Mobile technologies such as smartphones pose both opportunities and challenges to today's property/casualty carriers. Spurred by the growing popularity of Apple's iPhone and the myriad devices running Google's Android operating system, many insurers have responded with their own mobile apps that provide key functions such as first-notice-of-loss and policy information.
Although apps afford developers much in the way of functionality, it comes at the cost of interoperability. Unlike websites, apps are platform-specific. Accordingly, an app developed for the iPhone, for example, will not work on an Android device and vice versa. Thus, given the plurality of smartphone platforms, insurers are facing some hard choices as to where to divert their development resources.
"We're seeing a proliferation of device types," says Chad Hersh, principal with Novarica. "We have iPhone, iPad, Android phone, Nokia smartphones, and Blackberries. In the coming months, we'll see Android tablets and Blackberry tablets. And, of course, there's Microsoft. With that kind of breadth of devices, you have to decide where there's going to be the biggest bang for the buck. You don't want to spread yourself too thin and try to support everything. You don't want to give up a really good experience in exchange for an adequate experience on a lot of platforms."
Because it was first to market, the iPhone app has been a favorite development platform among many carriers over the past year. However, Android devices recently surpassed the iPhone in market share and carriers must account for this. Yet, developing applications for multiple platforms is labor intensive, says Dennis Giglio, AVP of interactive marketing for Nationwide. "Every time we do an app, we have to make sure that what we're doing works on all the different operating systems," he says. "We've got Apple, we've got Android, Palm and Blackberry. Every time we make changes to those things, it's a tremendous amount of work."
Mobile Web applications that can be universally deployed through a mobile browser regardless of platform are one means to address this proliferation. However, in a world now captivated by iPhone-style apps, many mobile Web initiatives have been put on a back burner. "At this point, not many insurers have come up with mobile browser-based solutions that are easier to develop, deploy and maintain," observes Uddipan Prasad Bagchi, global head of Wipro Technologies' Insurance Domain.
Nationwide, for its part, has been concentrating more on delivering universal functionality through browser-based mobile Web applications. "That's been our focus for the last six months," Giglio says. "The best approach Nationwide sees is supporting mobile Web, and making sure that we're enhancing Nationwide mobile on Web, versus the app." In doing so, Giglio's team hopes to address the complexity of supporting multiple app platforms. "When you're rolling out a new app, you have to make significant changes when you support multiple platforms. You're always constantly going back. We believe the future is in mobile Web, and we're putting a heavy focus on that right now."
APP MANIA
However, Novarica's Hersh argues that insurers should go with the flow in terms of supporting at least the three top proprietary app platforms-iPhone, Android and BlackBerry. "If you look at mobile Web browser-based apps, they're really visually unappealing," he explains. "People have 'app mania' right now. More than a billion apps have already been downloaded. Why would a carrier fight that?"
The first generation of iPhone apps seen in the industry space were first-notice-of-loss applications targeted at policyholders, says Bagchi. "Other carriers followed suit by launching applications on the iPhone or enabling a few basic policy servicing features in addition to FNOL. Applications for quotation and billing also are being launched by a few carriers. Some have come up with innovative ideas of launching mobile game applications for better brand recognition, and to keep the customers engaged."
Nationwide, for example, launched a Nationwide Mobile for iPhone app in April 2009, which enables users to call emergency services, locate towing services and affiliated repair facilities, collect and exchange accident information, and submit claims that include accident photos and the location of the accident, recorded using the iPhone's built-in GPS.
USAA offers the USAA Mobile App, which includes an auto accident checklist and a rental car locator. State Farm's Pocket Agent enables customers to submit claims, including photos, as well as locate affiliated repair facilities and contact their agent.
At State Farm, developers also target a range of platforms, including mobile Web, but these are "primarily targeted for the smarter of the mobile phones," says Eli Winn, manager of the mobile and social team for enterprise Internet solutions at the Bloomington, Ill.-based insurer. "Everything we do on one platform we always want to do on another. So, for example, if we create something on the iPhone, assuming that the technical capabilities are there, we also would want to replicate that on Android and for mobile Web. But resources are always a concern just because of the pace that things change. And so we want to be purposeful about which ideas we choose, knowing we can't deliver everything."
Other companies, particularly those with more mobile customers, see advantages with simple-to-navigate iPhone-style apps. For example, 1st Guard Corp., a truck insurance firm providing physical damage and non-trucking liability insurance to leased owner operators, recently rolled out an app, called Trucker1, which links with an e-signature system, enabling independent truckers to sign up while on the road. There are currently versions of Trucker1 for the iPhone, Android, BlackBerry and HTC phones.
"Our clients are truckers, so they are always on the go. Rarely are they situated at home," says Dan Ribar, CIO at 1st Guard. "They're in their truck cab, they're at a truck stop, but they are mobile for sure."
SEA CHANGE
While mobile Web has been available for a number of years, the meteoric rise of Apple's app-centric iPhone and iPad represents an unprecedented shift in the importance of mobile computing to the insurance industry.
"Considering where the numbers have been historically for insurance and mobile, there's been a huge sea change," says Hersh. "iPhones and iPads have woken up the eyes of a lot of execs to the possibilities."
The compelling value proposition is the fact that consumers buy and support the devices themselves, he adds. The benefits of mobile app deployments, while not yet documented in hard numbers, are nonetheless compelling to carriers seeking to better reach and streamline interactions with customers.
1st Guard's Ribar, for example, sees a great productivity advantage with his company's smartphone app, which enables truck drivers to deliver electronically signed documents, enabled through DocuSign, an e-signature application running on the back end.
"Think about all the parts of the transaction," Ribar relates. "I'm talking to a customer on the phone, and he needs to sign a form. He may fax it from the next truck stop. Sometimes, something is not right with the form, so we have to get him back on the phone. The process can take us a full day or more of elapsed time. With the iPhone app, we can do the whole transaction in one point in time, signed and delivered. That process, from everybody's standpoint, cuts down to 10% to 20% of the time."
There is also a competitive value to the smartphone app, Ribar says. "One of the things that we've found just from an advertising standpoint is that word of mouth is our best advertising medium. A customer may tell another, 'With Trucker1, I didn't have to do that with 1st Guard, I just signed it on my phone.' That stuff spreads like wildfire."
PAYBACKS UNKNOWN
For much of the industry, however, the payback is uncertain, and has not been formally measured.
"Not many statistics are available on the payback for mobile technologies," says Bagchi. "But insurers are getting into the mobile space because of competitive pressures, changing demographics and increased demand for 'anywhere, anytime' information access."
He adds that the focus has almost entirely been on customer interactions, versus internal efficiencies. "Not many insurers have come up with applications that can enhance the efficiency of operations and reduce costs."
Nationwide's Giglio agrees that it's too early to gauge returns from smartphone apps. "We really haven't figured out exactly what the return on investment is," he explains. "It's the same with social media, we struggle with trying to put a number around the true benefit of the spend. We know that the world is changing, and we know that the way people consume media is changing, and the way that the people want to do business is changing. And Nationwide is committed to meeting the needs of those consumers. We're committed to making sure that we're investing in how our customers want to do business with us."
Hersh says most of the benefits seen from mobile strategies are soft returns, but are nonetheless, of great value to carriers' businesses. "We're looking at factors such as customer retention, customer satisfaction and agent satisfaction," he explains. Any returns for customer retention, he explains, can be significant since this is a high-cost area for insurers. "If you look at the value of retention, even a 1% increase in retention is going to offset the cost of almost any project. Anything that drives costumer satisfaction and customer retention is going to be valuable thing."
Joe McKendrick is an author and consultant specializing in information technology, based in Doylestown, Pa., and a regular blogger for Insurancenetworking.com.
