Insurance Claims Wi-Fi
June 30, 2004
Wireless connectivity can save millions a year in costs for insurance companies, an industry where every second counts on every claim made.
Much of corporate America still raises a skeptical eyebrow at the mention of Wi-Fi connectivity. In the insurance industry, meanwhile, the drumbeat of return on investment (ROI) is sounding ever louder, and executives in search of a competitive edge have begun to heed the call of wireless networking.
"Claims adjusters are out in the field, and insurance carriers have seen that there is a savings to be had by enabling those adjusters to send information wherever and whenever they are, without having to go back to the office to access a hard line," said Maggie O'Hara, a divisional vice president at IVANS (formerly an acronym for Insurance Value Added Network Services), a reseller of network services to the insurance industry.
Even small efficiencies can make a big difference here. Analysts say claims processing can represent more than half of an insurer's operating cost. Make those claims go faster, and the bottom line can change dramatically. The average claims adjuster for automobile damage might handle six new claims a day, according to a recent IBM white paper called How Mobility Improves the Core Insurance Claims Process. In a company with 1,000 adjusters, if each of them could handle just one new claim per week, the company could save some $2 million a year in operating expenses.
In addition to boosting efficiencies, some in the industry see Wi-Fi as a route to more effective claims processing. If, for example, an adjuster encounters a complex or unusual case, he or she might connect to a Wi-Fi hotspot in order to access background information and estimating tools without having to trudge all the way back to the home office.
The idea works on the sales end, as well. An agent meets a client at a Wi-Fi enabled coffee shop during the work day. Instead of estimating the premium and then firming up the detail a few days later, the Wi-Fi connected agent can plug directly into the database in real time. The clients gets better information and, perhaps just as importantly, the agent projects the image of a company that is fully on top of its game.
There are limitations, however. Chief among these is the continued paucity of Wi-Fi enabled sites.
"I get the idea of having a handheld or a laptop that you can walk out to the car in order to take or download pictures," said Julie Ask, a senior analyst at Jupiter Research. "But who has the outdoor network for them to connect to? I get that they don't want to return to the office, but there has to be connectivity."Some have suggested that a combination of wireless technologies might be the best bet for the insurance industry.
A cellular network for instance might handle some small amount of information: "Claims Adjuster X should go to accident scene #1," suggested Abner Germanow, program manager for enterprise networking at IDC. Such dispatch information could make for more efficient routing of adjusters.
Wi-Fi would then come into play as a means to transmitting photographs or other heavy data, either from home or from some stop along the road.
As is so often the case, he suggested, neither cellular nor Wi-Fi is ideally suited to do the job alone.
In the meantime, some insurers already have found uses for Wi-Fi, especially in cases where a large team is mobilized to handle large amounts of data.
"You do see it being used by insurance companies in disaster areas, for example," said Germanow. "After you have something like the forest fires in San Diego, an insurance company will send a large group of people to the area to help process those claims. In those sorts of situations you need network connectivity that is flexible and easy to set up and very portable."
The solution in many such instances is to use a satellite link to enable a hotspot on site, and to then have agents in the field transmit their photographs and other data using that link.
To reap maximum benefit, some say, the insurance companies need industry-specific applications, and while those are beginning to emerge, there still is considerable room for growth in this sector.
"The technology is still immature," O'Hara said, "but within a year I think we will see a big difference."