Insurers have lagged other industries in terms of delivering the kinds of digital experiences that consumers have come to expect and soon will demand, according to “Trends 2014: North American Digital Insurance,” a report from Forrester Research.

Now insurers are threatened by car manufacturers, utility companies, telecom firms and sensor and wearable technology manufacturers, which now offer utility and access to consumer data, and could be positioning themselves to offer competitive products and services, Forrester said.

“In this race for consumer mind and wallet share, insurance carriers must pick up their digital pace,” Forrester said.

See also: Predicting the Consumer Mindset

Forrester said price comparisons, ratings and reviews are now “old school,” and that consumers, armed with digital tools, are stepping into the shoes of any number of legacy insurance roles. For example, Allstate has launched its QuickFoto Claim mobile app, which enables insureds to shoot photographs of auto damage and submit them for settlement, eliminating the need for an adjustor to examine the car. Also, Esurance now offers a video chat function that connects insureds and appraisers, also to eliminate the need for an adjustor to examine the car in person. And these mobile apps aren’t just aimed at consumers, Forrester said. Small business insurers are packing loss control functionality into tablet apps and are turning business owners into inspectors.

Six forces are determining priorities for digital insurance executives, according to “Trends 2014: North American Digital Insurance,” a report from Forrester Research, including booming growth in revenue and profits; the fallout from HealthCare.gov, emerging insurers ability to meet consumers expectations for digital interactions; extreme weather and the aging of American drivers and homeowners.

See also: The 5 Characteristics of Highly Effective Digital Insurance Leaders

Consumers are expecting more from their digital interactions, Forrester said. “They’re no longer looking at insurance firms in the context of other insurers. Instead, they’re experiencing new features and services in their interactions with banks, retailers, and airlines that are now shaping their digital expectations of insurers.”

To stay ahead of customers’ evolving needs, insurers are embracing open innovation, Forrester said, an approach in which ideas are solicited from employees, partners and customers. To develop more ideas more quickly, Forrester recommends insurers open digital laboratories, in which they would develop products and strategies that leverage technology and address the most significant problems and opportunities in the industry. Forrester also recommends insurers sponsor hackathons, marathon sessions focused on designing new digital applications.

“Hackathons provide fertile ground for entrepreneurial thinking and challenge the notion that big insurance can’t be nimble,” Forrester said. “Earlier this year, Principal Financial held what it called a “CodeJam” at its downtown Des Moines headquarters, the fourth such innovation event held by the company, to spark better collaboration within the company.”

Digital also can be used to enable agent distribution. Forrester said insurers’ websites are important, but that consumers need to develop trust. Forrester notes that marketing automation firms now are offering the opportunity to match consumers with insurers based on location, language and lifestyles, much like online dating sites.

Mobilizing illustration application processes also enable distribution, Forrester said and medical underwriting also is soon to be enabled on mobile devices.

“It’s not just the underwriting insurers that are developing and promoting consumer-focused mobile apps,” Forrester said. “Independent agencies have jumped into the mobile fray, launching their own apps to better serve their customers as well as to recruit new agents.”

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