Insurers Only Scratching the Surface When it Comes to Mobile Apps

Ultimately, the big strategic question is: How might insurers leverage mobile apps as a differentiator in the market? Will mobile capabilities ever prompt consumers to choose one particular insurer over another?

We covered these issues and more during Deloitte's three focus groups. The sample of participants was not nearly big enough to come to any definitive conclusions—30 individuals, split evenly among three age groups (21-29, 30-46, and 46 and older).

But we did hear loud and clear that mobile devices have become essential tools in the personal and professional lives of all of those attending the focus groups. In my last blog, I noted that attendees agreed that whether at work, at home or on the go, mobile technology is increasingly fueling social and commercial interactions. In general, these individuals expect to employ their mobile devices with just about every entity they encounter.

The focus groups also generated some useful insights for carriers to ponder as they assess their mobile strategy going forward. From this small but representative sample, it was clear that while insurers have made some good strides in the mobile arena, they have the opportunity to engage policyholders via smartphones and tablets on a far more regular basis, thus enhancing the customer experience and possibly impacting retention rates. 

In observing these focus groups, it appears the challenge facing insurers is two-fold. One is to create greater awareness of their existing mobile capabilities and the advantages they already offer, so that more policyholders will download their apps and actually make use of them.

The other challenge will likely be a lot tougher—to develop apps that make insurers relevant in a consumer's daily routine, rather than just something handy to have at the time of a claim, a bill, etc.

When it came to insurance apps, the response by the focus group members was less than enthusiastic. Many didn't even know whether their insurers offered an app, although they assumed all carriers must have one "because everyone is doing it," as one participant said.

When prodded, a few admitted to having interacted with their insurers over a mobile device. One recalled adding an endorsement to their auto policy. Another had summoned a towing service recommended on their app. A third had taken pictures of flood damage and sent them to their homeowners insurer over a smartphone, while another had done the same after an auto accident. One had checked on a claim's status.

The focus-group members liked the idea of having proof of insurance on their mobile device—one compared it to the convenience of being able to produce an airline boarding pass on their smartphone. Others were intrigued by the notion of taking a video inventory of their personal property via a homeowners insurance app.

Shopping for coverage was more problematic. A handful of those in the focus groups had tried to compare quotes on their mobile devices, but complained that it was too difficult and/or time-consuming to input data for an insurance application on a smartphone or even a tablet. And some had security concerns about sharing their private information on a mobile device, especially if transmitted over a public Wi-Fi network.

Part of the problem in generating awareness and favorable attitudes towards insurer apps is that usage is primarily geared towards specific events that don't take place very frequently (policy renewals), or at all if the policyholder is lucky (reporting a loss). That means unless carriers can engage consumers more frequently, they may risk seeing their apps gather virtual dust on a policyholder's digital shelf.

So what might insurers do to up their game when it comes to mobile capabilities?

Many in the focus groups said they would like the opportunity to chat live with someone when seeking a quote, asking a coverage question, or talking about a claim. Offering instant messaging and a live video call option were urged, given that people are accustomed to hooking up over their mobile devices in real time. One said access to an actual person over an app gives insurance a "human face." Others believe being able to speak to someone live allow them to explain themselves more effectively on a claims issue.

Telematics is another way insurers might keep consumers engaged on a continuing basis, as apps (rather than separate devices installed in cars) can be employed to track driver behavior. Such apps not only should assess driving skills and habits for pricing purposes or verify claim circumstances, but also give consumers a head's up about road hazards and weather events, and offer referrals to various service providers. Beyond the potential to earn premium discounts, the payoff would theoretically be fewer accidents, less injuries and deaths on the road, and cheaper repair costs. The same types of benefits could be provided through an app for homeowners, life and health insureds.

Taking this a step further, loyalty programs could allow policyholders to earn points off their app for safe driving, healthy living, or proactive property loss mitigation, which could be redeemed for discounts on gas, auto or home repairs, supplies, etc.

Gamification is another intriguing possibility. Nearly all of the focus group members said they regularly play games on their mobile devices. While most found the notion of an insurance-related game to be odd, or at least corny, there might be potential to turn telematic monitoring into a virtual competition, with the performance of individual "players" (policyholders) compared against others in their peer group in return for various benefits—premium discounts, loyalty points, coupons for outside services, etc. Other types of games could be employed as risk management teaching tools.

Coming out of the focus groups, I felt that the insurance industry as a whole has already taken the basic steps to transition routine tasks onto mobile platforms. But as I mentioned in my last blog, crafting and implementing a mobile strategy is a journey, not a destination—there is perhaps no end game here, as the industry continually seeks to develop the next "killer app."

It would be a missed opportunity if the industry's response to the mobile revolution ends up resembling the tentative and uninspired moves to website-based services delivered via desktops a number of years ago, when carriers, agencies and brokerages often settled for posting digital brochures online.

While it may be hard for an insurer to differentiate in terms of mobile capabilities for long, if they are tentative or complacent about app development, they risk becoming irrelevant in a rapidly changing digital world.