December 15, 2010

The mobile landscape seemingly is in a constant state of flux. From WAP (wireless application protocol) sites, to text messaging, to "apps," popular mobile solutions have taken numerous forms, and insurance carriers have moved adeptly through these fluctuations to find the best way to reach consumers and provide them with service on the go.

Today, the major sea change in mobile is the increasing number of smartphone operating systems, and the need to develop relevant, user-friendly, secure applications for each. Recalling the format wars in video media, or even the Mac vs. Windows debates, Apple's iOS (which powers the iPhone, iPod Touch and iPad) and Google's Android (which is available on a number of manufacturers' phones) are leading the pack in terms of buzz and consumer penetration. But they're not the current leaders in terms of market share. That honor belongs to Research in Motion's (RIM's) BlackBerry -- what some might consider the original smartphone. The Waterloo, Ontario-based company also took aim at Apple's dominant iPad tablet computer with the introduction this fall of the PlayBook tablet. (For more on tablets, see related sidebar, page 31.)

According to September 2010 ComScore research, 58.7 million Americans own smartphones. This is roughly equal to standard mobile phone penetration in 1998, according to the FCC. RIM's BlackBerry still leads the U.S. market with a 37.3 percent share (as of September), ComScore reports. But that's a 2.8 percent drop since June 2010. Meanwhile, Google's Android jumped 6.5 percent, to 21.4 percent of the total U.S. market, in the same time period, while Apple's 24.3 percent market share remained the same.

All In

But with three different operating systems at practically equal levels of penetration, insurance carriers must find the resources to develop mobile applications for each -- or choose one and hope that it's a winner. Bob Wasserman, VP of e-business for Allstate ($27 billion in 2009 P&C and life premiums), says the insurer believes it is important that its mobile strategy includes all three of these platforms, as long as they continue to lead the marketplace.

"A while ago we took a perspective from a lot of our consumer-facing applications where we decided to build them out across BlackBerry, iPhone and Android platforms," Wasserman says. "If you're going to try to build out apps that are going to serve consumers, you have to look at the dominant players that are out there. Given the way this market is still forming, if I want to put out a far-reaching consumer app in the market, I have to address all three of those platforms. We want to serve a wide swath of consumer users."

Northbrook, Ill.-based Allstate recently released a social media-focused app, Tag In, concurrently for all three platforms. Tag In uses the GPS functionality in smartphones to establish users' locations, and then sends messages including that information to selected friends and family. To bolster its reputation and brand positioning around safety and security, the carrier wanted to develop a way for users to "check in" and confirm their safe arrival at a location without sending multiple text messages or using a public social networking site, Wasserman explains.

"We like the consumer focus to this," he says. "We tested the requirements among groups of consumers. It used to be, 'Call me when you get there.' But now with the mobile phone there's a little bit of question as to where that call is actually coming from. We said we've got an idea there, let's build it out. It's about safety, it's about protection."

According to Wasserman, Allstate's internal development team uses a platform that allows it to develop applications once but deploy them across the three mobile operating systems. Wasserman declines to name the platform provider, citing company policy, but he stresses that it is important to be able to respond to consumer feedback to apps and make changes as needed.

"You're going to get great feedback from your consumers and users, and that will help you understand use cases and prioritize some development and enhancements," he says. "No matter how well you think you thought something through, a consumer is always going to find something to react to you about."

Popularity Contest

While Allstate is developing apps for all three leading mobile operating systems, State Farm has turned to a metric other than pure device penetration to choose the operating systems on which it develops its mobile applications. Mike Fields, assistant VP and senior IT architect for Bloomington, Ill.-based State Farm ($32 billion in 2009 premiums), says that app store market share is the best measure of the devices on which consumers are choosing to interact with companies.

"If you look at just the raw number of phones, you see a large presence from BlackBerry, Android and iPhone. But if you look at the app store market share each has right now, the dominant players are anything based on Android or the iPhone," Fields says. "We focus on those for native apps. We also have ways of measuring the phones that are coming to StateFarm.com looking for services, and well over 80 percent are in those two platforms."

Fields, however, is quick to note that there's no reason to expect that these two platforms will continue their dominance. As a result, State Farm takes a long view of the mobile landscape and tries to stay ahead of consumer trends.

"We have things we'll do from a business perspective," he says. "We have both our delivery team for mobile, and then a small R&D team that looks at emerging platforms. We might want to have a presence on something for non-market share reasons."

One of those emerging platforms is Microsoft's Windows Phone 7, launched in November 2010 to challenge Apple, Google and RIM. Fields notes that while Android is poised to take the lead in the app store-marketplace measure, there is some buzz around the Microsoft OS in that area. "You could see Windows Phone 7 have a big show in that space," he says. "This competition is going to drive new features among the OS providers."

Some of the effects of this competition already can be seen in the evolution of Apple's iOS, according to Fields. For example, "On Android-based phones, if you do it responsibly you can talk to the text system or person's contacts," he says. "An iPhone is more locked down, but they're opened up more than they used to be."