Why Hasnt Wireless Taken Off?
Portable wireless devices seem to make a lot of sense for agents and brokers, especially those who take their business into the field, yet the insurance industry has been very slow to join the wireless ranks.
“Today, theres really not an effective broad use of wireless capacity in the insurance industry among life and health carriers and broker/dealers,” says Bob Lotter, CEO of eAgency Systems, Newport Beach, Calif. “This is not what we had dreamed to achieve.”
Lotter lays out several reasons for the lackluster performance of wireless in insurance:
Lack of bandwidth. Bandwidth is the transmission capacity of a given electronic line. While users would like to have all the capacity of their desktop computer browsers on a wireless device, current technology doesnt allow that, says Lotter. “The problem with browsers is that they need bandwidth and an omnipresent connection [to the Web],” he notes. Thus, wireless coverage would have to be at least as good as cellphone service, which itself can be spotty.
Users who find a standard 56k dial-up modem frustrating will be even more frustrated with handheld devices that offer less than 10k in bandwidth, Lotter points out.
Security. Wireless devices require communication via tower gateways and Internet connections in both directions. Security for such communication “has not been resolved until recently,” says Lotter. “Most wireless applications still have security holes. Its not corporate-grade security.”
Multiple devices. Many different kinds of devicesincluding Internet-ready phones, Rim BlackBerry, Palm, and personal digital assistants (PDAs)can be used to access data. Each device may differ on screen size, computing power, and interface, and Web-based services need to differentiate between devices in order to know “how to behave” with them, Lotter explains. This involves “lots of changes and layers upon layers of complexity,” he adds. “Every version of Explorer and Netscape needs to be covered.”
Human resistance. “Insurance companies dont know what to do,” says Lotter. “Agents wont carry laptops into the home; we know this by studies. They feel its presumptuous for a life agent to take a printer into the home.” As a result, portable technologies make less sense to such agents, he notes. This situation is exacerbated by the fact that to enable digital signatures, agents must enter into some kind of e-service, Lotter observes. To solve these problems, “well need to retrofit the industry so it can process electronic applications.”
Lotter expects many of these obstacles to be removed as new, faster communications standards take hold. He envisions “a total digital and wireless clearinghouse for insurance transactions. When the industry is ready to accept wireless, devices will be there and people will be accustomed to using it,” he adds.
He predicts, however, that such advances will take “five or more years,” adding that “a vast amount of work is needed so that [insurers] can accept and process a digital transaction.”
Reproduced from National Underwriter Life & Health/Financial Services Edition, July 8, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.