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Mobile Channel Strategy Influences Insurance Buyers

Chad Mitchell
Insurance Experts' Forum, October 7, 2009

Smart phone adoption among U.S. insurance customers is growing, and customers are beginning to engage insurers via the mobile Web for policy administration, claims and bill pay. eBusiness and emerging channel strategy executives at U.S. insurers such as Nationwide, USAA, American Family, Progressive and State Farm are evaluating, developing and implementing mobile channel strategies. There are many opportunities for insurance eBusiness and channel strategy executives to use the mobile channel as part of a broader multichannel distribution strategy.

What’s Happening With Your Customers?

Forrester’s data shows a strong and growing segment of mobile consumers who are likely the next generation of long-term, profitable customers for most multi-line insurers. We found that:

•    Smart phones are not just for kids. Age is not a major indicator of smartphone adoption among U.S. insurance customers. One out of 10 Gen Y and Gen X U.S. insurance customers has a smart phone. But Boomers are not far behind, with nearly the same smart phone penetration. Seniors are the only U.S. insurance consumer segment that does not approach 10% smart phone penetration.

•    U.S. insurance customers are sophisticated mobile users. More than one in two U.S. insurance customers are sophisticated mobile users. These highly connected consumers use their mobile phones as communication devices, but also consume media, get information and shop on them. They access the mobile Internet at least weekly on their mobile phones, and they also frequently research products, check stock quotes, check financial accounts or read news.

•    One in 10 Gen Y customers go mobile with their insurer. Younger customers show the greatest engagement through mobile devices. One in 10 online Gen Y insurance owners connected with their insurer through their mobile device in the past year using either a mobile browser, mobile application or SMS/text message.

The Audience Is Growing, But What Are The Problems Facing Insurers?

The picture is not completely rosy for mobile channel managers at U.S. insurers. Although usage and functionality is improving, a few problems still remain, including:

•    Mobile functionality is beginning to influence insurance shopping decisions. When we asked U.S. online adults who had bought insurance in the past year what factors had affected their choice of provider, one out of five stated that the firm or agent offering the ability to check policy information or pay bills using a mobile phone influenced their decision.

•    Insurance mobile channel experiences need improvement. Only one third of online insurance owners who have used the mobile channel in the past year were satisfied with their mobile experience, with little difference in satisfaction between those who used SMS/text, mobile applications or a mobile Web browser. Customers were more satisfied with every other channel.

So What’s Next?

U.S. insurance eBusiness and mobile channel managers will continue investing in their mobile channel strategies to attract younger customers, lower costs and improve multichannel experiences. Here are a few things to consider:

•    Why are customers accessing your mobile site? Ask that question, and survey customers to understand why they use the mobile channel. New York Life found that customers simply wanted to use the mobile channel to connect with their agent. Customers were not trying to get quotes for life insurance through their iPhone—that was a smart use of customer insight in developing a channel strategy.

•    Create consistent experiences. There are several firms such as Usablenet mobile that help insurers, and other firms, optimize their mobile customer experiences. Select a vendor with capabilities and experience in your category (e.g. insurance), and with extensive testing capabilities across all mobile platforms including the iPhone, Blackberry and Google’s Android. Ensure that the mobile user interface design follows the same heuristic feel of your corporate or branded Web sites.

•    Don’t forget about your agents. Many insurers exclude their in-person distribution forces when developing mobile channel strategies. Insurers such as Allstate are empowering agents through mobile device functionality. For example, a local agent may receive a lead form generated from their Web site. The carrier sends the contact information and lead form directly to the agent’s mobile phone. The agent then has the opportunity to connect with a “hot shopper” during that prime shopping window. Agents extend their business hours by improving 24/7 accessibility, and customers get more attentive and responsive agents.

I look forward to hearing more successful implementations of mobile strategy as insurers catch up with the iPhone crowd. Please share them with us if you know of any successful cases studies.

Do you agree or disagree?

Chad Mitchell is a senior analyst with Forrester Research. He covers mobile and social media strategies in insurance, acquisition, cross-sell and retention marketing strategies, comparative raters, online guided selling tools, emerging Web and call center technologies for sales and service, agent portals for marketing and underwriting, and the best practices of leading multichannel firms. Aditionally, he advises leading insurers on best practices for public and secure insurance Web sites—analyzing functionality for quoting, policy administration and claims.

The opinions posted in this blog do not necessarily reflect those of Insurance Networking News or SourceMedia.

Comments (4)

I only partly agree with this article. The mobile applications of insurance companies are in a divergent part of hype cycle now as many smart phone application are. The euphoria will dwindle down and definitely the market will mature towards matching the real needs & wants of the customers rather than image build endeavour, which is going on now.

One of the many practical examples I could see in US geography is that most of the American population drive to work, during which they will not shop for insurance (even texting while driving is not allowed in many of the States) and when at office or home, people prefer to use PC or Laptop to shop online. On claims side, I believe that someone met with an accident would psycologically prefer to talk to customer service or claims service center or agent rather than filing FNOL application over Smart Phone.

So, the market for these applications, which the insuranc companies are providing are usefuly only those who commute by public transport and some real tech savvy population, which is very narrow when compared to the overall insurable or insured population.

Alternatively, I believe that the insurance companies should provide mobile tools and smart phone apps to agents, distrubution channels, claims handlers and service representatives to enable better customer service on the go.

Regards,
Sathya
847-420-7789

Posted by: SATHYANARAYANAN S | January 28, 2010 11:56 AM

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Thanks - here's the survey data.

North American Consumer Technographics
Date of survey: September 2009
Region: United States
Number of respondents: 4,814

Forrester conducted an online survey fielded in August 2009 of 4,814 US individuals ages 18 to 88. For results based on a randomly chosen sample of this size (N

Posted by: Chad M | October 21, 2009 3:21 PM

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Would be very interested in the sample size of the survey please.

Very interesting, maybe 2010 is finally the "year of mobile" ;o) Creating consistent experiences across different devices is the main challenge because there is no single standard for developing mobile apps. However maybe thsi challenge will be greatly reduced by the likes of http://rhomobile.com/

I believe screen estate is still a challenge for useful applications in the insurance sector, but this will be overcome with advances in rollable screen technology.

The following video was shown in 1999, and serves as a reminder that sometimes mass takeup of technology is sometimes a lot slower than the tec industry would like:
http://www.youtube.com/watch?v

Posted by: Dharmesh Mistry | October 10, 2009 3:25 PM

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Great article. Finally, mobile usage data for the Insurance industry! Thank you!

Posted by: InsGirl | October 9, 2009 1:46 PM

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