Mobile access will dominate the Web, and it will do so soon. Ina late 2009 report, Morgan Stanley predicted that over the nextfive years, people will access the Web via mobile more than twiceas much as they do via desktop devices. Gartner released its ownprojection in early 2010 that in just three years the number ofsmartphones and Web-enabled mobile devices will outnumber PCsworldwide.

The message is clear: insurers need to consider how to best meetthe needs of the mobile-equipped consumer in their business andtechnology strategy. “We've seen the same progression of the mobileWeb that we did with the 'regular' Web,” says Chad Hersh, principalin Novarica's insurance practice. “Insurers started withbrochureware, rolling out some glossary resources, wikis, and othernon-transactional features.”

But merely having a presence in the mobile world doesn't give aninsurer staying power with consumers. “Insurers will do well toposition their mobile technology solutions as ultra practical andbe wary of attempting to position their solutions as a form ofentertainment without having a sound marketing strategy toaccompany it,” says Joel Ohman, certified financial planner andfounder of several consumer-focused financial services Websites.

“The focus for insurance companies should be on making life easier for the customer and the potential customerrather than the social media aspect of many new technologies,” headds. “As an insurance shopper I would love it if I could press afew buttons and view instant quotes online, but do I really careabout following the Twitter feed of an insurance company on myphone? Probably not.”

Hersh predicts there will be a quick evolution from the fluff tothe functional. “Although we've seen an explosion in apps, we willsee a pull back on apps that don't do much. Carriers realizequickly that mobile apps need to be meaningful, useful things,otherwise people will delete them,” he explains.

Determining the Need

“Customers expect real-time everything, and as devices evolve wehave to meet as many of their expectations as possible,” says JohnElcock, CIO, Unitrin Direct. The challenge is that thoseexpectations change constantly due to the evolution of devicefunctionality and the influence of other industries, includingfinancial services.

“Since I can now instantly set an application to tell me thefive-day weather forecast in any area of the country where myextended family may be located, or allow me to check my stock valueat any given moment, I will want the same status inquiry regardingan automobile insurance claim,” says Ed Higgins, member of theIndependent Insurance Agents and Brokers of New York.

“As we've rolled out our mobile site, we've found the fact thatother financial services are further ahead than health insurancehas elevated the expectations they have from us,” says AdrianaMurillo, director of strategic development at Blue Cross BlueShield of Florida (BCBSFL), which launched its mobile Web site inJuly 2010.

To determine the functionality to target on its mobile site,BCBSFL surveyed 700 members and 700 nonmembers about how they usemobile devices. That led to a decision to offer a mobile Web sitewith features and functionality for both constituencies, nativemobile applications, and an opt-in text messaging program foralerts and cost-saving tips. “We found that 66 percent of peopletext and at least 30 percent use Web data services, and that wasacross multiple demographics,” Murillo says.

Humana, which offers a mobile Web site and apps for the iPhoneand Android platforms, conducted focus groups and in-personinterviews of members and prospects. The company also evaluated thetypes of calls that came into its customer service center and themost-used self-service components of its existing Web site toprioritize the functionality built into its mobile device support.However, insurers need to balance the desire to meet the broadestrange of customers' expectations with privacy concerns that don'tapply to apps designed to check the weekend weather.

“We have to look at the platforms and determine what we can andcannot share given HIPAA,” says Julie Kling, Humana's mobileexecutive business lead. “We have to look at privacy,personalization, and we have to make sure that we can change ourmobile delivery as platforms change and device market sharechanges.”

Meeting the Need

The common mobile deployment paradigm is to launch a mobile Website first, then iPhone and Android apps, followed by apps forother platforms. Apps offer insurers and customers the potentialfor greater integration with, and use of, device levelcapabilities, such as cameras and GPS-based location sensing.

In P&C, the focus of mobile has been in personal lines.“Personal lines is transactional, and the mobile device owner isalso the policyholder. You get billed every month or six months.And if you have a claim, you have day-to-day interaction with yourinsurer,” says Hersh.

State Farm rolled out its Pocket Agent app in part because “thewriting was on the wall,” according to Matt Edwards of State Farm'spublic affairs. “That's where the business needs to be–it's anotherway that customers want to engage with us.”

State Farm utilized its existing strategic resources departmentto conduct the customer research that led to the launch of PocketAgent in June 2009 for iPhone, later expanding to the Androidplatform. “When Pocket Agent was launched, it was 1.0,” says EliWinn, manager in enterprise Internet solutions. “The goal was touse existing backend systems, port them to a mobile platform, getfeedback from customers, and enhance from there.”

Initial Pocket Agent functionality included reporting claims,locating repair facilities, and contacting State Farm agents. InAugust 2010, the company rolled out a widget for Android phonescalled On the Move, which consumers can configure to respond toincoming text messages automatically while they are driving oroccupied. State Farm also offers its Steer Clear application viamobile, which policyholders can use to qualify for discounts onauto policies, and a FastEstimate mobile Web function for autopolicies.

Knowing that customers wanted additional transactionalcapability and with the experience of its banking operations todraw from, State Farm has continued to expand the Pocket Agent app.By press time, the company plans to have expanded On the SpotDeposit, a remote deposit capture feature, to both iPhone andAndroid, allowing State Farm Bank customers to take a photograph ofchecks and upload them for either premium payment or bankdeposits.

State Farm does most of the mobile app development workin-house, relying on a few vendor partners for customer experienceand user interface design. “Most of the
functionality that we're trying to enable on mobile involvesexposing existing services. We are writing new services for theremote deposit capture and other bank transactions,” explains MattGlan, systems manager.

As of October 2010, State Farm had processed over 16,000 “fastestimates” via mobile, but there is no mechanism to track whetherthose estimates turn into issued policies. Also as of October,about 3,000 automatic text responses had been sent using the On theMove widget.

Unitrin Direct's decision to invest in solutions aimed to themobile-equipped customer is based on its business model. “We are adirect writer, and our customers are Web-savvy,” says Elcock.“Mobile is an imperative for us–it's the price of doingbusiness.”

The company also believed it was important to have a device-sideapplication. “With an app, there are location services on the phonethat we can take advantage of, as well as the ability to takepictures of an accident scene and upload it more easily,” saysElcock.

Unitrin Direct considered building its apps from scratch, butultimately chose the DecisionMaker Mobile smartphone platform fromDecision Research Corporation (DRC). “After we had started our owninternal [mobile app] development, we found that DRC was doing itsown development and taking a similar approach. For costeffectiveness, time-to-market, and speed of deployment it made alot of sense to choose DRC's smartphone platform,” says Elcock.

DRC's SDK allows Unitrin Direct to take a common set offunctions and customize the app's look and feel. The insurer plansto have the mobile app available in the fourth quarter of thisyear.

Whereas the focus in personal lines P&C has been ontransactions, the emphasis in health insurance has been to putactionable information in the hands of members at the point ofservice to make decisions.

“Consumers can benefit from information on their plan details,how close they are to meeting deductibles, what their copays are,or even comparative pricing of services,” Hersh says.

“We know that the mobile channel presents a big opportunity toreach consumers in a timely manner,” says Murillo of BCBSFL. “Whenyou're on the go in the health space, there is a 'moment of truth.'You're in the doctor's office and you have health information needswe can help you with. If we engage with you at that moment, we havea better chance to retain you and make you a satisfiedcustomer.”

“When we asked consumers what their challenges in heathcarewere, they were anxious about the cost. And where they get anxiousis often at the provider's office or the pharmacy. People want amobile solution that provides answers, they want it to be simple touse, and they want it to be personal,” says Humana's Kling.

“There are many point-of-care questions,” Kling adds. “Memberswant to look at their health savings account to determine if theycan pay for that care. Or they may need to know the closest urgentcare facility. Or they may be with a provider and the generalpractitioner is about to send them to a specialist and they maywant to find one in their network.”

Humana's customer research led to the development of a suite ofmobile resources utilizing SMS and mobile Web as well as iPhone,Android, and Blackberry applications to help members accesscritical information on the go, including doctor and hospitalinformation and guidance to the location using the phone's existingGPS and location awareness. Members can also instantly access theirclaims history and review current claims status, generate virtualID cards, or generate a fax of ID cards to the provider via thephone.

Text-messaging services allow members to track health savingsaccount balances, transactions and qualifying expenses. Members canalso opt in to receive text-message health and wellness alerts,such as flu-shot reminders. “The percent of members using textmessaging is much higher than those using mobile Webfunctionality,” Kling says.

Humana has been able to leverage internal knowledge and internalresources for the bulk of mobile Web and mobile app development,bringing in new vendors for a few key functions such as SMSaggregation. Kling says that Humana has “learned a lot” inaddressing challenges in the development process.

“Our mobile functionality utilizes our current back-endsystems,” she says. “In some cases, we had low-hanging fruit thatjust needed a lightweight, service-level connectivity added. Butwe've also come across functions that we wanted to mobilize thatneeded some back-end modernization to address, and we've providedfunding to those internal areas to update their services in orderto deliver it.”

BCBSFL also believed that a member's greatest need for mobilefunctionality happens in the doctor's office. “When you're at thepoint of care, you need to understand your benefits anddeductibles. So we wanted to provide a simple, visual snapshot ofthose benefits. With the same login and password users have attheir desktops, they can get a mobile optimized version,” Murillosays.

The insurer also included health savings account inquiries inthe initial launch of the mobile site, and provided functions thatcapitalize on the capabilities of most mobile Web devices.

“If you walk out of your doctor's office with a prescription,there is a tool based on the phone's GPS technology that integratesyour current location information with a pharmacy directory andalso includes the latest price on medications in our database,”Murillo says. “We also provide options to save money, such asgeneric alternatives, that you can use to talk with yourdoctor.”

The BCBSFL site also provides click-to-call functionality fornetwork providers and offers opt-in SMS reminders. By press time,the company had planned to build in a healthcare reform section tohelp users navigate changes that impact their coverage.

“At the core of our features and decisions on features is afocus on simple, easy access to relevant health info when you're onthe go,” Murillo says. “Our goal is to be a trusted advisor.”

BCBSFL did the mobile Web development using its internal Webteam, retaining some third-party expertise on user experiencedesign. “We spent a lot of time on the user experience to ensurethat we didn't simply replicate the Web, but that we optimized itfor each device,” Murillo says.

The company's next step is to launch apps for iPhone and Androiddevices, scheduled for the first quarter of 2011, that willincorporate the functionality of the mobile Web site and leverageadditional device-level functionality.

Assessing the Results

Even though supporting the mobile-equipped customer isincreasingly important, making the necessary investments intechnology is not without its obstacles–even for a direct writer.“Internally, the challenge is funding [of mobile Webfunctionality], and keeping the internal focus on it,” says UnitrinDirect's Elcock. “In today's economy, everyone is trying to do morewith less, and projects like this compete with otherrevenue-generating priorities.”

“If you look at mobile as a revenue-enhancing opportunity, youmiss the point. You should view it as an opportunity to betterserve agents and customers at a lower cost. That's the real value,”argues Hersh.

“By and large if you try and do an ROI on a mobile app it'sgoing to be tough,” Hersh adds. “You have no idea what the adoptionwill be or how it will compare to another e-channel like the Web.Also, you can't factor in a lot of the costs of the mobile channelbecause those are costs you should already be incurring or using,such as having a mobile app call the policy or claims admin systemas a service.”

“Our approach is keep our investment in mobile small andrelevant, and to stay current as much as possible to what's goingon with mobile so we can evolve gradually, rather than invest somuch that you become concerned with generating a ROI. The decisionsyou make today may not be relevant a year from now, or even sixmonths from now, so you need to target quick deliverables,” Murillosays.

BCBSFL reports that its online quote tool has generated salesleads from its mobile site, but these leads are a secondary goal tothe objective of member engagement. “We have good traffic and it'spicking up each month,” Murillo says, stating only that the numberof visitors to the site has been “large.”

“We haven't been asked to have targets for the metrics aroundmobile Web and app results,” says Kling. “We've had thousands ofiPhone and Android app downloads, thousands signed up for textmessaging around spending account balances and health wellnessreminders, and tens of thousands of people accessing the mobileWeb.”

“We think value and convenience does translate into customerloyalty and profitability, but we don't have any set expectationsaround how people will embrace these tools,” says Elcock. “In time,we will hopefully tease out the value, and if there is any way wecan demonstrate the value after it is launched, it will help us inour funding and focus on mobile.”

“The beauty of pushing more functionality to the consumer side,such as claims reporting, is that consumers can do a lot of thework for carriers, such as taking photos at the scene,” Hershobserves. “When customers are reducing work on your end and feelthey're getting better service at the same time, that's awin-win.”

Keeping Pace

At the same time mobile access is increasing, the number andtype of mobile devices is multiplying. “iPads, Blackberry andAndroid tablets, and other Internet-enabled mobile devices areblazing a new trail,” Hersh says. “Customers and agents are bothgoing to be more comfortable sharing illustrations and enteringapplication data on those devices than they are on smaller smartphones.”

The challenge of keeping pace with the mobile-equipped customeris simply the pace of change. “For the first time, insurers will nolonger dictate the speed to market with which applications aredeveloped. Instead, the end user will dictate acceptablespeed-to-market and demonstrate that point by migrating toinsurance companies or agents who can provide these mobile deviceservices,” predicts Higgins.

“The demand from business partners for the foreseeable futurewill far outweigh the capacity to develop it,” says State Farm'sMatt Glan. “We're trying to keep up, but it feels like there isalways going to be more work than people to do [the work].”

Devices are going to keep evolving, and customers' expectationsare going to keep changing as a result. Mobile may well becometable stakes, particularly for serving a new generation ofcustomers. But the good news for insurers is that, at least fornow, it is sufficient to be a fast follower.

“Carriers should closely watch the consumer market to see whatthey should be focused on, particularly where the device marketshifts dramatically,” Hersh maintains. “Compared to banking andtravel, the demand for mobile apps isn't yet as robust ininsurance, so we can afford to be a little behind the curve, butnot much. If they leave the door open too far, someone else willstep through it.” TD