When George Briones joined Fred Loya Insurance eight years ago, the company, based in El Paso, Texas, had just 14 offices and $7.5 million in automotive insurance premiums. Today the company has nearly 200 offices and revenues of approximately $200 million. It was recently named 44th on the Hispanic Business list of the top 500 Hispanic businesses in the United States.

Briones, now director of information systems and information technology for the rapidly growing firm, says technology has been a growth engine. "Our CEO sees technology as the edge we need to thrive in a competitive market," he says. Lately, it's Internet Protocol (IP) Communications technology that is underwriting Fred Loya Insurance's rapid expansion.

Briones and his staff of 14 have created a cohesive communications infrastructure that allows the company's staff to communicate with one another and with policyholders, agents, and business partners using the most appropriate and effective mix of voice, data, and video.

With large offices in five of the largest cities in Texas and smaller offices scattered throughout Texas, New Mexico, and California, the firm used to route incoming calls through a private branch exchange (PBX) system, then over the public telephone network to field agents. "Our agents in the field offices never knew where the calls were coming from, and they had no way to track or identify callers," Briones admits. "Now, call routing is quick and effective with our IP setup."

Fred Loya Insurance currently uses about 1,200 Cisco 7940 IP phones connected to its Cisco network, deployed among 100 of its offices. Briones chose Cisco Gold Certified Partner Avnet Enterprise Solutions to help deploy the network based on its previous successes in implementing Cisco-based voice and data solutions.

Briones says that the firm has gained flexibility and scalability with its IP Communications system because:

• New offices are easy and fast to deploy.
• Installation is alf the cost of a PBX installation.
• If agents don't answer a call at a local office within five seconds it's automatically routed to a call center.
• Any information in digital form can be transmitted over the IP network.

The company adds about four new offices a month, with plans to have more than 400 by the end of 2006.

Outmoded, inflexible voice and data networks make it difficult for insurance companies to share information internally and respond quickly to customers.

"Today's customers have high expectations for service delivery and are intolerant of delays and inadequate services," notes Elizabeth Herrell, a Forrester Research analyst who specializes in IP telephony and related technologies. "Contact centers that continue supporting customers with aging technology risk falling behind competitors in delivering first-class services."

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Insuring Success

Like Fred Loya Insurance, Beneficial Financial Group found that dealing with aging communications equipment drove its desire to adopt a more nimble network. A life insurance company based in Salt Lake City was put in a difficult situation in December 2003 when its PBX equipment provider dropped maintenance support for Beneficial's primary phone system.

"We had a huge challenge and a real communications problem, with unsupported hardware and dissimilar types of systems that did not work well together," recalls Brent Burgon, director of technical services at Beneficial. After taking a closer look at the options available, Beneficial chose to adopt a converged voice and data network with help from SBC DataComm. Beneficial operates primarily in Utah, Oregon, Arizona, Washington, Idaho, and California, with about 600 agents. The company now has a single converged network for voice and data anchored by Cisco switches and IP Communications solutions. The company is now engaged in a pilot program to add remote field offices to the main network. It expects to reduce long-distance phone charges by routing calls on its own network. Beneficial employees especially like being able to access voice mail from their e-mail systems, using Cisco unified messaging technology, which gives them a single inbox and flexibility in how they access their messages.

Beneficial is extending its insurance and investment choices to include a wide selection of securities products, variable products, and mutual funds. The firm's communications system makes call-center agents more efficient and improves its ability to offer these new types of financial services, for which customers demand around-the-clock service.

Making a Claim for Convergence

Flexibility and control are just the start of what's possible with a converged IP network. The productivity benefits also allow companies to:

• Improve service and business processes
• Take advantage of new types of data, voice, and video services to provide excellent customer service

Beneficial Financial Group plans to use Cisco CallManager software to recognize agents by caller ID. The phone system will communicate with the agent database to instantly display all pertinent information about the agent calling.

Fred Loya Insurance also plans to integrate its policy-administration applications with the phone network. When customers key in their policy numbers via a touchtone phone, the system will access their records and display them to agents via their PCs or phones as the call is routed.

Fred Loya Insurance runs a paperless office, driven by online forms and digital signatures. Ultimately the company hopes to use voice-recognition technology to allow its customers to make requests and enter policy information by phone and record it directly into the database. Briones says all of these services depend on a fast, reliable network- and plenty of data storage capacity.

Although many financial-services institutions are aggressively researching and adopting these new IP technologies, the insurance segment in general tends to be a bit more conservative. For example, 55% of financial-services companies surveyed by Forrester plan to invest in VoIP technologies in 2005, versus just 50% of insurance companies.

"Insurance is an information-intensive business," says Donald Light, a senior analyst with Celent, a research and advisory firm. "Competitive success depends on data and information that is sent and received quickly, on visual and graphic information that supplements text and statistics, and on personal relationships that require a voice and visual context." Light believes nearly all insurers will ultimately create converged networks, simply because they are so germane to this information-intensive business. "Doing so earlier rather than later provides early-mover advantages as well as greater flexibility for future expansion," he adds.

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About the Author

David Baum is an independent writer and consultant who frequently covers networking technology. His work has appeared in Information Week,i Oracle's Profit, and the Los Angeles Times.

iQ Magazine, Third Quarter 2005