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Mobile Technology in Insurance Industry April, 2013 BLOG POST


Mobile Technology Adoption providing Efficient Operational and Marketing Solutions Approximately, 119 million people in the US use smartphones, equivalent to a little over 50% of market penetration. Majority of the users are in possession of an Android, iOS, BlackBerry, Windows Phone or Symbian handset. Android (52.5%) and iOS (34.3%) are two the major smart phone platforms used in the US market.1 The high penetration of advanced mobile devices like smart phones and tablets would set customer and employee expectation for insurers to provide solutions over mobile technology space. Mobile technology can be used in various areas of application – starting from Service / Marketing to Claim Filling and across various insurance types; from Property & Casualty to Life. A study by Nielsen in 2012 suggests, half of the mobile phone users in U.S. use smartphones (up from 36% a year earlier). The insurance industry is one of the top adopters for iOS for enterprise mobility according to a study by Citrix for Q4 2012. Insurers adopt iOS at about 95% rate, while other mobility solutions on Android. Most of the deployments are on iPhones: insurers ranked sixth out of the top 10 iOS adopters in their use of the iPad. According to a Novarica survey, only a quarter of midsize insurers have implemented mobile device management (MDM) software for their employees who participate in bring-your-own-device (BYOD) access to their systems.

Mobile technology solutions applicability to insurance business processes • • • •

Customer service – Insurers can provide enhanced self-service tools and easy access to customer service through a mobile phone Marketing – Mobile phone apps are emerging as a critical marketing channel to reach customers Broker and agent sales – Apps can help speed up the sales and approval process Claims Filling – Providing faster and less expensive ways to initiate and complete insurance claims processes by connecting mobile device hardware and software solutions Value added services (VAS) – Insurers can establish greater association with customers to generate better loyalty by using mobile platforms to deliver VAS

About 12% of the top 100 life/annuity/health insurers in North America have started the implementation of mobile application for their sales force. For example, Aflac and The Hartford have offer marketing-related mobile applications. Aflac developed LaunchPad, which integrates video, animation, calculators and regulatory information into understandable and practical sales presentations. The Hartford loaded iPads with online presentations, marketing materials 1

Rethink Wireless: US smartphone penetration passes 50%

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and product information to free annuity wholesalers from having to bring along binders of marketing paperwork to client meetings.2 A Novarica study reported, more than 30% of insurers already provide some agent or policyholder capabilities via mobile, driven by massive adoption of tablets and over 60% of insurers will add new mobile capabilities for policyholders and agents in 2013.

Some examples of mobile technology offerings from leading insurers Liberty Mutual – Developed native apps to help users take images of damage, view policy details and add claims. The website offers mobile access for anytime, anywhere service. Geico and Alfa – They leveraged the mobile development platform, Kony, to deliver capabilities to both business-to-customer and business-to-enterprise. They also developed “mobile insurance agents” that can be accessed from any smartphone. State Farm – “Pocket Agent” which helps consumers to locate an agent, file a claim, make a banking deposit, or get road-side assistance. They have also developed a mobile website for easy access on the go.

Challenges for adoption of mobile technology3 • • • •

Security – Protection against viruses / malware, secure user data. Interoperability – Enable archaic back‐end systems to interface effectively with mobile applications. Customization – Requirement of custom solutions for superior mobile applications, as packaged solutions can be difficult to retrofit with disparate legacy systems. Environment – It can be a tedious exercise to scale up the existing production environments and back‐end systems to keep up with demand from additional mobile customer activity. Collaboration – Significant stakeholder interaction and collaboration across business units for delivering the necessary functionality within technology constraints. Involvement of all the necessary parties and gaining stakeholder agreement can be exhausting and time‐consuming – and it must happen early on. Budget – Completely rationalizing the budget necessary to start the use of mobile application by developing a business case.

Conclusion Mobile technology use can help insurance industry sales force to make better presentations and illustrations and also to close sales deals more comprehensively. On the other hand provide customers with more interactive solutions. Companies need to develop an internal (for sales 2 3

Society of Actuaries: Mobile Technology for Life Insurance Producer West Monroe Partners: Insurance Imperative – Mobility Strategies for Insurers

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force) and an external (for customers) mobile apps strategy by identifying what suits best each segment. The American Insurance Industry faces major challenges with cost control and competition for profitable customers – mobile technology use would empower insurers overcome these challenges convincingly and become more competitive.

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Mobile technology in insurance