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Mobile Adoption Rate Still Low Among Insurance Customers

FICO research finds that only single-digit percentages of insurance customers prefer using a mobile app to do business with their insurer.

Kelly Sheridan contributed reporting.

Insurers are staying the course in opening up mobile capabilities to their policyholders despite relatively low adoption rates. A survey of more than 2,000 consumers by FICO found that only 8% preferred to manage their policy through a mobile app or mobile web site, 7% preferred to find quotes that way, and 4% wanted policy-related alerts through a mobile channel.

But when it comes to the youngest customers -- who may have the longest lifetime value -- mobile adoption rate is greater than that of their older counterparts. For example, 16% of respondents age 18 to 24 felt an SMS from their insurer would be most convenient, which was nearly twice the rate of 40- to 54-year-olds.

"While not everyone has started using mobile devices to interact with their insurance providers, those who do report a significant increase in customer satisfaction," says Russ Schreiber, manager of FICO's insurance practice, in a statement. "For example, alerts that keep customers up-to-date on their claims are growing. Insurers that create this type of dialogue receive higher recommendation ratings, which often lead to improved sales."

FICO contends that mobile is underused by insurers, with only 9% of respondents saying they've ever used a smartphone to manage their policy and two-thirds saying they haven't intereacted with their insurers at all on the platform. But there are some insurers making big bets on mobile. Corporate Insight's recent Monitor awards found some insurers, like USAA, Geico and Esurance, were paying attention to the leading edge of mobile use trends and incorporating capability like voice-recognition into their apps to capitalize on the increase in use of mobile software like Apple's Siri personal assistant.

[A Q&A with Esurance's customer experience leader]

"It allows users to streamline the process, and since they're on the mobile device on the go, it makes sense to expedite navigation," says Lauren Roncevic, Corporate Insight analyst.

FICO recommends insurers take an innovative approach to mobile development, using analytics to identify use trends and offer value adds like location-based services and severe weather tips. That is echoed by others in the industry, including Aimee Lucas, VP and customer experience transformist at Temkin Group.

"More consumers will have smartphones and tablets, and these devices will have apps that enable them to do more things wherever they go," Lucas says. "To make these experiences work, companies will need to consider how mobile integrates into their product offerings and entire end-to-end experience."

[The mobile employee -- as well as the mobile customer -- are here to stay. Is your insurance company prepared? Learn how to set up and maintain a mobile infrastructure that can support today's needs and tomorrow's expected mobile demands. Attend the From BYOD to 802.11ac: How to Build A Next-Generation Mobile Infrastructure session at Interop 2014 in Las Vegas, March 31-April 4.
You can also REGISTER FOR INTEROP HERE.]

Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio

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Nathan Golia
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Nathan Golia,
User Rank: Author
3/24/2014 | 8:00:57 PM
re: Mobile Adoption Rate Still Low Among Insurance Customers
Thanks Phil. Mobile bill presentment is an area we are seeing insurers invest in for sure. That's where the people are Gă÷ it's a matter of helping them use their preferred channel
Nathan Golia
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Nathan Golia,
User Rank: Author
3/24/2014 | 8:00:12 PM
re: Mobile Adoption Rate Still Low Among Insurance Customers
Thanks Derek. I think that depends on how people continue to interact with their service providers overall. We may see a future consumer who would rather respond to an SMS or app alert that their bill is due in order to pay it rather than set up a recurring EFT or (of course) mail a paper bill.
derekspere
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derekspere,
User Rank: Apprentice
3/18/2014 | 12:56:14 PM
re: Mobile Adoption Rate Still Low Among Insurance Customers
Mobile based apps will catch up only if the related transactions are something that you need to do "any time in real-time". Retail banking, paying bills, spot shopping, stock trading etc comes in that category. Insurance is not something that is typically done in "real time". People typically plan for it and schedule the payments, similar to their investments and taxes and mostly prefer to do it at the comfort of their home on a proper screen. I don't see it catching up much beyond say 10-15% of penetration among constantly mobile people such as salesmen and consultants. Of course offline transactions such as SMS updates for premium due date, payment confirmation etc will happen.
Phil Spradlin
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Phil Spradlin,
User Rank: Apprentice
3/17/2014 | 5:57:28 PM
re: Mobile Adoption Rate Still Low Among Insurance Customers
Mobile can not only drive customer satisfaction, but also cost savings from turning off the paper policy and bill documentation. The top reasons why policyholders still receive a paper bill are to remind them to pay and as a record of their finances. Alerts combined with mobile access to view the bill and turn off the paper bill are required for success. To maximize your mobile success, check out this presentation: http://www.youtube.com/watch?v...
Nathan Golia
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Nathan Golia,
User Rank: Author
3/13/2014 | 5:14:38 PM
re: Mobile Adoption Rate Still Low Among Insurance Customers
Yes, I think a way to look at all the research and investment is that companies benefit greatly from appearing progressive and forward-looking when it comes to customer interaction. So what if many customers don't use mobile every day? At least they know it's there if they want it.
Kelly22
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Kelly22,
User Rank: Author
3/12/2014 | 7:42:25 PM
re: Mobile Adoption Rate Still Low Among Insurance Customers
Interesting that USAA and Geico were also in the top 3 for the Temkin Experience Ratings for customer satisfaction. While mobile adoption rate among customers is low now, the insurers focusing on mobile trends now will ultimately be ahead when more younger consumers start to purchase insurance.
Guest
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Guest,
User Rank: Apprentice
3/12/2014 | 6:50:21 PM
re: Mobile Adoption Rate Still Low Among Insurance Customers
It's a
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