Two sessions tomorrow will detail successes carriers have achieved using mobile technology in the U.K., Japan and other markets, exploring ways that U.S. insurers can learn from those successes.

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

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

MOBILE BRITS

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

However, Beattie points out that the U.S. insurance marketplace is not the same as in the U.K. “The propensity of customers to purchase straight from an insurer is greater in the U.K. than in the U.S.,” he says. “The customer base in the U.K. is more educated in 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 to understand.”

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

“Kenya has a dispersed population and limited access to bank accounts compared to other markets, but they still have insurance needs—bad weather, equipment breakdown and so on. At the same time, they have a significant insurance-distribution challenge. Mobile devices, which serve as both a communication tool and a means of providing 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 products available in other countries. However, despite these differences, there are lessons U.S. carriers can apply from foreign markets in their own mobile-technology development, which will be detailed in Beattie’s presentation.

Beattie will also highlight how some insurers are providing value-added services to customers via mobile in addition to policy application. In contrast, most US insurers have focused primarily on developing mobile sites or apps targeted to specific insurance functions, such as billing or claims. Beattie says American insurers should consider a broader strategy of building customer relationships through mobile channels.

“A lot of carriers are developing apps that try to get their icon on customers’ phones but that really don’t deliver functionality customers are going to use,” he says. “In the event of a car crash, inevitably the customer gets out the phone and rings the contact center. The last thing they’re looking at is an app.”

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

Service to Sales

Insurers are also exploring mobile as a way to market directly to customers by fully leveraging the capabilities of wireless devices. TMNF’s Tsukasa Makino will reveal how the insurer is using mobile 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-phone provider NTT DoCoMo. The development arose from a convergence of events: Tokio Marine’s market was mature, and the company needed new products and delivery methods; DoCoMo was seeking new services to provide its customers; and the Japanese government had undertaken its “Information Grand Voyage” project, which gathers and analyzes massive amounts of data from both web and real-world sources—that companies can use to build services.

The TMNF application combines the GPS capabilities of mobile phones with context-aware computing to present customers with offers to purchase insurance where and when certain products are likely to be needed. For instance, a customer at a ski resort might receive an invitation to purchase sports-injury insurance. Customers on the links are presented with offers for golf insurance, such as “hole in one” coverage—a valuable commodity in a country where scoring an ace traditionally obligates the golfer to host a lavish party for the other members of his group. The locational awareness of the application is so precise that it can determine whether a customer is at the domestic or international terminal of the airport and recommend the appropriate insurance product.

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

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

Perhaps most important, the project serves as a model of how to use mobile devices to tap new markets. With the Japanese non-life insurance market so mature that conventional growth patterns are no longer expected, it was essential that TMNF look to nontraditional market channels.

“We have explored a new technology frontier for insurance with context-aware computing, and we have created an untouched distribution channel and market segment that doesn’t conflict with existing channels,” Makino explains. “We have also created a progressive and ‘cool’ company image, especially for tech-savvy people.”

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Lessons For The U.S.: Mobile Tech&rsquo;s Impressive Impact In Global Insurance Markets

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Lessons For The U.S.: Mobile Tech’s Impressive Impact In Global Insurance Markets