However, as insurers rush to provide Internet-delivered services, they're finding their current policy administration systems frequently lack the flexibility and compatibility to reach out effectively to the Web. While these systems may be adequate for the 'old' way of doing business, they weren't designed to meet Internet-age expectations.

Modifying or extending these systems to meet anywhere, anytime service demands and direct, user-friendly customer access is exceedingly difficult, if not impossible.

The answer for many companies is to replace their current policy administration system with one built on a technology platform that will not just work with the Internet but embrace it, leveraging the Internet to its full advantage.

Some may view this as just another incremental step forward for an industry that has long searched for technology that could deliver on all those unfulfilled promises of infinite flexibility, scalability, functionality and security.

However, Web technologies really can deliver, breaking the chain of incremental changes that historically have failed to meet expectations, but knowing how to translate endless Web hype into reality is critical to every insurer as they evaluate new systems and technologies.

Unfortunately, the Web does not allow technology buyers to forget the warning, “Let the buyer beware.” Potential buyers are frequently a bit befuddled amid software vendors making grandiose soup-to-nuts claims with a barrage of Web-tech jargon.

So, how does an insurer know which solution to choose? Virtually every technology company claims their solutions were built for today's insurance Web world. But, how do you distinguish the best from the rest? How does someone differentiate between the endless Web claims–Web-enabled, Web-based, 100 percent Web, and more?

Software vendors claiming their policy administration system is Web-enabled often mean the solution originally was developed as a Windows- or mainframe-based application, but a Web front-end has been added as an alternate access method.

This approach allows insurers to provide user access to a limited subset of functionality through the Internet, but the system itself is essentially unchanged from the 'pre-Web' version.

While this might be a good interim approach, it does not address most insurers' strategic need to provide more functionality, nor does it offer any improvement in the creation and deployment of new products and processes.

In Web-enabled systems, only rarely is the Web front-end seamlessly integrated with the core application. As a result, the addition of the Web interface frequently increases system complexity and associated costs for maintenance and enhancements.

While systems that have been Web-enabled can allow companies to meet short-term objectives to deploy some Internet functionality, they fail to deliver longer term flexibility and efficiency.

“Web-based” solutions are generally next-generation systems that go beyond Web enablement. Unfortunately, this term is vague and currently used to describe everything from “re-platformed” legacy systems to new Web technologies to systems designed and built as Web solutions to component-based solutions delivering Web services when and where needed.

Differences between these options can have significant long-term implications. It's essential to decipher vendor Web jargon into useful information. Here are a handful of key questions that should be asked of every vendor with a 'Web-based,' 'true Web' or '100 percent Web' solution under consideration.

o Is the solution written in a Web language?

Beware of Web applications that aren't actually written in a Web-generation language. Web-generation languages include languages originally designed for the Internet or that have the Internet as a key focus.

The three predominant Web-generation languages are Microsoft's .NET, Sun's Java, and the PHP open source solution. Systems written in other languages generally require more work to utilize Web features and are less efficient doing so.

Even more importantly, hiring talented individuals experienced in outmoded languages is becoming more difficult and more expensive.

o Does the solution have a user interface designed for the Web? Does it behave like a Web site?

Web applications that have tried only to translate the user interface of an old Windows or mainframe interface are forgoing some key advantages of a Web-based user interface.

Factors including training costs, customer acquisition, customer service and agent efficiency depend on leveraging the general understanding and ease of use of the Web. Simply replicating the old, obscure user interfaces and inefficient methods inside a browser can mitigate or even eliminate those benefits.

o Can the solution support multiple distribution channels?

A critical new demand is for policyholders, agents, customer service reps, and others to have access to similar tools and information. If an application can't leverage common business logic across all channels, a key benefit is lost.

Similarly, it is invaluable for the solution to support differing user interfaces for a single process flow. For example, customers should have a purchasing experience that makes sense to them, while agents should have the screen configuration that's most efficient for their needs–and both should be possible with a single system without duplication of rules, logic or code.

o Does the solution use Web-age scalability techniques?

The advent of companies such as Yahoo!, eBay, Google and others has led to a change in the way computer systems scale. These companies have developed techniques to eliminate practically many of scaling challenges for all but the most enormous undertakings.

A Web-based insurance system should ideally take advantage of these proven methods, allowing cost-efficient linear scaling across a virtually unlimited number of servers.

o Is the solution a real-time application?

Scaling techniques can, in turn, help empower another key expectation of modern users–that everything occurs in real time. If a customer makes a payment or endorsement or files a claim online, the transaction should be reflected immediately.

This affords every agent, customer service rep or claims adjuster immediate access to up-to-date information.

o Is every user interface to the system Web-based?

Systems claiming to be “Web-based” often rely on a traditional GUI (graphical user interface) desktop application. Unlike GUI desktop applications, true Web applications inherently are centralized–hosted anywhere and accessed from anywhere, with virtually no discernable difference to the business.

Also, Web applications can be maintained in one place, with no redeployment of client software.

The Internet is living up its promise to be the transformative technology of our time. Companies taking full advantage of Internet-age solutions will have a distinct competitive advantage, not just in distribution and customer satisfaction, but virtually every aspect of their businesses.

Reaching that goal depends on the ability to separate accurately the hype from the facts and make the right technology choices.

Max Drucker is managing partner with Steel Card, LLC in Santa Barbara, Calif. He can be reached at [email protected].

Caption for Spider Web shot:

Many carriers are trapped in the 'old' way of doing business, but must free themselves and shift tech systems to meet Internet-age expectations.