As the throng of baby boomers, ages life and annuity insurers, asset managers, financial consultants and banks are competing aggressively for the retirement market.
The mobile sales tools being used by these groups vary widely, from wireless dictation and transmission that document time-sensitive information or events, to using a smartphone as a portal to enterprise applications.
Although considered by some in the industry as an oxymoron, the use of mobile devices and CRM functionality is on the rise. In 2006, Gartner Inc., Stamford, Conn., accurately forecast continued strong annual growth in mobile CRM across all verticals, predicting 40% to 60% in sales growth over the next two to three years. And Gartner reports that its conversations with life insurers and agents during the last three years reveal that adoption of the technology has steadily increased.
Yet a host of factors, such as the economy, M&A activities, culture, security and increased regulatory scrutiny, seem to be holding insurers back from fully realizing mobile technology as a business enabler, and as a chief way to approach the retirement market.
"Security concerns and a comprehensive vision about how these devices could be used tend to stall insurers with captive and independent sales forces alike," says Steve Leigh, principal research analyst with Gartner, in a recent report.
Although insurers see the promise of delivering via mobile devices the analytics and associated customer intelligence that can be fed into customer relationship management (CRM) and other business applications, the prospects of getting such an initiative underway are daunting, even to the largest carriers.
Rachel Alt-Simmons, senior analyst, insurance, with TowerGroup Inc., Needham, Mass., notes that there has been some pullback on mobile initiatives as carriers face a rough economy. "Think of how much disruption in the economy has meant to the channel with the changes at Bank of America, Washington Mutual and other banks that also sell life insurance and other retirement products," she says. "These companies are figuring out how they'll merge, acquire, etc. and what that means for distribution."
THE BUSINESS CASE
Making the business case for field sales force use of the mobile devices themselves seems an easy enough sell. However, it should include a vision of "what could be," notes Igor Glubochansky, director of industry solutions at AT&T's lab in Redmond, Wash. Glubochansky holds that insurers are moving from technology such as present day GPRS (General Packet Radio Service that provides data rates from 56 up to 114 kbit/s) to UMTS (Universal Mobile Telecommunications System, a third-generation (3G) mobile network designed to provide global mobility with a wide range of services including telephony, paging, messaging, Internet and broadband data).
"We can connect anywhere at any-time with more bandwidth," says Glubochansky. "So imagine an agent in the field trying to explain a complex life or annuity product to a client," he says. "Using UMTS, the agent 'calls' an expert over video-conference to explain the nuances of the product/service and answer questions. This expert can take control of the agent's TabletPC (or laptop) to run simulations, push documentation, etc."
Telecom providers are not the only organizations investing in mobile networks. In June, Infosys Technologies Ltd., a Bangalore, India, provider of outsourcing technologies to the insurance industry, was granted a patent by the U.S. Patents and Trademark Office that has nothing to do with its traditional business offerings. The patent covers the technology that makes a mobile network appear seamlessly connected, even when the underlying technologies and their related distinctiveness, is altered.
And as networks become more sophisticated, mobile devices become more prolific. Furthermore, from the mobile device perspective, cost is not a big consideration, notes Alt-Simmons. "It's considered a have-to-have," she says. "But the applications being rolled out to the devices are driving some of the costs, because it's forcing insurers to take a top-down view of corporate objectives, and evaluate what's best for the organization and to its distribution functionality, so the initiative becomes larger when you view it this way."
At the application layer, middleware, such as AT&T's Mobile Enterprise Applications, provides a framework where IT can incrementally roll out - and prioritize the applications that should be delivered to the wholesaler first - based on the organization's requirements. "Insurers should be paying attention," says Alt-Simmons, "because the middleware providers will compete for their business."
BIGGER PICTURE
At Hartford Life, Simsbury, Conn., the mobile device and its middleware is considered a simple delivery tool, second to a larger back office CRM effort to rethink how the company empowers its channel.
Jennifer Golec, director of business intelligence at Hartford Life, is currently working with PLANCO, The Hartford Financial Services' national network of more than 300 wholesalers, to implement predictive modeling that will funnel into a larger producer retention program.
"The goal is to help wholesalers facilitate the sales process with the channel," says Golec. "So we use analysis to study selling behavior patterns, rate the brokers into different groups, and push that segment analysis out to the wholesalers."
Marketing, in turn, uses mobile devices to identify to the wholesalers those brokers who may have fallen off the radar. In turn, mobile devices are used by the wholesalers to present this information to the various segments.
Further down the channel - and across the ocean - analytics are being used in Europe to create a 360-degree view of the customer that can be accessed via a variety of mobile devices, notes Emmanuel Viale, financial services expert in Accenture's technology labs in the south of France.
At the company's labs, Accenture is working on an insurance product that aggregates data from different sources, and makes use of that data through rules-based analytics.
"We are looking to automate these elements," he says. "A seasoned relationship manager will find it effective and useful to see various segments. We can summarize best practices that spell out in plain language for this manager what the nuances of the customer are, what to introduce them ... how to cross-sell."
In rural France, says Viale, there is a new wave of financial advisers using technologies such as Web based tools, thin clients and 3G cards connected securely to quote/rating engines and other back office systems.
PRODUCTIVITY BOOST
Productivity also is a selling point. Wholesaler Bill Chambers, regional VP for Manulife Investments, Toronto, oversees the efforts of 3,000 advisers, 1,500 of whom are actively using mobile devices such as smartphones and Blackberries to communicate with their customers and with the back office.
"There are tremendous advantages to using mobile devices to communicate with clients and with our back office," he says. "During any given week in northern Ontario, I spend three solid days either flying or driving. The key in my business is to know where my customer is investing his money, so I can show him in real time how his portfolio is performing. I can connect with a client anywhere, and either obtain or forward critical customer information instantly."
Chambers also touts the advantages of being able to schedule sales appointments and order or submit forms on the fly, a service otherwise unavailable to him.
Gartner's Leigh believes that appealing mobile features such as music, video and GPS-combined with the movement of these devices as status symbols, will contribute to their use by insurance agents and financial planners for personal and work use. "This is particularly true for younger agents coming into the business," he says.
The prospects of taking a comprehensive approach to delivering CRM, analytics and business applications at the device layer may be overwhelming from an IT and business perspective, says Alt-Simmons, yet its benefits can't be ignored.
"There is a sense on the technology side that some of what we are seeing with mobile technologies is marketing spin," she says. "But some life insurers believe that when times get tough you don't abandon your sales force. If anything they should continue to make those investments, and give the brokers the tools they need."
MOBILITY AT WARP SPEED-IN BALTIMORE
Imagine a fully IP-based integrated fourth Generation (4G) cellular network
system capable of providing between 100 Mbit/s and 1 Gbit/s speeds both indoors and outdoors, with high quality and security, and where voice, data and streamed multimedia can be given to users on an "anytime, anywhere" basis.
Many companies tout this technology as the red carpet carrying its applications to mobile devices today. However, while some currently demonstrated technologies may become part of 4G, until the 4G standard or standards have been defined, it is impossible for any company currently to provide with any certainty full wireless solutions that could be called 4G cellular networks, say experts. And telecom providers face enormous costs in 4G infrastructure and equipment.
Sprint may be the exception - and the carrier to take the slings and arrows.
In October, the network giant launched its Xohm service, the company says, offers America its first 4G system. Based on WiMax technology, Xohm can deliver broadband data speeds to notebooks, Internet tablets and eventually smartphones. The network, however, is struggling with reliability issues, and the high-speed service is limited to just one city - Baltimore.
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