Mobile Implementation Strategy for Insurers

Transcription

1 1 Mobile Implementation Strategy for Insurers A proven approach to your unique mobile requirements [email protected] 681 Andersen Drive, Pittsburgh PA

2 2 Table of Contents 1. EXECUTIVE OVERVIEW THE CURRENT MARKET AND ITS DEMANDS Overview Trends in App Usage DEFINING THE VALUE PROPOSITION Business Goals and Targets Desirable Features for Agents Desirable Features for Customers Social Media THE BEST APPROACH Mobile Website vs. Native App Mobile Website vs. Native App Suitability based on Target Audience Backend Integration Integrated or Standalone? TURNING CHALLENGES INTO OPPORTUNITIES Budget Concerns Privacy and Security DECIDING ON A WINNING STRATEGY CONCLUSIONS REFERENCE... 16

3 3 1. Executive Overview The smart phone market has grown exponentially in the last few years. While the increasing adoption of mobile devices in the consumer market creates an opportunity, insurers and their agents are faced with a number of unique business and technology challenges in making the best out of the emerging technology landscape. Consequently, property and casualty insurers of all sizes understandably have a variety of questions when it comes to further developing a mobile presence: Should I adopt now or later? What is the expected ROI? Should I build a mobile website or a native app? Which mobile devices should I target? What is the ideal form factor? What features should I provide? (i.e. Policy Inquiry, Billing Info, Payment, Claims) How should the feature set be evolved over time? Which app should I focus on first customers or agents? Which lines of business? What are the hard/soft or hidden costs? What is the overall technical architecture? How much effort is involved in backend integration? What are the privacy and security implications when it comes to mobile devices? The purpose of this white paper is to adequately address these issues and to outline a strategy that provides property and casualty insurers with an opportunity to embrace mobile technology and at the same time benefit from having a mobile presence. This white paper reflects our insight and commitment to the business improvement prospects made possible by mobile app usage, and is structured to answer the Why, What, and How of leveraging mobile technology for the property and casualty market. Section 2 The Current Market and its Demands presents key findings from market research that reveals why insurers should seriously consider and adopt the mobile technologies. Section 3 Defining the Value Proposition outlines the most desired features that agents and policyholders look for in a mobile solution offered by their current or prospective insurers. Section 4 The Best Approach describes a unique plan that addresses the challenges and maximizes cost benefit and long term protection of investment. Section 5 Turning Challenges into Opportunities analyzes the challenges and opportunities insurers face related to budgetary concerns and how best to position their related strategy against the ever-evolving variety of popular devices, operating systems and API s. Section 6 Deciding on a Winning Strategy makes sense of the myriad choices related to a mobile strategy, and by providing characteristics of a good solution, explains why the ultimate choice must be flexible and dynamic.

4 4 2. The Current Market and its Demands 2.1. Overview The mobile device market has grown exponentially with the increased proliferation of smart phones owned by consumers. To illustrate this point, during the first quarter of 2012, Apple sold 37 million iphones, a 128% increase from the first quarter of i Furthermore, more than half of American mobile customers own a smart phone. A study by the Pew Research Center shows that 35% of all adults currently own a smart phone. Twenty five percent of these consumers use their smart phone as their main internet access device. Figure 1: Smartphone Ownership These figures are expected to continue rising. As the internet has become an integral part of how people manage their lives from online banking to social networking -- consumers will expect more viable options for conducting various transactions on their mobile phones. These statistics also reveal that mobile devices represent a market ripe with opportunity; a market that will be leveraged by various industries to meet the needs of their customers. This is already occurring in the retail space, as Wal-Mart, Best Buy and Target collaborate on a mobile payments company in the hopes of grabbing part of the emerging mobile-payments industry, which may expand to $170 billion in 2016 from $60 billion this year, according to Juniper Research. iii As recent research indicates, if an industry fails to take the mobile device market into account, it will be at a serious disadvantage in today s technologically driven economy. This is especially true for the insurance industry, which has been criticized for being slow on the mobile uptake. For example, one industry analyst maintains that 80 percent of quote submissions still represent scanned paper documents that are sent as attachments. iv This proves that the insurance industry has a long way to go and has untold opportunity before it toward mobility-based improved business performance. ii

5 Trends in App Usage And the opportunities abound. The increased proliferation of smart phones has brought with it the increased prevalence and usage of mobile apps. App usage varies amongst age groups; younger mobile users not only use apps more, but download more apps as well. The demographic uses apps 79% of the time, with a drop to 67% for people between the ages of 30 to 49. v These figures can also be broken down by platform. Android users keep an average of 35 apps on their devices, whereas Apple ios users have an average of 48. Sixty-eight percent of ios users use their mobile apps multiple times a day, with 60% for Android users. vi In fact, as one executive at Allstate put it, insurers shouldn t worry about developing apps for mobile use versus website functionality, and should instead concentrate on giving users as many capabilities as possible via their mobile devices. vii With the young adult demographic constituting the majority of app usage, insurers would be wise to capitalize on this trend. Researchers confirm that the next generation of consumers are already tech savvy and rely on technology to complete a wide variety of tasks. The proliferation of technology mobile or otherwise in the marketplace will continue to rise, and app usage is a major component of this trend. Insurers shouldn t worry about developing apps for mobile use versus website functionality, and should instead concentrate on giving users as many capabilities as possible via their mobile devices. 3. Defining the Value Proposition With an understanding of mobile technology s burgeoning growth, the good news is that property and casualty insurers on a global scale are now looking at all facets of this technology s usefulness. For example, the use of innovation such as mobile technologies to deliver value, promote ease of doing business and drive revenue were some of the hot topics at the International Insurance Society s 2012 annual meeting. viii 3.1. Business Goals and Targets In the United States, many insurers that are leveraging mobile technologies are seeing this innovation as a way to make it easier for their distribution network to connect with customers, obtain and submit information, and ultimately improve business performance. This is seen in companies providing their insurance agents with mobile devices. As insurance agents and salespeople become increasingly familiar with its benefits, the need for mobile app technology in this area becomes clear. Accordingly, as younger agents continue to comprise a greater percentage of an insurer s distribution network, they will be counted among the principal drivers of sales and revenue. As mentioned earlier,

6 6 younger mobile users are much more likely to be familiar with mobile apps and related technologies, so providing them with the tools to accomplish business performance goals is particularly important. Major insurers such as Allstate, GEICO, State Farm and Progressive have already recognized the value proposition set forth by mobile app usage, making it essential for insurers of all sizes to keep pace with mobile app advancements and usage in order to maintain a competitive advantage. Accordingly, insurers are well-advised to incorporate a mobile presence into their business model. Where should they begin? In general, the insurer s goals should reflect the needs of the specific insurance user. For insurance agents, this means using mobile app technology to enhance their sales targets, generate leads, and meet customer service demands with instant, constant and reliable connectivity. For customers, it means providing features that enhance user satisfaction and convenience. For instance, if a customer has been in a car accident, they can use the app to take pictures, provide details (either through texting/typing or via use of digital audio recording), initiate the claim s process, and even Major insurers such as Allstate, GEICO, State Farm and Progressive have already recognized the value proposition set forth by mobile app usage. submit a claim. Insurers can also benefit from non-customers using the app by providing a feature that allows potential customers to obtain a quote. As a marketing incentive, some insurers are supplying their agents with tablets/pads. Agents can have all relevant documents loaded onto their app (from customer information to marketing/sales materials) in an organized fashion, as opposed to carrying around hard copies of necessary information Desirable Features for Agents Successful property and casualty insurance agents pride themselves on high-touch customer service. Since their success depends largely on their ability to go where the business is, these agents rely on mobile technologies as a conduit for connectivity, instant data access and improved business performance. Understandably, a mobile app s feature set depends on the target users; agents and customers will have differing demands. According to a recent survey of agents, 25% said that getting leads were among the biggest challenges they faced in their job. ix However, access to leads is but one of many benefits made possible by advancements in mobile technology, as insurers recognize the power of mobile technologies. The latest secure mobile self-service apps can integrate with policy, billing and claims administration systems to facilitate agent access to pertinent documents, policy details, and customer information. Therefore, a mobile app should be developed around these particular needs. Agents are also aware of the power behind a mobile strategy. In a report issued by the Agents Council for Technology (Independent Insurance Agents & Brokers of America), mobile technology and mobility were listed as must do issues for 2012 and beyond. x

7 7 Below is a list of features that can be expected of a mobile app for agents. Insurers should prioritize those features most desired based on individual needs of the agent and overall needs of their specific company. Features Customer Search Book of Business Policy and Billing Summary Policy and Coverage Details Documents and ID Cards Claims Status Inquiry Submit Claim Ability to make policy changes/endorsements Quick Quote for Auto/Home Application Status Inquiry Online Payment Update Contact Info Tasks and Alerts Commission and sales information Figure 2: Feature Desirability (Agents). 1-5 Scale* Desirability 3.3. Desirable Features for Customers Of course, agents aren t the only users who would benefit from and demand a mobile presence. According to Angelyn Treutel, president of SouthGroup Insurance, With web-based and mobile-based capabilities, our industry needs the ability to extend real-time interface capability for consumers to provide a seamless information exchange among carrier, agency and consumer devices. xi As customers demand more from those with whom they conduct business, insurers will have to leverage technology (especially mobile) in order to achieve continuing customer satisfaction. Insurers that provide mobile apps that allow the customer to complete a variety of tasks, such as submitting a claim or viewing their policy, can expect an increase in customer satisfaction as a result. It follows that investment in an app that allows customers to utilize the technology they have at their fingertips to the greatest extent possible would be a good one for insurers. By looking at the list of features, it becomes clear that before smart phones became so widely used, many of these tasks would have taken an extended period of time to complete. The convenience that technology affords to consumers is a factor being leveraged by diverse industries, and mobile applications are just one part of that technological trend. Customer-facing apps can also benefit prospects. And apps currently in use by insurance companies also benefit those who are not customers of the insurer. For instance, prospects can use the app to get a quick quote, or find a nearby agent.

8 8 Table with features provided follows: Features Find an Agent Policy Inquiry, Policy Summary Policy and coverage Details Documents and ID Cards Billing Inquiry Online Payments Policy Changes Accident/Roadside Help Find Tow/Repair Shops Take Accident Pictures Submit Claim Claims Status Inquiry Quick Quote for Auto/Home Update Contact Info Figure 3: Feature Desirability (Customers). 1-5 Scale* Desirability 3.4. Social Media Forward-thinking insurers are also incorporating social media tools into their mobility models. This may be in response to the data provided below; of the many and varied uses that mobile apps offer, such as games, bills/transactions, and now, social media, it s social media that has now taken the lead in app category usage by consumers (a position previously held by gaming apps). Games initially lead app category usage, but now social media has replaced gaming, with a significant jump from Q to Q One example of an insurer that has leveraged its mobile platform to include social media is Allstate Insurance Co., Northbrook, Ill. The company designed its mobile app strategy around extending connectivity to its customers, delivering relevant, helpful information to their mobile devices, and tying that entire effort to its social media strategy. xii

9 9 Figure 4: Social Media App Consumption xiii How could an insurer best leverage the advantages of social media/networking with the benefits of mobile apps? This can be illustrated with two further examples, which fall broadly under generating sales and customer satisfaction. People reveal a significant amount of information about themselves through social media websites. While many of these pieces of information might seem initially disparate (ranging from age to political affiliations to favorite foods), these pieces of information can be used to generate sales and marketing initiatives that fine-tune an insurer s target market. Researchers confirm that using both social media tools and data mining could result in the acquisition of critical information about prospective customers, and insights into improving relationships with current customers as well. Well integrated apps can enable agents to instantly connect with all of their customers by leveraging social media tools. Agents could send general updates (perhaps through an integrated Twitter feed), or post status updates on Facebook regarding changes in policy. There is no one-size-fits-all approach, but there is an approach available to suit the particular needs of an insurer, and at the insurer s pace. Since a significant amount of these mobile users are young adults representing the next generation of customers, successful insurers are already incorporating the use of social media applications in their business models.

10 10 4. The Best Approach Though market research indicates compelling reasons for insurers to develop a more comprehensive mobile presence, there are still challenges in designing mobile solutions. For instance, content and structure of the information presented on a mobile device has to reflect varying screen sizes and touchbased user interfaces. The approach has to take into consideration response times, functionality, and optimization for data transfers over cellular networks. Furthermore, it has to support popular mobile platforms and meet rapidly growing customer expectations. Flow and functionality of web-passed portals will not work in a similar fashion, and cannot be simply copied. There are many options and approaches to delivering mobile solutions to your customers. The good news is that there is no one-size-fits-all approach, but there is an approach available to suit the particular needs of an insurer, and at the insurer s pace. 4.1 Mobile Website vs. Native App Figuring out how to properly utilize mobile technology is of primary concern. A company that already has mobile web presence might be uncertain of entering the mobile app market; perhaps they would see it as redundant or unnecessary. First, it is important to cover the differences between a mobile website and a native app. A mobile website operates through a browser on a device. If one goes to a website on their device, it will be recognized that the user is using a mobile device, and the website will adapt. This has some limits; HTML compatibility and functionality. However, it is instant (one need not search, download, and install an app to access the information they need) and it s cheaper to build. However, a native app has a richer set of features, is tailored specifically for the tasks that the user needs, and has full functionality. Furthermore, the mobile website requires internet connectivity. The native app can be used without internet connectivity, and pertinent information that is entered would be stored on the mobile device. For instance, if a customer is in an emergency, and needs to start gathering information on their phone, the app will allow for that. Of course, internet access will be needed later to submit the information via the API. Regardless, the functionality of the app allows for the necessary emergency data to be stored on the phone, through the app, without the need of an internet connection which would be necessary if a mobile website was the only option. Following is a chart that compares the features of mobile web sites and native apps, and works to address the concerns of the insurance providers when it comes to the decision to use both mobile web sites and native applications.

11 11 Feature Mobile Website Native App Cost Cheaper to build Costs more User Experience Acceptable The best possible, rich, tailored experience Performance Acceptable Maximum possible device performance Access to native device functionality Limited Full Development for various platform Device Independent Platform specific Reach and User action Ubiquitous, instant Requires search, download and install Requires promotion Not needed Needed Launched from a link (sent via etc.) Natural, easy Requires additional steps App Store submission and approval process None Involved Issues with HTML5 incompatibility Issues exists Not applicable Figure 5: Mobile Website vs. Native App Comparison** While the native app costs more, it has many features that are considered extremely important for insurance agents and customers. In particular, the user experience and performance stand out with the native apps. Insurers would benefit from both; as a comprehensive mobile presence is required to further their business in the technological landscape we live in Mobile Website vs. Native App Suitability based on Target Audience Below is a table that compares suitability between the mobile website and the native app. Target Audience Mobile Website Native App Prospective Customers Active Customers Agents Internal Users Field Agents (Ex: Claims Adjuster) Figure6: Target Audience Suitability** Depending on the target audience, the findings indicate that insurance providers use both the mobile website and the native app. Both have advantages, and it is not a simple either-or situation. For both prospective customers, the mobile website is an optimal approach. On the other hand, agents have an active business relationship with the carrier and ease of doing business is paramount. Therefore, the app is also well suited for agents. Using the app is a normal part of doing business, and agents can

12 12 benefit from the richness and power of native apps. However, there are challenges to maintaining the apps for different platforms and dealing with app store submission, testing, and approval processes. Hybrid approaches also exist, where mobile websites can be converted and deployed as apps, although there are some limitations to this approach Backend Integration Integrated or Standalone? Due to security concerns, corporations are unsure whether or not to integrate mobile apps with the corporate backend or make them standalone with their own silo in order to better protect the backend data from access/updates from the mobile devices. While this isn t a problem initially, as customers begin to use mobile devices as their main application access device (rather than computers), corporations will need a way to transition and allow self-service over mobile apps as they have over the web. 5. Turning Challenges into Opportunities 5.1 Budget Concerns The costs associated with the development of mobile technologies are sometimes tied to a monolithic list of internal and external resources that obscure the solution s potential simplicity. For example, unlike web development, which is centered on HTML and related web standards, mobile development targets mobile devices that use a variety of different hardware platforms and operating systems with their own languages and API. This complexity is illustrated as follows: iphone apps are written in Objective C, Android apps are written in Java using Google API s, and Windows Mobile apps are written in C# using Windows Mobile SDK. The number of languages and technology expertise a corporation requires to create apps for even the most popular devices thus creates huge cost and resource concerns. However, with the right solution provider and the technology to help bypass additional or worrisome steps, what initially may appear as a relatively expensive proposition can turn into an effective enterprise solution. And considering the internal (enhanced productivity of workers and agents) and external (increased branding, customer-facing and business performance) benefits provided by mobile technology and related apps, property and casualty insurers are quickly coming to the realization that omitting this emerging technology from the business plan represents a far greater expense. 5.2 Privacy and Security The costs associated with the development of mobile technologies are sometimes tied to a monolithic list of internal and external resources that obscure the solution s potential simplicity. Another legitimate concern that insurers might have in regards to app development is privacy and security. Especially in the business realm banking, finance, insurance both providers and customers will be concerned about sensitive data being vulnerable to outsiders. In banking, these apps have the ability to access pertinent account information. In insurance, these apps have critical policy information that needs to remain confidential.

13 13 Therefore, security and privacy issues should be thoroughly addressed in the design and implementation of mobile apps to prevent identity thieves and fraudsters from gaining access to confidential information by stealing an individual s smart phone or tablet. Unfortunately, there are many apps in the market that retain these vulnerabilities. This is especially important to address because access to confidential client information could lead to mistrust from customers, bad publicity and brand vulnerability, all making it difficult to maintain business sustainability. Clearly, while the theft of one s smart phone or tablet would be damaging due to the relatively high prices these devices command on the market, the information that is stored in them is often times much more valuable. Despite these concerns, the app market has grown at a rapid pace, largely due to both providers and consumers voicing these concerns, and to developers responding to the demand. Developers can further respond via encryption in order to prevent security and privacy breaches by unauthorized users of mobile devices. 6. Deciding on a Winning Strategy As insurers battle mandates to grow organically while reducing costs, the pressure for a quick fix is mounting, especially within the mobile arena. Fortunately, insurers have options for a winning solution that will allow them to incorporate mobile technologies into their business plan, adding features and functionality and the benefits of a customized look and feel at their own pace. Following are some considerations insurers should take into account when formulating their unique mobile solution. Based on the research, it is evident that the options are many, and the decisions insurers need to make are not clear cut. For example, once the decision is made to move to a mobile strategy, carries need to focus on the devices to be targeted. Based on the unique needs of the insurer, mobile devices across the board can and should be targeted. Based on the market trends for each device and its respective OS, insurers can determine which device is best. For reference, the following shows the OS market share of smart phone sales. Figure 7: OS Share of Smartphone Sales xiv

14 14 Additional decisions revolve around a mobile website as opposed to the mobile app option. If the mobile website option is the insurer s choice, this path still allows for further options, should the insurer choose to later take advantage of the additional features and richness of the mobile app. Therefore, the correct solution strategy should be flexible and allow the insurer to adapt based on changing circumstances. In addition, the strategy must try to maximize return on investment in the short and long run. Characteristics of a good solution strategy: Good overall device coverage. Good user experience. Cost effectiveness without sacrificing coverage and experience. Simple and elegant approach that is flexible and scalable. Quicker time to market. High return on investment. Jarus has formulated a solution strategy that meets these criteria and provides an elegant way to a richer mobile presence that is achieved in an incremental fashion. This approach provides a good balance between costs, device coverage and user experience. In addition, using this strategy, Jarus has built two flexible and adaptable mobile applications one for agent self-service and another for customer self-service. Insurers can provide the self-services capabilities to their agents and policyholders in a very short period of time. More information on these products are provided in Appendix A and B. Jarus solution strategy follows four core philosophies: 1. Separation of concerns. 2. Service-oriented architecture. 3. Maximize reuse. 4. Incremental evolution. These four core philosophies can be summarized as follows: First, we will separate the front-end (user interface) concerns from the back-end (service) concerns. This can be achieved by creating a clear physical separation between the front and back ends and by defining a clean and formal interface definition of the services by the back end to the front end. For example, the following services must be implemented once and used multiple times in various scenarios: customer search, policy inquiry and create quote. Any services that have been created for internal or web development must be adapted and reused again for mobile. We recommend exposing these services as RESTful web services using JSON. For the front end, we recommend a unique approach that achieves the proper balance between cost, coverage and user experience. Before we present this strategy, it would be useful to revisit the key findings from the market research. For instance: while agents would prefer mobile apps over websites, as they need to access these functions frequently, prospective customers are not likely to install the app on their mobile

15 15 devices until they become a customer. This means that to get good overall coverage, insurers must consider creating both mobile websites and apps. Authentication and roles: for example, a user can start with a basic book of business and customer search, and eventually add more desirable features such as roadside assistance and sales generation tools. This stepped approach gives the ability to get user feedback and provides ample time to test any issues and meet user expectations. Approximately 80% of the smart phone market is dominated by iphone and Android devices. Based on market research evidence, the strategy that provides the maximum cost benefit is as follows: o Create the mobile website and app using portable technology. There are certain technologies in the marketplace that leverage standards such as HTML5 and CSS3. With these, it is possible to create one implementation that can be deployed as either a mobile website, or compiled into native apps for a large number of mobile devices. While these applications are not perfect, when carefully built, they will provide a rich experience for most of the user scenarios for the majority of the devices. o Once accomplished, it is possible to extend the experience for the iphone and Android by creating two native implementations based on the same UI design and reusing the backend services. o These two steps ensure and fulfill the following: Fully enabled and deployed mobile website. Fully native mobile apps for iphone and Android devices. High quality native mobile apps for the remainder of the devices. 7. Conclusions To summarize, here are the key findings: The mobile device market has grown exponentially in recent years. Devices such as smart phones and tablets are increasingly becoming consumers preferred way of conducting day-to-day transactions. Several industries are responding to this trend by increasing their mobile presence, through mobile web or app development strategies. Property and casualty insurers have recently increased their mobile presence as well, particularly in equipping their agents with devices in order to improve both ease of doing business and productivity and to drive sales. Insurance customers benefit, with mobile apps capable of providing a wide variety of tasks, available instantly. When making an informed decision between mobile web and native apps, insurers should take into account their organization s core business objectives and target market. Insurers would be wise to ask what the next step would be, given all this information and research. Mobile apps increase productivity amongst company employees and increase satisfaction amongst customers. Insurance providers have already started moving toward integrating a mobile presence into their business model.

16 16 A comprehensive mobile presence both in the mobile website and mobile app realm is necessary to ensure continued success for an insurance provider. Therefore, based on the market research, insurers would benefit from incorporating both the mobile website and mobile apps into their business model. The solution strategy outlines an incremental approach that has high quality user experience and is feature rich, while being cost effective. 8. Reference i Kumparak, Greg. Apples Q1 2012: $46.3B in Revenue, 37M iphones and 15.4M ipads Sold. TechCrunch. January 24, ii Aaron Smith. Nearly Half of American adults are smart phone owners. The Pew Internet and American Life Project. March 1, iii Matt Townsend. Wal-Mart Joins Target in Forming Mobile-Payments Network. BusinessWeek.com, August 15, iv Chris McMahon. Gradually, then Suddenly. Insurance Networking News, July 1, v Nearly Half of American Adults are Smart Phone Owners. vi Choney, Suzanne. Apple, Android Phone Users are the Heaviest App Downloaders. TechnoLog on MSNBC. vii Alex Vorro. Accelerating Business in Motion. Insurance Networking News, October, viii Strategies for Global Growth Insights from Leading Insurance Executives. International Insurance Society. ix Davidson, Andrew. Apps Could Help Insurance Agents Increase Productivity. Comparemedia. April 21, x 2012 Key Trends and Industry Must Do Issues, Agents Council for Technology, May xi Angelyn Treutel. Agency and Carrier Interfaces, Part III. Insurance Networking News Blog, June 29, xii Alex Vorro. Accelerating Business in Motion. Insurance Networking News, October, xiii Loftus, Thomas. New Study Shows Boom in Mobile Social Networking Usage. CIO Journal of the Wall Street Journal. April 30, xiii Perez, Sarah. ios Market Share Up from 26% in Q3 to 43% in Oct./Nov TechCrunch. January 9, *Qualifiable levels based on documented discussions with insurers. **Compare/contrast information between mobile website/native app based on feedback from insurers.