One thing that could help grow the online market is the proliferation of wireless broadband technology, but most consumers don't have such devices as yet, he noted. "Wireless broadband has not evolved to the level we thought it would," Mr. Chookaszian stated. He estimated a current penetration of wireless at about 20 percent of consumers. "It's going to be a while [before wireless usage grows significantly]. True broadband is five years out."

As a result, he noted, "we haven't changed our mindset in purchasing." Wireless access could enable consumers to easily check the status of their accounts from any place that had service. Once more users adopt the technology and use it, the value of such wireless "networks" will increase significantly, he explained. He reiterated, however, that this will not happen "in the near term."

In a technology panel following Mr. Chookaszian's address, Judy Johnson, vice president of insurance information strategies for the Stamford, Conn.-based Meta Group, said the consequence of using technology to do something quickly that used to take longer is that it has "ratcheted up expectations for service" among consumers.

In the insurance industry, said Ms. Johnson, Meta Group is seeing a trend among insurers toward "building it ourselves" when it comes to technology applications to improve productivity and capture e-business. The researchers see this trend continuing "over the next few years," she noted.

According to Cathy Ellwood, another panelist, who is director of corporate strategy for Nationwide Insurance, Columbus, Ohio, one of the fastest areas of growth has been Internet usage among Hispanics.

Ms. Ellwood also expects increased usage of global positioning systems (GPS) in claims response. "It could be used to get to a policyholder's or claimant's house faster," she said. Instant messaging could also help in the claims process, allowing a claims adjuster to get faster check approvals, for example, she noted.

When it comes to spending on technology, Ms. Ellwood said she has seen a trend toward "dramatic cost cutting," and called on potential tech buyers to quantify the results and link the technology to their business goals, rather than purchasing "technology for technology's sake."

Another panelist, Jeff Chookaszian, engagement manager for McKinsey & Company, New York, focused on customer relationship management, noting that the insurance industry has made "considerable investments" in CRM.

"Tens of millions have been spent just on CRM pilots," he said. But despite the outlay of funds?in an effort to boost efficiency, customer loyalty and customer retention?"most insurers have failed to see the value of their CRM investments," he stated. He cited industry studies, which found that "69 percent" of CRM installations fail to deliver significant value. Much of that failure has been due to poor implementation, he added.

Success in CRM, said Jeff Chookaszian, depends on having the right strategy and good execution. The right strategy involves looking at the company's business model, determining customer proximity, and having "a high degree of influence over sales and service channels, he noted. For this reason, direct writers may do better with CRM initiatives.

Companies who rely on the independent agent model face "a serious barrier" in that they don't "own" the customer, but the agent does, said Jeff Chookaszian. "They will realize less from CRM, but it's not a lost cause."

Execution of a CRM strategy involves understanding customer segments, individual customer profitability and value, and customers' needs and propensity to buy, he stated. The next step is to tailor products to what customers need and want, he explained.