Life insurance agents and brokers may love their cellular telephones, but few appear to be using wireless systems for much other than telephone calls and voicemail.
Fifty-eight percent of U.S. households have cell phones, and 17% of those “wireless households” can use wireless devices of some kind to send text messages, according to new figures from Taylor Nelson Sofres P.L.C., London.
Five percent of the wireless households can use wireless devices to reach the Web, and about half of the wireless Web users use the wireless Web for work, Taylor Nelson reports.
The Gartner Group, Stamford, Conn., is about to survey dozens of insurers to find out how they are using wireless.
For now, though, penetration figures for the life industry are scarce. The industrys technology experts have to make do with their own best guesses.
All agree that cell phone technology is a winner.
“I think the cell phone is pretty much standard,” says Jeff Kraber, a technology advocate at the National Association of Independent Life Brokerage Agencies, Fairfax, Va. “Everybody has a cell phone.”
“Agents are adopting this very heavily,” agrees Robert Lotter, chairman of eAgency Systems Inc., Newport Beach, Calif. “The phones become a pager and a phone. Its also becoming an answering service.”
But Lotter, whose company sells wireless sales force automation systems, says he is not yet seeing many producers using wireless data services to conduct serious business.
“My feeling is that wireless is not being widely employed in this industry,” echoes Stephen Forbes, senior vice president of research at LOMA, Atlanta.
Kraber estimates that the wireless data services penetration rate among the producers he meets could be as low as 5%.
Meanwhile, even in corporate technology planning offices, “almost all technology areas are getting more attention than wireless,” says Matt Josefowicz, a technology analyst at Celent Communications Inc., Boston.
Insurers and other companies are still interested in wireless, Josefowicz says, but he suggests that enthusiasm about implementing wireless projects in the near future might be lower now than it was a few years ago.
In some ways, Kraber observes, the life insurance industry may now be at an earlier stage in the adoption of wireless data services than it was in the adoption of electronic mail services back in the late 1980s.
At that time, Kraber says, many large life insurers were already using mainframe computers and minicomputers to run text-based electronic mail services.
Today, its still rare for life insurers to operate large, official wireless data communications systems, even for their own employees, experts say.
Everyone interviewed agreed that successful wireless services have the potential to increase producers productivity dramatically, but the experts also cited primitive technology, lack of standards, security concerns and producer psychology as daunting barriers.
Producers already know about the weakness of wireless communications technology from the way their cell phone signals fade in and out, or cut off altogether just as wealthy clients are about to commit to buying jumbo life insurance policies.
The technology limitations cause even more problems for the users of wireless data services: a human being might be able to overcome weak signals by using the time-tested “cell phone shout,” but a wireless data connection will simply operate more and more slowly, if it operates at all.
In practice, conventional wireless modems tend to operate at speeds of about 9,600 baud–roughly equivalent to the speeds landline-based modems boasted in the early 1990s.
Insurers who want to work with independent producers also face serious standards problems, according to Chuck Lownie, director of business development at iAnywhere Solutions, a unit of Sybase Inc., Dublin, Calif.
Despite all the gloom about insurers alleged neglect of wireless, “I think the insurance industry is one of the better agent automation verticals,” Lownie says. “Weve been working for many years to automate life insurance companies captive agents.”
But, when insurers try to reach out to independent producers, the job is trickier, because the insurers must decide how many types of wireless services and data devices to support, Lownie says.
Still another major concern is data security.
Some critics ask whether there are really many vans driving around the country full of phone hackers eager to intercept and use information from Aunt Sallys long-term care insurance application.