Mobile will remake insurance business models by 2020 is the bold claim laid forth by a new report from Forrester, titled “The Future of Insurance is Mobile.”
There are many angles to that statement, and Forrester’s Ellen Carney attempts to outline them as such: Increased customer engagement with policyholders, new sales opportunities, big data/underwriting potential of smart devices, sales tools for brokers, agents and advisors, and new distribution opportunities. All of those advancements can help insurers connect, communicate and sell to consumers more effectively, but Carney is more concerned with how insurers can do that with immediacy, simplicity and making sure it is relevant to the individual.
Fully automated private passenger auto insurance, new life for usage-based insurance, ability for insurers to select and price the most desirable risk at the optimal time for customers given the efficiency of big data across mobile, agents and brokers specializing in complex risk using tablet tools by collecting risk inputs and outlining complex risk mitigation strategies; these are some of the potential industry transformations the report anticipates seeing by 2020.
The evidence for heavy mobile adoption is undeniable: The report cites 6 billion mobile subscriptions globally, more than a billion mobile apps are downloaded per month from Apple’s iTunes store alone, and the amount consumers research and purchase online is skyrocketing as well—more than $10 billion is forecasted to be spent on non-digital goods via mobile phones in 2012, and that amount is expected to jump to $31 billion by 2016.
Forrester recommends keeping several things in mind when jumping into the mobile fray. Mobile devices can make it easier for insurers to put forth customer-centric efforts, but with the rise of devices, expectations have risen as well.
“Digital insurance teams need to scan the mobile landscape for innovations that can create better consumer or agent experiences, increase efficiency, and reduce costs,” reads the report. “But for mobile initiatives to deliver the expected outcomes, digital teams need a vision that moves their firms from experimentation to mobile maturity.”
To prevent project failure, the report suggests implementing a mobile governance framework to ensure business strategy alignment, benchmarking and providing inventory for mobile assets within an organization to make sure each app provides “context, convenience and immediacy,” analyzing and anticipating mobile failure points, and lastly, optimizing mobile strategy continuously to ensure the app is reaching who you want it to reach with the message you want to convey.
Following these guidelines, “mobile will be the catalyst for insurance transformations that will ripple beyond just how customer interactions are changing.”
The report also suggests a four-step mobile engagement process for insurers to align with: Discover, during which a policyholder or potential consumer becomes aware of a company’s mobile capabilities and signs up for information; Explore, whether looking for a local agent or investigating packages, apps can deliver company-specific information; Buy, this step involves action on the part of the policyholder or consumer such as a purchase being made, a payment alert established, etc; and Engage, mobile apps allow insurers to provide services beyond the purchase that keep policyholders happy.
A plan for mobile marketing, sales and services from a digital team needs to outline a vision with customer experience and business goals in mind before jumping too far into the game, according to the report, as consumers expect such a unified yet simple experience.
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