Professors' Points

Ready or Not, Mobile Apps the Norm

Frank Heaps
Insurance Experts' Forum, December 2, 2010

Much has been written about mobile apps in the insurance space lately, and it may be reaching the same amount of hype that the Internet did in the late 1990s.

Back then, the Internet was uncharted territory where technology was being developed just to be able to use this new communications tool. Browsers were raw, connections were slow, connectivity was unreliable, etc. We all remember the excitement and lived through the reality. Insurance carriers took a very conservative approach to adoption of this new way to interact with customers. Part of it was the change to the expected and traditional model of customer relationships; agents and direct sales/support to a lesser degree.

Carriers passionately defended the right of the consumer to call someone for support of the complexities of basic insurance. The means to provide simple policy communications had not been developed yet, and no one wanted to jump out in front with a poor “Internet” distribution channel. The other valid and critical concern was security. Access to information, transmitting information and moving money around over the Web necessitated a cautious embracement of this new communication method. We have all seen where we are now with routine account maintenance, quoting, policy issuance, claims reporting and bill payment as just another method to interact with customers.

Jump back to today—we see the same excitement for the delivery of mobile insurance apps. Leading insurance technology analysts and media groups such as Gartner (Top 10 Strategic Technologies for 2010), INN (More Workers Using Mobile Devices —10/24/2010), and Celent (A Look at Mobile Apps Aimed at Insurance Consumers — November 2010) have all started studying and reporting on this trend. The difference this time around is the mobile platform is not emerging—it’s fairly mature. Cell phones preceded the Internet for development followed by smartphones and handheld devices over the past several years. The challenges of reliability, security, speed and coverage have largely been addressed. We know that security remains an issue and is at the forefront of application development tools.

As time passes the devices continue to get cheaper and carriers lower the costs of their data plans to gain market share thereby allowing more consumers to have access to information. The UI’s are small compared to a PC and the graphics are simple, but that doesn’t deter the demand. Users want the simplicity of being able to click a button to inquire about a bill or installing a claims app for loss reporting. In fact, using these devices creates a sense of novelty about the entire insurance process. Could mobile apps be making insurance fun and friendly for the consumer?

Frank Heaps is the managing director for Innovation in Insurance (i3), and is an adjunct professor of insurance at the Moore School of Business, University of South Carolina.

Readers are encouraged to respond to Frank using the “Add Your Comments” box below. 

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Comments (5)

Thanks everyone for the comments. Yes, the P&C industry is very traditional and has been slow to adopt. I know many carriers are eager to do something but they are unsure of what to do. Other are jumping in because they realize that the jumbo carriers are making a move and will adjust their strategy according to demand, emerging requirements, and customer needs. It is going to be interesting to watch how carriers adapt in 2011.

Posted by: Frank H | December 7, 2010 2:17 PM

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I fully endorse your viewpoint Frank. It could be a strong statement but I see mobiles converging into a source of entertainment, Information, D2D operational and e-governance transactions like banking, stock markets etc. and personal and office communication. We should also not forget that mobiles always have connectivity and would have almost 24X7 stay along the person as part of his personal accessories. One may not be connected or carry laptop, but mobile travels along the human being.

Posted by: Rakesh s | December 7, 2010 1:39 AM

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It is true that this is a harsh reality and consumer is king. For the insurance companies the choices are few- people have less time for ambiguity, complex forms and choices. You need to be where the consumer is. Really appreciate this effort. Unfortunately, we as the insurance community like operating behind close walls!!

Posted by: kailas d | December 3, 2010 10:21 AM

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Thanks for this. When I talk mobility and apps at my office, people look at me like I've grown a second head. Anything I can bring with me to help make my case is appreciated.

It's a shame that our industry is so slow to move. No wonder the younger generation thinks of us as stodgy. I still get frowns when I use my iPhone to take notes during a meeting. Sigh... such a long way to go...

Posted by: Adrienne P | December 3, 2010 9:59 AM

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What interests me in the hype around mobile in the USA for insurance is why? Why will it be big in insurance, when consumer adoption of web based personal lines products has been far from spectacular in the USA, but pretty much the main channel in the UK?

What will mobile do for point of sale that the web through PC's was poor at in the USA?

Posted by: Dharmesh Mistry | December 3, 2010 9:58 AM

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