Across the value chain, no other technology has more potential to transform how people interact with corporations than mobile. Mobile devices and apps provide immediate access to contextually relevant information, speed tasks and increase productivity by putting tools and other problem-solving capabilities into their users’ hands. And these applications are seemingly everywhere -- except in the insurance industry.
Mobile applications that leverage the unique capabilities of smartphones, tablets and phablets are still rarely used among insurers, according to studies like “Benchmarking the New Normal: 50 Advanced Capabilities for P&C Insurers,” a report from the insurance technology analyst firm Novarica. According to the survey:
For claims, just six percent of P&C insurers provide mobile first notice of loss (FNOL) apps with video, GPS data capture and pre-fill, with another 19 percent planning to offer mobile FNOL applications this year.
For field adjusters, a mere five percent of P&C insurers make use of apps that leverage mobile device GPS, audio and video capabilities, with another 11 percent planning to deploy similar applications in 2015.
For producers, only 8 percent of P&C insurers have widely deployed mobile apps or mobile-optimized Websites to provide access to their books of business or sales manuals, while another 23 percent plan to do so in the next year.
For customers, apps to view relationship details, balances and key documents are widely deployed by just 18 percent of P&C insurers, with another 29 percent planning to do so during the course of 2015.
“Mobile is where the money is, mobile is where the consumers are spending their time, and a lot of industries now have a mobile-first mantra,” says Jeff Goldberg, VP of research and consulting at Novarica. Most companies are in a mode where they “build for the mobile channel first and worry about your Web applications and everything else later,” he adds.
But that approach, he notes, is frequently not the case for the insurance industry − more than half of carriers still have no plans for mobile implementations. While that may seem like the glass is half empty, it’s also half full: Within the half of the industry that is actively planning to deploy mobile applications, there are a handful of early adopters that are already using these technologies to good effect.
Crawford & Co: Making the Most of Mobility
Over the past two years, Crawford & Co., a provider of claims management services, has created more than 30 mobile applications to increase the speed of decision-making and respond faster to its customers.
These are “enterprise-class applications,” according to Brian Flynn, global CIO and executive vice president of Crawford, and their return on investment has been substantial, as the suite of customized of mobile apps has dramatically increased Crawford’s workforce productivity. “We’ve had an 81-percent improvement in field processes and a 90-percent improvement when we combine these applications with call-center operations, and a 41-percent improvement in certain processes in one of our subsidiaries,” Flynn reports.
Mobility has gone a long way to improve customer experience as well, Flynn continues. “In the past, we had a call center. We’d have dozens of people picking up the phones and calling people one by one; missing them, getting calls back, and not being able to answer the calls,” he explains. But today, using the Crawford Desktop system along with a suite of mobile apps -- including one for field personnel called CAT Connection -- most of that process is automated, making use of embedded business rules and social media.
Another example is Crawford’s Site Assessment app, which automates claims assignments and scheduling using GPS coordinates based on adjuster locations. Flynn says the app was developed to help Crawford better respond to clients who expect to get a report within 30 minutes of reporting a claim. Now, he says, “We know when somebody is in a neighborhood, and we can automatically assign that claim.”
Because it has an international clientele, Atlanta-based Crawford is constantly monitoring global weather patterns, on the lookout for catastrophic events. In the event of a hurricane, for example, the service provider can use the CAT Connection app to determine its adjusters’ availability, assess their skill sets and quality scores, and then assemble and deploy hundreds or thousands of appropriately trained and experienced teams to devastated areas.
Once the adjusters are on site, they use the Site Assessment app, in tandem with mobile device camera and voice recording capabilities, to speed the claims process.
“Adjusters used to go out with a tablet of paper; then, they’d come back and key it into a computer,” Flynn says. “Today we’re able to do that instantaneously while they’re still at the site. And then payment is on its way. For major hurricanes, it used to take our company six to eight months to close out all the claims. Today it takes us two to three months.”
Crawford developed its suite of mobile apps using the claims development platform from Appian, a provider of business process management (BPM) software. Flynn says that the developer’s agile development methodology and BPM capabilities cut Crawford’s development time in half.
“Something like that would have taken us two or three times longer without Appian,” he says. “In past years, you might find a CIO saying: We’re developing our systems for the next 10 years.’ Well, we don’t develop systems for just the next 10 years. We develop systems that have ultimate flexibility, so that they will be able to morph − week in and week out, month in and month out − based upon the demands our clients bring to us.”
Flynn reports that the Appian platform also helped Crawford squeeze more value out of its traditional systems, while incrementally replacing components of its legacy technologies. “We’re bringing more and more components out of the legacy into the new; we’re probably midway through the retirement of our legacy systems,” he says. “Ultimately, the legacy will be an empty shell and we’ll just shove it aside. That’s one of the powers of this: You don’t have to wait two or three years for a major application development and deployment. You can do it in phases.”
ACE Group: Becoming Proactive
ACE Environmental Risk, a division of the ACE Group, insures customers against hazardous spills − occurrences where the liability can be huge and response times are critical. To reduce the size of the first and accelerate the latter, the insurer developed ACE Alert, a mobile FNOL application.
The insurers’ customers are mostly truckers that haul hazardous materials, and companies with pipelines or underground storage tanks. A typical claim involves a vehicle rollover spilling diesel fuel or a load of hazardous material. ACE Alert allows customers to immediately report chemical spills 24 hours a day, seven days a week, by phone, the Web or with a mobile device, explains Bob Winterburn, assistant vice president and the app’s architect.
“When it comes to environmental risks and accidental releases, most carriers are reactive,” and it’s the customers who are proactive, Winterburn says. The ACE Alert app is a key part of an initiative by ACE Environmental to turn that dynamic around.
With a typical environmental claim, the customer immediately gets involved, as it’s the customer’s material that has been spilled, its employees are the ones reporting the event and the spill frequently occurs on the customer’s site. Very often, the customer will work with contractors to coordinate the cleanup and then submit the claim after the fact.
“Often, the insurer’s reaction is, Why did you spend so much? Why did you do this?’ Winterburn explains. “There’s a lot of Monday-morning quarterbacking, and it creates contentious relationships between the carrier, the insureds and the contractors.”
With its new mobile FNOL app, “What we’ve designed is a much more proactive program that allows us to get involved within the first minutes, if not seconds, of an incident,” Winterburn says.
Once engaged, the insurer can help the claimant coordinate the cleanup process, identify contractors and understand what needs to be done with regard to scope and personnel. “It alleviates a lot of the issues on the back end with invoice negotiation,” Winterburn says. “It’s really a win-win-win for the insurance company, the insured and the contractors, because they’re able to get paid quickly.”
ACE can receive an FNOL via phone, the Web or the new mobile app, which generates the fastest response. “A typical response time for us getting back to the insured on the Website is one to two minutes. The average time for us getting back to an insured on the app is roughly 30 seconds,” Winterburn says. The response can come directly from ACE or from Spill Center, an environmental claims management company employed by ACE.
Spill Center provides the technology backbone that supports ACE Alert, including a database of 3,500 contractors throughout the U.S. and Canada, as well as a database of state and provincial regulatory requirements.
ACE Alert also uses a mobile device’s geo-location features to identify where the device is when the incident is reported, reducing potential uncertainty over the spill location and speeding response times. The app also provides the ability to send customized email and text messages to distribution groups pre-selected by the customer. The user can also attach photos and documents, creating reports in real time.
Since ACE has rolled out the mobile FNOL program, it has received claims for 30 to 35 spills. “With environmental risks, if you don’t get involved at the very early stages, and if it goes off in the wrong direction, it takes a long time to turn around,” Winterburn acknowledges. “By getting involved early, we’re able to mitigate the situation quickly, control the costs and limit the liability. There’s a definite cost savings there.”
Next steps for ACE Alert include support for multiple languages and contingency planning to help customers better manage their risks. “The system’s already designed to evaluate what language the user’s phone is programmed to and to transfer FNOL calls to native-language speakers,” Winterburn reports. “We submit a survey after every incident and have gotten very positive feedback from everyone. They like the ease of use and the connectivity.”
Barriers to Adoption
Given the multiple benefits of these mobile solutions and solid results achieved by early adopters like Crawford and ACE, why aren’t more insurers jumping on the mobile bandwagon?
One reason is the varied needs of different types of insurance producers. Training, equipping and supporting independents versus captives requires what amounts to separate technological infrastructures and has slowed industry adoption, contends Tony Jacob, manager of Microsoft’s Worldwide Insurance Team.
“Mobility is sometimes more and sometimes less compelling, depending upon the type of producer, his role and the business scenario,” Jacob says.
Data security is also high on the list of insurers’ concerns, as mobile devices would likely provide access to a large amount of personally identifiable information. “There are a lot of concerns about the security profile of mobile devices and the fact that you’ve got to add another management stack,” Jacob says. Devices from Microsoft and its OEM partners address this issue with the use of the familiar x86 architecture and eight-key encrypted hard drives. This allows for both software and hardware encryption when connecting to business apps behind the firewall, and gives the slate or the tablet “basically the same kind of security profile and manageability as a laptop,” he says.
Another reason for the slow uptake has been insurers’ limited experience with mobile applications, notes Mark McLaughlin, IBM’s global insurance director: “Mobile gets them into a whole new set of capabilities, but it’s big and expensive and there’s a learning curve. When it’s one app, it’s not that big a deal. When it’s 10 apps − and that’s where this is going − it’s just like supporting PCs.”
McLaughlin says that insurers are only now really beginning to appreciate the opportunities to differentiate themselves via mobile applications as a way to have more and different sorts of interactions with their customers. “Our customers and agents are going to demand these styles of interactions because that is what they are getting everywhere else,” he says. “Beyond that, what we’re really talking about is the opportunity to completely revamp the insurance business.”
As an initial foray into mobile for producers, many insurers, especially those with independent agents, are pursuing Web-app strategies, Jacob says: “Think about the functions of agents: They need a form, to create a quote or look up customers’ contact information, renewal date or premium. A Web app can suffice for that.” The Web-app approach is compelling, Jacob says, because it simplifies deployment and sidesteps hardware issues, which insurers have little control over with independent agents.
The trade off, he admits, is that the speed, efficiency and quality of presentation can vary across devices, screen sizes and operating systems.
Given that they can dictate hardware, operating system and software requirements, insurers with captive sales forces may have more incentive to develop native apps. This approach allows for more control and more efficient use of the hardware and the peripherals.
But with either of those approaches, “You finally get to a point where you can do one version of the app architecture, one version of the business logic, and you can deploy it across multiple devices,” Jacob adds.
Beyond the Basics
While many insurers are only now trying to deliver the basics to agents, such as customer profiles, contact information and history, a few are extending their producers’ apps to include decision-making capabilities.
Seismic Software, a Microsoft partner, for example, now offers a customer needs-assessment app, delivered through the cloud. Jacob describes it as a deck of more than 100 slides, including every product that agent can sell. “The agent sits with the customer and goes through their needs,” he explains, and the system tailors suggestions. This supports their ability to sell a more complicated product more quickly.”
In partnership with Apple, IBM has launched its Retention app, designed to put customer-contact information and advanced decision-making capabilities into the agents’ hands so they can service their customers more quickly and effectively.
For example, if a customer calls his agent to report that a wind storm crashed a tree into the insured’s home, the agent no longer needs to go to the home office and pull the customer’s file before responding. “That’s what they used to do. Or, they would cart around a bunch of out-of-date paper files in their car,” McLaughlin says. “Now they can just say, On my way.’ When they get there, they know exactly what coverages that customer has.”
The value of such applications is increasing as insurers replace an aging workforce. “The problem a new agent faces is they don’t know that much,” McLaughlin says. “They’re trying to learn the products; they’re new to cold calling and prospecting. It’s a very difficult job, and our industry’s agent retention rate for the first 10 years is not all that high.”
The analytics component of the Retention app can prompt agents to action and help them prioritize tasks. For example, if a customer has recently let a policy lapse, the app will alert the agent that the customer is at high risk of attrition and push the customer’s phone number to the agent, along with the customer’s preference for text messages.
“That’s how you marry the insight from the home office to the agents in the field,” McLaughlin says. “We want our agents, when they’re talking to customers, to know and to take the next best action. It’s not just a fancy analytics report. They can take action immediately because it’s on their mobile device. This is about rethinking how the agent can provide better service. And if we can coach them in real time and get them to ask the right questions or make the right offers or just know the customer well enough to express the right concerns, then we’ve moved the process forward immeasurably.
“I’ve talked to some of the large insurers, and the senior end of their workforce, frankly, doesn’t want to be bothered with all of this,” he concludes. “They just want to collect their commission checks and play golf. But for the ones that are willing to move forward, these tools can really help. Think about how insurers are expanding lines of business. Having these sort of insights can accelerate progress in that expansion.”
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