The insurance industry goes mobile: if "bureaucracy," "inefficiency," and "slower than molasses" come to mind when you think about insurance companies, think again. Claims adjusters and sales agents are using mobile technology to speed things up.

THINKING OF ENABLING WIRELESS? Why not Focus on process improvement? Although many wireless initiatives focus on customer-facing applications, often the greatest returns come from improving internal business processes.

You might not think of the insurance industry as cutting edge, but several large insurance companies are using mobile technology to significantly cut costs. After overcoming issues of bandwidth and security, these companies have discovered significant ROI in the areas of claims and sales.

One large auto insurer in the southern U.S. has deployed wireless laptops to adjusters and raised productivity by 25 percent. These gains come primarily from improvements in the dispatching process, which has plagued insurance adjusters for decades. Adjusters often receive several claims in close proximity; but, without mobile technology, are unaware of all the claims in time to schedule them efficiently. Adjusters can also use mobile devices and applications to write the appraisal at the bumper of the car, verses back in the office which can result in lost time, and possibly lost data.

Figure 1 shows a typical wireless architecture that lets employees access corporate data centers via the Internet. Two key components of this architecture are the wireless gateway and the firewall; these are the main points of entry into corporate data, and provide the keys to a successful wireless implementation.

[FIGURE 1 OMITTED]

And, the device of choice is ...

Mention wireless to most laymen and they immediately think of mobile phones. However, looking up a stock quote or searching for news is tough enough on a phone; processing an insurance claim is out of the question. At this point, mobile phones are best used as way to push information to users via pre-selected criteria (e.g., pre-programmed stock quotes or news headlines). Conducting real business on these smaller devices is extremely awkward.

Personal digital assistants (PDAs) and other handhelds are marginally better; but, keyboards can be awkward, and the small screens, although graphical, aren't up to the task of handling any complicated "paperwork."

That leaves the forgotten mobile device: the laptop. In the insurance industry, Panasonic dominates (table 1). The Panasonic Toughbook has less than a 5 percent failure rate, where normal laptops exceed 20 percent, according to Mark Lund, a business development manager with Panasonic. Panasonic makes both semi-ruggedized and fully ruggedized laptops designed to military specifications.

On the road with a claims adjuster

According to Jim Courson, director of sales at IBM, "Wireless isn't for everyone; but, for the right business model, it can be an incredible part of your whole solution." Courson suggests that, in addition to streamlining the dispatch process, deploying a wireless claims solution can further lower costs by reducing storage fees for damaged vehicles, hence getting the adjustment handled more quickly,

Claims

Most consumers believe the claims process never happens quickly enough, and that carriers deliberately drag out the process to delay payment. Nothing could be further from the truth. On average, the longer a carrier waits to settle a claim, the better the chance the insured will litigate.

In addition, a shorter claims period results in a happier customer. Supporting this is a study conducted by Accenture, that found 94 percent of consumers who filed a claim cited quick resolution of the claim as highly important to their satisfaction with the claims process, while only 74 percent stressed the importance of the settlement amount offered.

One innovative wireless application for auto claims lets the insurance company dispatch the claims via a wireless device so it can process the first notice of loss quickly and efficiently. Traditional claims processing requires an adjuster to obtain claims notices a day earlier so they can plan their routes, processing three or four claims per day. The adjuster normally dials into the host, and downloads the next day's claims notices.

One delay common to almost every claim is the estimation process: This involves adjusters, the body shops, and salvage yards. Expediting this processes can save everyone time and money. Using wireless devices, adjusters can download claims notices and can even leave a copy of the claim with the body shop or insured, saving valuable time. Using a wireless device, claims adjusters can now process 20 percent more claims per day, resulting in a 20 to 40 percent increase in productivity.

Greg Koester of Country Insurance has seen many benefits from his company's wireless claims roll-out. "In addition to the customer service benefits to our clients through faster settlement, our initiative has provided our appraisal force with reduced windshield time, which has improved morale and reduced turnover." (Windshield time is time an adjuster spends behind the wheel driving to the next appraisal. It's often considered lost, unproductive time for an appraiser and anything that can be done to reduce this time is extremely important.) Country uses Panasonic CF28 wireless laptops connected to the Cingular network. Claims agents are dispatched using ADP's PenPro assignment solution.

Sales force automation 

You might not think of life insurance as a great opportunity to implement wireless technology because customers don't have a high sense of immediacy when purchasing a term life policy. However, one life insurance company is piloting wireless handheld devices for use by its field sales agents. The goal is to help its staff quickly verify coverage in the event of a claim, as well as instantly look up policy information to make adjustments.

If all customer data is readily available, a wireless-enabled sales force can see dramatic improvements in productivity and customer service. Instant access to customer accounts, pricing, and billing information, along with history, can greatly improve how sales managers handle client engagements. Field sales representatives can obtain instant access to critical information stored in back-office systems, significantly reducing the cycle time of answering customer questions. Because most life insurance sales are handled in the client's home, it's a great convenience to have this information readily available for the customer to review when with their agent.

Is coverage an issue?

Nationally, wireless coverage is inconsistent and remains the number-one issue facing wide-scale deployments. As a result, many insurance companies haven't developed their own client applications for claims processing and estimating losses, mainly due to the need for off-line processing when out of the wireless coverage area.

Three vendors dominate the landscape when it comes to remote claims processing for field adjusters (table 2). Cumulatively, these applications have captured 90 percent of the market.

Bandwidth

Many CIOs site wireless network speeds as a major reason not to engage wireless technology. The slow adoption of wireless applications has been blamed mostly on speed, because data transmission rates hover near the Internet speeds of the early to mid-1980s. Most wireless data networks designed by AT&T, Motient, and Cingular still run at 9,600bps; however advancements in technology are permitting speeds of 6080Kbps. Although still a far cry from today's 1.5Mbps cable modem for Internet access, a 10-fold increase over the next five years isn't unrealistic.

The future

The future holds great promise for wireless technology in the insurance industry--if companies use proper business models to empower consumers, employees, and agents. Most business-to-consumer (B2C) wireless implementations don't fit well into the insurance model; however, business-to-business (B2B) shows great promise, where business processes are enhanced or automated.

Traditionally, a Web-enabled architecture is sufficient to support a wireless initiative because the thin client technology found in both (Microsoft .NET and Java) supports low-bandwidth networks, a common feature with wireless deployments.

Where appropriate, companies should look to extend the reach of their computing systems well beyond existing infrastructure, and adopt an enterprise architecture that supports the anytime, anyplace, anywhere, paradigm.

Table 1: Wireless claims leaders--Progressive and State Farm lead the
pack when it comes to innovative wireless deployments. Because of their
ruggedized design, Panasonic Toughbooks are the laptop of choice. (See
the photo on the left.)

AUTO PROVIDERS       LAPTOP MODEL                TYPE

Progressive          Panasonic Toughbook CF71    Semi-ruggedized
State Farm           Panasonic Toughbook CF28    Fully ruggedized
Country Insurance    Panasonic Toughbook CF28    Fully ruggedized
ACC/Windsor          Panasonic Toughbook CF71    Semi-ruggedized

AUTO PROVIDERS       QUANTITY DEPLOYED

Progressive          2,200
State Farm           1,000 *

Country Insurance      165
ACC/Windsor             80 *

* estimated

Table 2: Auto claims software packages--These companies provide a
vital service because connectivity isn't always available, yet the
claim still has to be processed.

COMPANY                  PRODUCT              WEB

CCC Information          Pathways             http://www.cccis.com
Services
ADP Claims Services      Claimsflo Wireless   http://www.adpclaims.com
Group
Mitchell International   Mitchell Wireless    http://www.mitchell.com
                         UltraMate

MOBILE BUSINESS BENEFITS

All insurance companies want to increase the number of claims handled in the field. Wireless solutions help them achieve this goal by increasing cycle times and appraiser productivity. Insurance companies can also use wireless technology to streamline their sales processes.