Most people in insurance companies never think about thenetworks they use every day as they work with their computers andtalk on the phone. If they give the networks any thought at all,they might have a vague sense that there are a bunch of pipessomewhere and a much clearer sense that those pipes had better beup and running 24 hours a day.

This view of networks, however, fails to appreciate thatinsurance is an information business. The insurance company thatwins is the insurance company that is better and faster ataccessing information, processing it correctly, making the rightdecisions, and working effectively with its customers and businesspartners. Voice and data networks provide the infrastructure thatmakes these things easier or harder to do.

Today, many insurance companies look at their networks not as asteadily depreciating asset, but rather as a strategic investmentthat can lower expenses, speed processes and make more people wantto do business with them. The boundaries of the insuranceorganization are expanding--through multichannel distribution,strategic partnerships and outsourcing. The key to making thesechanges work is the creation of a single converged network handlingdata, voice and video.

Just as insurance companies have accumulated legacy policy andclaims systems, they have accumulated legacy voice and datanetworks. An acquisition here, a new distribution channel there, anew call center over there--it all adds up. Legacy networks areinflexible and expensive to maintain--requiring different groups ofIT staff to support incompatible and aging equipment. Having alimited amount of traffic on a lot of networks is inefficient. Ifyou want to control expenses, upgrade your data network and startusing it for telephone service, as well.

Most data networks use an Internet Protocol (IP) to transmitdata. Sending voice over an IP network is called voice over IP(VoIP), or more broadly, IP telephony. Video and videoconferencingcan travel on the same network in an IP format.

A single converged voice and data network lowers expenses inmany ways. One staff group (after appropriate cross-training) canperform installation, systems integration, configuration andmaintenance. Network utilization increases, fewer servers arerequired, and a unified storage and retrieval system can supportboth voice and data.

Changing the phone numbers and telephone instruments becomeseasy. With an older phone network, moves, additions and changes canrequire hours because of the need to manually rewire a telephonecloset. With VoIP, a person takes an IP telephone, unplugs it atone work location, plugs it into an IP jack at a new location, andis ready to go--the system automates the move. Last, but not least,long-distance charges are reduced substantially, because VoIP callsare routed from region to region over the insurer's network.

Converged networks provide significant operational benefits overmultiple, disparate networks: people become more accessible,information is more available, and time and place are lessconstraining. Putting voice and data on the same network allowsvoice mail and e-mail to be placed in a single inbox. This type ofunified messaging service allows a person to see all messages inone place at one time, and to prioritize accordingly. IP telephoneshave small screens that can display useful, as-needed information,such as internal phone directories, key data about a caller orcorporate news.

An even more powerful feature allows conference calls (andvideoconferences) to be set up in real time. A phone call betweentwo people can be expanded to bring in other people to accessspecialist knowledge or to reach a decision quickly. Insurer staffon the conference call instantaneously can share screens, documentsand data--because everyone is on the same network. Videoconferencesallow an additional level of communication--participants can seefacial expressions and body language. Visual contact makes iteasier to establish trust and commitment.

Another significant benefit of a converged network is that it iseasy for an insurance call center to become a multichannel contactcenter. Policyholders, agents and brokers want to interact withinsurance companies in many ways--by telephone, the Internet, evenby mail and fax. Traditional insurance call centers have legacyissues, including multiple locations with incompatible hardware andsoftware, inflexible and labor-intensive call routing, limitedmanagement reporting, difficult access to caller information, andhigh staff turnover.

Since the late 1990s, insurers have made large investments inWeb-based information and self-service functions for the samepeople who use the call center. Many insurers are now taking thelogical next step by directing communications across all channelsto a contact center.

A converged data, voice and video network provides the sameexpense advantages to a contact center as it does to any other partof insurance operations. However, the largest payoff is inoperations. Putting several contact centers on the same convergednetwork creates a flexible staff pool to handle "peaks" and"valleys" of call volume.

Setting up conference calls in real time leads to "once anddone" calls. Call center representatives can easily accessinformation about a caller and the caller's issue--whether thatinformation resides in voice mail, e-mail, images, applications ordatabases. As more consumers and agents have their own VoIPcapabilities, they can switch easily from a Web-based to atelephone interaction (what is called click-to-call).

Before an insurance company can implement a converged network,however, business and technology managers need to address severalimportant issues:

o How will a converged network provide the same or better levelof reliability and security as the networks it replaces?

o Will the rollout to different organizational units be all atonce (a "big bang") or phased (a necessity in largerorganizations)?

o Most important, what is the target mix of business andtechnology benefits desired--expense reduction, operatingefficiency, better service or increased agility?

Answering these questions provides the foundation for asuccessful converged network implementation.