“What is your Bandwidth Size”

(And why  you will be storing your customer files on 
the Internet sooner than you think”)

by Ron Webber

Recently, during a phone conversation with a Texas insurance agent, I asked him, “What is your bandwidth size?”  He replied, “about 7 ¾ for a Stetson and 7 ½ for a regular ball cap.” 

After I stopped laughing and explained we had a communication problem going on here.  We were talking about the Internet and how he could use it to his advantage.  I fully realized that we all have to be careful about the use of “Buzz” words to the uninitiated.  It is no different than you as an insurance agent explaining a personal line insurance policy to a client.  Especially when you use terms like “Full Coverage” instead of layman’s language that your vehicle is covered for collision with another vehicle and covered for damages other than collision that are listed in the policy.  Insurance agents love buzz words.  After visiting and working in over 250 agencies all over the US, hair stands on the back of my neck when I hear buzz words like “MVR” instead of Moving violation record or this policy covers you for minimum liability instead of “this policy will pay a third party (other than you and the Insurance company) for damages that you cause to that other person’s body or property, but only up to the limits stated in the policy.”  So I caution you to look into the clients eyes when you are talking and using buzz words and see if they are glazing over.

Back to the bandwidth issue of speed, I am becoming more and more convinced that we in the insurance industry are going to use the Internet more than ever before as the bandwidth speeds increase.  What is bandwidth?  Well it isn’t the size Stetson that you wear; it is the speed at which you transfer data across the Internet. 

Before the introduction of the World Wide Web, various standards and types of software existed for transmitting data over the Internet. Many of these are still in use, with Telnet, File Transfer Protocol (FTP), and Gopher among the most popular. Telnet allows an Internet user to connect to a distant computer and use that computer as if he or she were using it directly. FTP is a method of moving files from one computer to another over the Internet, even if each computer has a different operating system or storage format. Gopher is an improvement on FTP, making it easier to list and retrieve files remotely. While these transmission protocols and software are still in use, the WWW is much easier to use and is used much more often than earlier transmission protocols.

Bandwidth is the amount of data that a computer network can transmit.  It is called the bandwidth of the network and is usually measured in Kilobits per second (Kbps) or Megabits per second (Mbps).  A bit—the smallest unit of information that computers can process—can have one of two values, either 0 or 1. A Kilobit is one thousand bits, while a Megabit is one million bits. The transportation of information between routers generally uses communication lines dedicated to this function, with capacities currently ranging from 64 Kbps up to as much as several hundred Mbps, especially with the introduction of cable modems, DSL, and ASDL.

The speed at which information can be transmitted across the Internet depends on the lowest information transporting capacity along the route and the number of people using that route at any given time. A narrow bandwidth somewhere along the route acts as a bottleneck to data transport, and the more people using the line, the less information each of them can transport at any one time.

The Internet is an extension of a computer network originally formed in the United States during the 1960s by the Advanced Research Projects Agency (ARPA). Working under contract to the U.S. Department of Defense, ARPA initially connected computers at the Stanford Research Institute in California, the University of California at Los Angeles (UCLA), the University of California at Santa Barbara (UCSB), and the University of Utah. This original network, the very first computer network, was called ARPANET (ARPA NETwork).  Scientists built ARPANET with the intention of creating a network that would still be able to function efficiently if part of the network was damaged. This concept was important to military organizations, which were studying ways to maintain a working communications network in the event of nuclear war.

As ARPANET grew in the 1970s, with more and more universities and institutions connecting to it, users found it necessary to establish standards for the way that data was transmitted over the network.  To meet the needs of data transmission standards, computer scientists developed the Transmission Control Protocol (TCP) and the Internet Protocol (IP). During the 1970s various government, scientific, and academic groups developed their own networks. Examples include the Department of Energy’s (DOE) Magnetic Fusion Energy Network (MFENet), the High Energy Physics NETwork (HEPNET), and the National Science Foundation NETwork (NSFNET).

In 1989 English computer scientist Timothy Berners-Lee (not Al Gore) introduced the World Wide Web. Berners-Lee initially designed the WWW to aid communication between physicists who were working in different parts of the world for the European Laboratory for Particle Physics (CERN). As it grew, however, the WWW revolutionized the use of the Internet. During the early 1990s increasingly large numbers of users who were not part of the scientific or academic communities began to use the Internet, due in large part to the ability of the WWW to easily handle multimedia documents.

The future of the Internet and its continued growth presents major challenges.  It is the difficulty of providing enough bandwidth to sustain the network.  As Internet applications become more sophisticated, and as more people around the world use the Internet, the amount of information transmitted across the Internet will demand very high bandwidth connections. While many communications companies are attempting to develop higher bandwidth technologies, it is not known whether the technology will be able to satisfactorily keep up with demand.  Commercial use of the Internet is sure to grow dramatically as more individuals gain access to it.  It may be possible in the future to order nearly any goods from Internet sites and have them delivered using the postal service.

Many companies are worried about security issues and the possibility of losing money through Internet commerce.  They are being very cautious about doing business on the Internet.  Other businesses, however, are embracing the Internet, hoping to be first in what may be a rapidly expanding market.

The issue of business being conducted over the Internet raises important security issues.  Companies doing business over the Internet must have very sophisticated security measures in place so that information such as credit card, bank account, and social security numbers cannot be accessed by unauthorized users.  Similarly, government facilities, universities, and institutions must ensure that access to their computers over the Internet is strictly regulated.

The insurance industry was slow in fully adopting Internet usage.  Now that trend is being reversed by bandwidth.  Insurance agencies that started out in the early 90’s with 1200 - 2400-baud modems, many times on loan from the insurance company that needed them to have the capability to connect and upload applications and payments.  As the download process began to evolve the trend for more and more bandwidth speed increased. 

I remember in 1995 being connected at ISDN (another buzz word), which stands for integrated services digital network and I thought I was flying.  Only to return to a home computer at 33.3 baud rate was intolerable or so it seemed to me.  Then the upgrade at home to the 56K telephone line modem, which was better and the closer you are physically located to the Bell system CO (central office) the more speed you got.  Then we all started to realize that the slow up at times was not our connection as much as our ISP (Internet service provider).  Then I started to see offices connecting with T-1 (buzz word for frame relay from Ma Bell) and DSL speeds of 1.5 mbps (megabits per second) and I was blown away.  Now just this week, cable just became available in my neighborhood and I was the first to get it.  Look out world, I got bandwidth (a big pipe) and now I am zooming.

But how does all this affect you, the insurance agent?  As bandwidth increases in speed and becomes more cost effective, your productivity with automation will increase.

I see more and more agencies combining their resources and offices whether through purchases or franchises or associations to operate at maximum speeds and obtain results through cost effective methods.  I get the same question at least once a week, “what is the best way for our agency to do central processing and connect up all our offices?”  I have answered that question so many times that I all most have it down to a script.  With the maturity of Microsoft products like the Citrix WinFrame client and Terminal Server, the use of the thin client (another buzz word) of several users at remote locations all accessing the same PC based server (not main frame) over phone lines using ISDN or above connections, it has become affordable for most multiple office agencies to be connected and perform central processing.

The next step in the evolution of the insurance industry’s use of the Internet will be the biggest step ever.  I am talking about the storage of all the agency's programs and data on the Internet.  That is harder for agents to swallow than the paperless office that we have discussed so very often in the past 7 years.  But get ready folks; it is coming soon to your insurance agency.

No longer will you have to have the expense of larger than life PC storage on premises.  No longer will you have to wait for “Ma Bell” to show up to set up your connections to your offices and try to keep the lines up between offices, whether it is ISDN or DSL or dedicated lines.  The ASP (buzz word for Application Service Provider) will be coming faster than you think.  This is where your agency comparative rating software, agency management software, bookkeeping software, and word processing programs will be stored and accessed from any location.  The cost effectiveness can be compared to the 60’s when Ross Perot introduced us to computer time-sharing.  The overall cost will be a small percentage of the $10,000.00 average cost per office of the thin client mentioned above.

The Bottom Line for the insurance agency is they now will have the ability to purchase offices, open offices, set up at remote locations like a credit union or car dealership tent sale, etc with only a laptop that has the ability to connect to the internet.

Doctors, hospitals and lawyers are doing it now.  They see the benefit and the cost effectiveness of the ASP.  The concerns about security and firewall protection will dissolve with the proof of effectiveness of the service provider.  The ability to have the redundancy of a second mirrored server at completely different locale than the first server will be invaluable in case of natural disasters and catastrophe events.

So get ready insurance world it is only right around the corner.  Get your copy of Dr. Spencer Johnson’s book, “who moved my cheese.”  Your cheese is about to be moved again.

Remember, "Automation equals Productivity and Profitability."

Ron Webber

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