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Insurance Mobile App Investment to Be Dominated by Distribution Capabilities

Enhancing distribution will be insurers' No. 1 investment area for mobile apps in 2012, with Tier One carriers behind most of the development, according to SMA research.

Insurance companies are investing in mobile apps for many reasons -- including billing, claims and policy service -- but the single greatest area for investment in mobile apps during 2012 will be distribution, according to new research by Boston-based Strategy Meets Action (SMA). "Both our survey and our discussions with insurers indicated that distribution was the No. 1 area for future investments in mobile technology," comments Mark Breading, a partner with SMA.

In its December 2011 report, "The Mobile Technology Universe: Current Usage and Future Opportunities for Insurers," SMA reports that 62 percent of survey respondents indicated plans to invest in distribution-related mobile applications in the coming year. The next-largest areas for mobile app investment were claims and marketing (see chart, below).

The majority of mobile app innovation is being undertaken by Tier One companies, which are less resource-constrained, according to Breading. "Many smaller insures are struggling in how to invest in mobile and social media," he elaborates. "It's not that they see these things as unimportant, but they have higher priorities, such as core system investment."

The SMA research, conducted between June 2011 and October 2011, is based on a survey of 46 insurers and interviews with more than 20 insurance company executives in North America about their usage and plans for mobile technologies. Participants included what SMA calls a "representative mix" of company sizes and all major lines of business.

Get Started With Mobile

Whatever their challenges, companies of all sizes and lines of business will need to provide distributors with at least baseline mobile capabilities, including basic horizontal apps that provide functionality such as voice communications, calendar and scheduling, Breading advises. Insurers in the mobile app vanguard, he says, are providing their producers with capabilities such as product information, needs analysis and quoting. "On the life side, illustrations should be the killer app for tablets," Breading notes.

Boston-based John Hancock, a unit of Manulife Financial (Toronto; more than $400 billion in assets), has issued more than 400 iPads to its distribution force and deployed during 2011 a variety of mobile apps, according to John Hancock VP Tony Todisco. "A few examples included a mobile application that provides interactive brochures videos and tools," he relates. "Another provides financial representatives with a portable and visually attractive means to generate illustrations. John Hancock also has plans to test out mobile applications for expense reporting and travel planning."

Todisco says the drivers behind what so far has been a very successful mobile distribution strategy in terms of adoption have been the desires to provide a tool that reflects the growing consumerism of technology and to reduce the amount of printed materials producers need to carry with them. "The iPad allows for a different sales experience [that producers] couldn't get with the laptop and stack of printed materials they brought to office appointments and presentations," he says.

In 2007, Columbus, Ga.-based Aflac ($20.7 billion in total 2010 revenue), a major marketer of voluntary insurance products in a worksite enrollment environment, began supporting all mobile hand-held and tablet interfaces on its Mobile.Aflac platform, according to Tony Huey, the carrier's second VP of IT. Mobile.Aflac provides policy, policyholder and claims information to support policyholder servicing, as well as product quoting, competitor analysis and sales performance information. In December 2011, Aflac redeployed its LaunchPad iPad platform, which provides field agents with marketing presentations, product overviews and training materials. LaunchPad originally was deployed in December 2010.

Huey says the capabilities were aimed at enhancing associates' ability to service existing policyholders while providing them with sales support tools that maximize their flexibility in reaching customers in urban or remote locations. According to Huey, Aflac has received positive feedback from a growing number of field force personnel using Mobile.Aflac and LaunchPad; the company also has enjoyed a reduction in the number of calls to its customer service center for policyholder-related inquiries initiated by its field force.

"We are now focused on providing our enrollment solution through tablet devices such as iPad and Android, as well as our current desktop/laptop solution," Huey says. "We expect that adding enrollment capabilities to accompany product overviews and quoting will drive even higher adoption and increase sales."

Success through mobile apps for distribution also brings challenges, suggests Hancock's Todisco, who notes that as the company progresses with its mobile strategy, security remains paramount. "We have security standards to safeguard sensitive data that cannot be compromised, including complex passwords, encryption of information and a 'poison pill' that can wipe out all information on a lost or stolen iPad," Todisco says.

Insurers' Future Mobile Investment Plans

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio

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