Insurers that embed in-app purchasing to their mobile applications will have a leg up on their competitors, according to new research released by
According to a recent IDC study, mobile app downloads are forecast to soar from 10.7 billion in 2010 to 182.7 billion in 2015. While this number may be impressive, says the research firm, the larger story behind the numbers is an impending shift away from the current, near-total reliance upon initial app download purchases as the primary focus of app monetization to a rapidly growing focus on in-app purchasing and in-app advertising to fund business models.
This shift is already evident in the free app category, says Scott Ellison, IDC’s VP of Mobile & Consumer Connected Platforms, where in-app purchases allow users to buy a more functional version of the app or to turn on additional features to an app provided by, for example, an insurance company. The implications for insurers that have in place strong customer engagement programs are profound.
“Apps are ideally suited--and in many cases already being developed--for functions such as claims adjustment and tracking, safe driving tips, as digital insurance ID cards, prescription refill reminders, etc., to create visual records of insured items such as jewelry, and to manage health,” Ellison told Insurance Networking News.
The implementation of in-app purchase in an insurer’s iOS application uses something called the Store Kit framework. As an example of how it works, Store Kit connects to the App Store on the insurer’s application's behalf to securely process payments from the user. Store Kit prompts the user to authorize the payment, then notifies the insurer’s application so that it can complete the user’s transaction. The in-application payment functionality can be used to collect payment for enhanced functionality or additional content usable by the insurer’s application.
"App developers are not only focusing on ways to 'appify' just about every interaction you can think of in your physical and digital worlds, they are now focusing on longer-term sustainability issues," noted Ellison. "The user sustainability trifecta of social networking, location and the cloud are now increasingly being supported by the business model financial trifecta of application store purchases, in-app purchasing and in-app advertising."
Business models that seek to include in-app purchasing and in-app advertising must, by definition, further engage users, both within the app itself and over time. Together these dynamics are driving significant shifts in how apps are conceptualized, the integration of additional services and features like social networking and location to more deeply engage users, and how apps are actually developed in terms of incorporating in-app purchasing.
“As insurance is something that affects nearly everyone in some way, whether it be health, dental, auto, renter, homeowner or government-sponsored programs such as Medicare,” says Ellison, “the evolution and growth of mobile apps will help transform the relationship between customers and insurance providers.”
For more information on the IDC study, Worldwide and U.S. Mobile Applications, Storefronts, Developer, and In-App Advertising 2011-2015 Forecast: Emergence of Postdownload Business Models, click
