May 15, 2015
Maturing Use of Mobile in Insurance
Mobile is now widely use to interact with customers on personal lines and to help with loss and risk management in commercial lines.
“Can you hear me now?” The use of mobile technology is indeed maturing in the insurance industry!
Recent SMA research shows that, over the last year, insurers have increasingly invested in developing digital strategies. Most intend to migrate, over time, to a comprehensive digital insurer approach. Some others pick a specific area to work on, such as mobile agent/broker support or self-servicing capabilities for policyholders. Although both approaches are perfectly justifiable, we strongly recommend to tie all digital and mobile initiatives together under a “digital insurer” strategy. This approach will ensure consistency between business functions, market segments and customer experiences – and it is the approach that will help prioritize investments.
A big part of a digital strategy is a plan for implementing mobile technology. Most phones are not being used primarily to make calls anymore. (When I was overseas last week, and my phone didn’t work, I experienced first-handed how much we all rely on our smart phones for information and transactions, restaurant and hotel bookings, travel info, weather, banking and shopping.) Today, people expect to be able to transact on their mobile device as if it is a desktop or laptop. So how is our industry responding to these expectations?
Especially in the direct writing, personal lines space, mobile has become a mature and widely implemented technology. Direct writers support pretty much all informational and transactional interactions with their policyholders via mobile devices. In the last year or two, we have also seen carriers with agent/broker distribution channels invest heavily in mobile services. This investment tends to be triggered by one or more of three drivers: cost savings because of self-servicing; distribution channel experience (ease of doing business) and expectations; or competitive pressure. Almost all of these carriers start their mobile implementations with purely informational capabilities, followed by enabling transactions. In addition, some of the multi-channel carriers are now starting to expand their mobile capabilities beyond the distribution channels into the policyholder relations, carefully balancing what to communicate directly to policyholders and how to continue to fully engage the agent/broker.
On the commercial side of the business, we have seen a slightly different approach to mobile enablement. Carriers first built mobile capabilities around loss or risk management functions, including information on replacements materials and costs, uploading pictures of damaged assets, providing tools for risk assessments or location-specific information. In most cases, these capabilities were first rolled out to distributors; now we see some carriers that also offer them to their policyholders. Especially in the commercial segment, however, insurers are very cautious about reaching out directly to policyholders, and almost all communication is a three-way process among carrier, agent/broker and policyholder.
As both our research and our interactions with specific insurers have shown, mobile strategy and implementation have matured rapidly. Our industry is definitely past the “can you hear me now” days. The next focus area will be how to integrate mobile into a true digital strategy and how to capitalize on the information we are starting to gather on our policyholders and partners. That is the point where all investments made will truly start paying off.