Filed Under:Carrier Innovations, Information Security

Creating an Aura for Insurers With Mobile Technology

Many of us are still wired to the office, tied down to the trusty PC. But the number of business users on the go—not to mention consumers who stay connected 24/7 via their smartphone—isn’t likely to go down ever again.

Those mobile technology users enjoyed their experience on the PC or with their laptop and they want it replicated with their smartphone or tablet device.

(For a look at some interestuing statistics on mobile technology, check this slideshow.)

Vijay Gopal, vice president and enterprise chief architect at Nationwide Insurance, believes the number of smartphone users will keep increasing, particularly as the user experience keeps improving. He points out that as little as four years ago touch screens on smartphones were not prevalent.

“Really quickly, touch expanded the options of what you could do with a really small, compact device,” he says.

Chad Hersh, a partner in the insurance practice at Novarica, believes mobile technology is a significant growth area for insurers and compares it to the online channel of just five years ago.

“Today those online numbers are huge,” he says. “If you look at email usage from 10 years ago, the number was very low; today it’s very high. There are some great opportunities for insurers to save money because in the next generation mobile technology is how consumers are going to want to do business. Their smartphone will be their primary means for getting online.”

Hersh thinks that within two to three years the number of smartphone users compared to those who use older style cellphones will be reversed.

“If you look at the rate smartphones are being adopted, smartphones now account for greater than 50 percent of all phones being sold,” he says.


Insurers like technology that is mature and secure, points out Mark Breading, a partner with Strategy Meets Action (SMA), which explains why technology adoption for insurance remains behind the curve relative to other industries.

“I would characterize P&C as beyond the experimentation stage,” he says. “There are some significant apps available for policy services and claims. There also are small apps like agent locaters. Insurers are looking at apps for adjusters, agents, loss-control specialists, and field underwriters.”

Carriers shouldn’t be deterred from investing in mobile even though the current numbers on the consumer side are low. Hersh suggests those numbers are reflected by the lack of options the carriers are offering consumers and business users rather than the lack of willingness among those segments to use mobile solution.

“It’s hard for consumers to do business with carriers [in a mobile environment] when the carriers don’t allow them to do anything,” says Hersh. “Be careful what conclusions you draw about mobile usage. What is driving adoption by carriers is the vast demand of this newest generation of policyholders. What is going to drive adoption by policyholders is simply the availability of the app.”

Hersh also points to what is being done in mobile banking.

“People said there was no way consumers would want to pay bills on their smartphone,” he says. “That was reasonable to assume when smartphones weren’t very smart and connections were like dial-up. But now, if you have a 4G phone, there’s a chance your connection on your phone is faster than your connection at home. The screens have tremendous resolution. You can pinch and zoom. The experience is much better than it was even a year and a half ago. On top of that, people are using tablets now. Mobile banking on a tablet is a delightful experience.”


When Nationwide developed the first insurance app for the iPhone, the carrier realized there was still more work to be done to get apps to multiple mobile devices because at the time the iPhone had only a 17 to 18 percent market share, points out Gopal.

“Android wasn’t even in the market,” he says. “But within seven months, Android came in and skyrocketed in market share. We quickly developed the same application for iPhone and got it out to Android devices.”

Gopal admits Nationwide was struggling with how to deal with so many players entering the mobile market. The carrier found itself in the position of having to develop a new app for each operating system.

“Because of the variety we felt we would be better served to support a variety of devices,” says Gopal.

Fortunately, the market itself solved that problem.

“Two platforms established a dominance and grabbed 80 to 85 percent of the market share—Apple and Android devices,” pointed out Gopal. “We now have a good strategy for developing applications and rolling them out to both the Apple and Android devices.”

Nationwide’s mobile application strategy will hinge on an architecture that will provide the same experience for customers no matter which device they run on, according to Gopal.

“We think the Web-browsing experience is evolving and adds to the fact that one of the most dominant platforms on mobile didn’t exist a few years ago,” he says. “The Web-browsing standard is a fairly good bet. If you leverage the mobile apps we are going to be able to deal with device compatibility effectively.”


Breading believes there are four constituencies for the mobile market: customers, agents, employees, and business partners.

“There are distinctly different needs for these four groups,” he says.

One of the issues for consumers, particularly those purchasing or using personal lines products, involves the frequency of use.

“Are people going to download apps that they aren’t going to use very often?” asks Breading. “There are a lot of first-notice-of-loss (FNOL) apps out there from the tier-one carriers. Everyone seems to have one, but I look at them and ask: Do I want to download an app on my iPhone or tablet that I may never use and if I do use it, it might be two years down the road and possibly out of date?”

Breading points out insurance is not something consumers use every month, so he feels it is important for insurers to bundle apps that have rich functionalities.

“If you download an insurance app that not only has FNOL, safety tips, taxi/rental for your area, a maintenance log for your car—a whole series of things that have some utility and you are going to use on a regular basis—that makes more sense,” he says.

Insurers can’t afford to look at customer relationships the way other industries look at their own relationships, according to Breading.

“When I say P&C is behind other industries when it comes to consumer-facing apps, it’s not a knock on the industry it’s just recognition of the utility of those apps,” he says. “You might do banking transactions several times a week, but you’re not going to be doing insurance transactions that often.”

Breading does see great potential for mobile apps for business users. Some analysts have pointed out insurance carriers have an aging work force, whether it is agents, adjusters or underwriters, but Breading explains, “I think it’s too simple to say, ‘Let’s not do mobile apps to support our employees because they are older and not going to adopt them.’ That’s not a valid argument.”

There’s resistance by some segments of those populations, but Breading adds there is potential for all of those categories of employees because they are mobile.

“They are out and around, meeting with customers, and in the field,” he says. “Get the technology in their hands so they don’t have to go back to the office or to their cars to hook up their laptops and try to upload something.”

Hersh discusses a personal experience as a consumer and what mobile technology was able to do for him. He was at a car dealer ready to buy a new vehicle. He called his existing carrier and was told his premium was going to double.

“I downloaded an app from another carrier [on his iPad] and got a quote online,” he says.

Hersh learned that the second carrier would insure his new vehicle for half of what his current carrier was asking. He was then able to buy the policy, pull up an insurance card, and show it to the dealer.

“That will make me a loyal customer to my new carrier,” says Hersh.

Most of the direct carriers have a mobile tool such as that, but Hersh believes it’s less prevalent among the agency carriers.

What Nationwide is learning about consumer use of mobile devices is until the Web-browsing experience becomes acceptable, people are only going to the browser to obtain quotes, rather than follow through with the entire transaction process.

“There is an opportunity there,” says Gopal. “But transactions that lend themselves to a self-service function are more successful.”


It’s been a year since Novarica surveyed producers on their use of mobile, but even in late 2010 Hersh saw producers had a feel for mobile platforms: 14 percent were already using iPads; 21 percent using iPhones; 14 percent were using other smartphones, and 43 percent were sporting BlackBerries,

What impresses Hersh is how producers are using the mobile tools.

“A year ago, the use of devices predominantly was for contacts and calendars,” says Hersh. “[Producers] expected the numbers to be flat for application submission, but if you talk with sales and marketing people they expected a huge increase in the use of smartphones and tablets.”

Novarica sees more investment among P&C carriers, with claims adjusters showing dramatic increases for smartphones and tablets as well as significantly greater use around application submission.

“There is a lot of data prefill that goes on in P&C,” says Hersh. “If you fill out an application for a policy from Progressive on a tablet it’s going to fill in almost all of your information for you—based on your name and address—from third-party data sources. There are a lot of opportunities for sales and marketing and for application submission for P&C that will be realized in 2011 and 2012.”


There are three different domains for insurance apps involving privacy and security, explains Breading. There are the basic communications to enable text messaging, email, and voice. There are horizontal apps—things like, mapping, and location apps that are cross-industry. Third are the custom apps.

“When you are talking about basic communications and the horizontal apps, privacy and security don’t enter too much into the discussion because there’s not a lot of sensitive company information available,” says Breading. “Custom apps are where you might have information about a claim or personal information about individuals, but by and large those concerns are being addressed in the marketplace.”

Hersh contends it is more than security and privacy issues that are holding back mobile technology today, but rather a combination of related issues, such as whether to support personally-owned devices or whether companies should only secure their own devices.

“From an economic standpoint, insurers have come to the conclusion that bringing your own device is probably more realistic,” says Hersh. “In the last year or so, a number of solutions have cropped up around how to support the use of company data and the company network on mobile devices that are owned by the employee.”

After undergoing a pilot program, Nationwide recently began supporting personally-owned smartphones. Users have to have their own data plan and their own personal carrier of choice. The carrier also has a tablet pilot going in with the same issue.

“It’s a little more difficult with tablets,” says Gopal. “The security requirements go up a notch or two. We are trying to figure out the right level of device protection we have to put in and the impact of having data available on the devices.”

Nationwide has about 100 tablet users that are participating in the pilot by providing feedback to the carrier.

“We hope to roll out the tablet program to a broader population next year,” says Gopal. “Agent and wholesalers also are part of this pilot project.”

There are different options available to carriers for segregating data on smartphones and keeping it secure.

“Those issues are getting addressed and I think that will help speed adoption,” says Hersh. “That addresses the security issue and at the same time it allows employees to use their own devices, which can be very powerful for the ROI.”


Gopal admits IT spending for mobile technology at Nationwide has gone up in recent years, but adds the growth is not significant when you look at the overall IT budget.

“Throughout the insurance industry, the spending on mobile is dwarfed by regular spending,” he says.

Still, Gopal believes the industry has lots of work to do before mobile can become a significant part of what a carrier does.

“People are realizing as an industry that without a simplified environment we are seriously going to inhibit our ability to offer some of the newer experiences that customers are asking for,” he says.

“You don’t see a lot of budget spent on mobile, but it doesn’t need to be a big part of the budget,” says Hersh. “If you do everything else right, mobile can be an extension of what you are doing.”

Breading is not surprised that most of the interesting apps being used by insurers are found with the tier-one personal-lines carriers. One example of an app that he likes is GoodRide from Allstate, which is for motorcycle enthusiasts.

It’s a set of apps around the things motorcyclists are interested in, like trip planning, logging their trips, motorcycle maintenance, and finding the nearest gas station, explains breading. It also includes the usual Allstate components such as roadside assistance, information on their policy, and the ability to pay a bill.

“It’s an attempt to build segment loyalty,” says Breading. “It’s a targeted segment and Allstate is showing [that segment] they understand their needs.”

USAA has one of the better iPad apps for insurance, according to Breading. The app integrates all the capabilities USAA offers through one screen interface so users can go straight to an auto policy, investments, homeowners, and other various needs.

“It offers a rich set of capabilities built around those product areas,” he says. “It’s a nice model of where things should be heading, especially for companies with broader portfolios.”

Breading sees most of the real activity and innovation happening with the larger, tier-one carriers.

“There are some interesting examples of things going on at smaller companies, but a lot of the tier-three and tier-four carriers, while they would like to do more, are so consumed with budget resources to maintain core systems, business intelligence, and other things that they aren’t doing anything terribly innovative regarding mobile,” he says.

The life and annuity side is in an earlier stage of adoption, points out Breading. He feels there is a third-party market that’s beginning to emerge for consumer apps such as financial calculators, insurance estimators, and needs analysis.

“The products on the life side have investment components to them,” he says. “The illustration area could be the space for a killer app for the life side. John Hancock has a nice illustration app out for tablets. But on the whole, the life side is not quite as far along as P&C. “

Breading maintains consumer demand absolutely will push advances in mobility for insurance carriers.

“There is a phenomenon in the way applications are being conceived and built,” he says. “It’s not necessarily top down—from the corporate world out to the consumer world. That whole model is being flipped because of social media, mobile technology, and the power of the users.” New ideas are coming from user communities and Breading believes changes eventually will filter down to the smaller carriers as well.

“The challenge for smaller insurers is just finding the budgets and the resources to manage those kinds of apps,” he says. “You need people to conceive, design, manage and track these kinds of things.

A good example of a more organic creation of apps was found by Breading at Great American Insurance, a tier two insurer. They have an app for equine insurance and one for truckers.

“Those apps evolved bottom up,” he says. “It wasn’t someone in corporate suggesting they build an app, it really came through the users, and the agent community and they went from there. There will be more and more of that happening.”

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