Two sessions tomorrow will detail successes carriers haveachieved using mobile technology in the U.K., Japan and othermarkets, exploring ways that U.S. insurers can learn from thosesuccesses.

Craig Beattie, an analyst in Celent’s insurance practice, willprovide insights into the U.K. market during his 11 a.m.-12 p.m.session tomorrow, “Can Mobile Technology Fundamentally Change theNorth American Insurance Market?”

In another session session, “Mobile Technologies: Providing aNew Customer Experience,” Tsukasa Makino, ITmanager of Tokio Marine & Nichido Fire Insurance Co. (TMNF),reveals tomorrow from 2:45 p.m.– 3:45 p.m. how his company hasgrown its business in Japan via location-based sales throughGPS-enabled mobile devices.

MOBILE BRITS

Beattie observes that Internet technology has transformed theway consumers buy insurance in the U.K., which has seen anexplosion in mobile-initiated direct sales of personal insurance.That development would seem to hold promise for carriers in theU.S., where 98 percent of Americans have a mobile phone—anever-increasing number of which are smart phones.

However, Beattie points out that the U.S. insurance marketplaceis not the same as in the U.K. “The propensity of customers topurchase straight from an insurer is greater in the U.K. than inthe U.S.,” he says. “The customer base in the U.K. is more educatedin insurance because direct marketing has been the topic of U.K.insurers for many years. There has also been an effort by U.K.insurers to make products simpler, more commoditized and easier tounderstand.”

He also observes that mobile insurance-buying has taken off indeveloping markets faster than it has in the U.S. For instance,Kenya has seen steady growth in micro-insuranceproducts—low-premium, low-limit policies, typically foragricultural losses.

“Kenya has a dispersed population and limited access to bankaccounts compared to other markets, but they still have insuranceneeds—bad weather, equipment breakdown and so on. At the same time,they have a significant insurance-distribution challenge. Mobiledevices, which serve as both a communication tool and a means ofproviding payment, are an ideal solution for that marketplace,”Beattie says.

In the U.S., customers have broad access to agents and carriers,and financial regulation prohibits some of the types of productsavailable in other countries. However, despite these differences,there are lessons U.S. carriers can apply from foreign markets intheir own mobile-technology development, which will be detailed inBeattie’s presentation.

Beattie will also highlight how some insurers are providingvalue-added services to customers via mobile in addition to policyapplication. In contrast, most US insurers have focused primarilyon developing mobile sites or apps targeted to specific insurancefunctions, such as billing or claims. Beattie says Americaninsurers should consider a broader strategy of building customerrelationships through mobile channels.

“A lot of carriers are developing apps that try to get theiricon on customers’ phones but that really don’t deliverfunctionality customers are going to use,” he says. “In the eventof a car crash, inevitably the customer gets out the phone andrings the contact center. The last thing they’re looking at is anapp.”

Instead, carriers should use mobile apps to deploy customerservice and education capabilities. “Mobile technology can be usedfor interactions that help customers become better risks and avoidloss, both of which lead to greater customer satisfaction andhigher retention,” Beattie says. Strategies for accomplishing thatobjective will also be detailed in his presentation.

Service to Sales

Insurers are also exploring mobile as a way to market directlyto customers by fully leveraging the capabilities of wirelessdevices. TMNF’s Tsukasa Makino will reveal how the insurer is usingmobile devices to sell short-term, small-value insurance products,such as travel and golf insurance.

The project is a collaborative effort of TMNF and mobile-phoneprovider NTT DoCoMo. The development arose from a convergence ofevents: Tokio Marine’s market was mature, and the company needednew products and delivery methods; DoCoMo was seeking new servicesto provide its customers; and the Japanese government hadundertaken its “Information Grand Voyage” project, which gathersand analyzes massive amounts of data from both web and real-worldsources—that companies can use to build services.

The TMNF application combines the GPS capabilities of mobilephones with context-aware computing to present customers withoffers to purchase insurance where and when certain products arelikely to be needed. For instance, a customer at a ski resort mightreceive an invitation to purchase sports-injury insurance.Customers on the links are presented with offers for golfinsurance, such as “hole in one” coverage—a valuable commodity in acountry where scoring an ace traditionally obligates the golfer tohost a lavish party for the other members of his group. Thelocational awareness of the application is so precise that it candetermine whether a customer is at the domestic or internationalterminal of the airport and recommend the appropriate insuranceproduct.

With the customer’s agreement, basic information such as name,address and telephone number is retrieved from DoCoMo’s customerdatabase, requiring the additional input of only a few items tocomplete a purchase. Makino says that this simplicity is essentialto success of the mobile app. “If the application requires a lot ofoperations, customers will give up purchasing before they come tothe end,” he explains.

Makino’s presentation will highlight the technical challenges ofthe project and how they were overcome. He will also detail thebusiness benefits TMNF has obtained from the mobile project todate. “We have created a new customer experience where customerscan buy insurance anytime, anywhere with their mobile phones,”Makino says.

Perhaps most important, the project serves as a model of how touse mobile devices to tap new markets. With the Japanese non-lifeinsurance market so mature that conventional growth patterns are nolonger expected, it was essential that TMNF look to nontraditionalmarket channels.

“We have explored a new technology frontier for insurance withcontext-aware computing, and we have created an untoucheddistribution channel and market segment that doesn’t conflict withexisting channels,” Makino explains. “We have also created aprogressive and ‘cool’ company image, especially for tech-savvypeople.”