filtering products. Secondly, these new technologies also pose problems because there's no well-defined acceptable use policies and users are uncertain about what are appropriate business usages. "For example, a user of Yahoo! IM can't communicate with an America Online user," he said, "And because there's no standardization of appropriate usage, businesses are struggling with how to successfully implement these tools in the office environmen t." Before TM and peer-to-peer can become commonplace business tools, with acceptable risks, they will require management solutions similar to those already being used for e-mail management, he added.

Last year, several financial services firms, including Credit Suisse First Boston, Deutsche Bank, J.P Morgan Chase, Lehman Brothers, Merrill Lynch, Morgan Stanley and UBS Warburg, took a step closer to creating TM standards. The companies formed the Financial Services Instant Messaging Association to encourage the development and adoption of IM standards across the industry. The goal of the nonpartisan association is to help companies and others in the financial services industry evaluate various TM systems to identify those that meet interoperability and security requirements.