Driven by the forces of consumerization, insurers have seen the need to develop mobile capabilities to meet rapidly changing customer expectations. Insurers jumped into app-development, producing any number of novelty items of dubious relevance to their customers. Pioneers have followed with truly useful applications for mobile apps, and some carriers are moving into a new realm of wireless communications with telematics programs. What do these developments and others mean for the future of mobility in the insurance industry, and what do carriers need to do to get there?
Mobile enablement, at least in some of its more rudimentary forms, was eased for many insurers through improvement of their back-end systems for Web-enablement and other purposes, such as systems and third-party data integration, says Chad Hersh, a partner with New York-based Novarica. "Creating apps is a relatively low-cost and quick endeavor, generally speaking, if you've done that prework," he says.
Integration with back-end systems is critical for moving from the "silly little app" stage to providing capabilities that Hersh characterizes as reflecting a more realistic perspective about what consumers actually want.
Within the life insurance sector, John Hancock (Boston, a subsidiary of Toronto-based Manulife Financial, about $50 billion in 2011 revenue) created a full illustration system two years ago and in 2012 launched Life Briefcase, which allows agents to download illustrations and documents that they can sort by client. "Agents can push one button to download a summary for each policy for their entire book of business," notes Peter Anderson, assistant VP, illustration systems development.
John Hancock has been able to take advantage of a Web-based new business and in-force policy system implemented 10 years ago that greatly simplified the extension of capabilities to the mobile channel, according to Anderson. "All of our calculation engines are pushed up on the Web, and they're the same that we use on our desktop systems, so we only have to test new development once," Anderson says. "IPad apps query Web services, and the actual run is done on our servers. So when we do an update on the Internet, we update all the tools at the same time."
While the feedback has been good on the part of distributor users, adoption hasn't been overwhelming, Anderson notes. "When I go to industry meetings, it's the No. 1 topic for life insurance companies, and any time I meet with agents, they want to know when we'll get more functionality on iPad and other Apple products," he says. "There's clearly a pent-up demand, but we're still challenged to know exactly how agents are using the capabilities and what the right direction should be in mobile.
"We're committed to mobile and contemplating enabling more administrative services on the iPad, such as agents being able to request beneficiary or address changes, but that's still in the future," adds Anderson.
The picture is a little clearer in the P&C segment, where there potentially are far more uses for wireless communication, says Novarica's Hersh. He notes that several insurers have developed home inventory tools that create PDFs that policyholders can upload into the cloud. Geico's SnapQuote app can deliver quotes faster on a mobile device than on a laptop, Hersh says.
"With State Farm's [Bloomington, Ill.; about $64 billion in 2011 revenue] Pocket Agent app, you can take pictures of an accident scene, record accident details and display your insurance card in several states that accept that as proof of insurance," Hersh adds. "The insurer has continually improved the app, adding location-awareness capabilities that aid in finding repair facilities, tow trucks or taxis."
These applications are welcome developments, but insurers shouldn't be complacent about the achievement of more obvious kinds of mobile capabilities, Hersh cautions. Because it has taken time for mobile to catch on, some carriers are in danger of becoming complacent, when in fact there are opportunities to leverage mobility that many insurers haven't begun to imagine, he says.
"Mobile will become increasingly important on an accelerated curve," Hersh adds. "Insurers need to keep up with an increased pace of change and develop a strategy."
Insurers must take mobile development out of operational silos and make it part of a strategy, concurs Vinod Kachroo, global head Industry domain consulting and CTO, insurance and healthcare, Tata Consultancy Services (Mumbai). However, carriers shouldn't aim at a mobile strategy per se, he stresses.
Insurers should consider mobile the "new normal," and they need to tighten up quality control on mobile app development and develop secure, bug-free, effective mobile apps for both internal and external uses. However, Kachroo insists, "You can't just look at mobility -- it's just a medium for delivering new business capabilities. You must aspire to become a digital enterprise."
Historically, insurers have invested a great deal in systems of record, but to compete in today's world they must shift their focus to systems of engagement, Kachroo advises. The insurance industry has tended to attempt merely to extend current capabilities when what it needs to do is to develop capabilities that enable new business models.
"There is a front and back aspect: The front is cool and jazzy, but you need suitable architecture and infrastructure on the back end to create an ecosystem that enables a more mobile world," Kachroo says. "It comes back to basics: How do you rationalize back-end process, integration and architecture to meet a new concept of engagement?"
P&C insurers have begun adopting new ways to capture data through mobile devices, such as Progressive's (Mayfield Village, Ohio; $1.3 billion in November 2012 revenue) work with Mitek Systems (San Diego) to gather unstructured data through image capture. In early 2012 Progressive introduced the ability for consumers to receive binding insurance quotes on their smartphones and upload mobile phone pictures of their driver's licenses, current insurance cards and/or vehicle identification numbers to generate binding insurance quotes.