In
a recent Gartner study, more than two-thirds of IT leaders from US and European
insurers have declared that they have a formal digitization strategy in place. These
leaders have understood that operational efficiencies and better customer
experience are the main drivers for digitization and hence digital maturity in
Insurance sector will be of high importance.
This
article will touch upon only the aspects of mobility in the Insurance sector. However,
it is well known that the other digital forces such as Big Data, Analytics,
Social and Cloud are as important for the insurers as mobility for their growth,
time to market, customer retention and sustainability.
Gartner
predicts that Enterprise IT spending by US Insurance industry (Health and
P&C) on mobile devices for FY14 will be around USD 1450 Million. As
competition in the Insurance sector intensifies, it is natural that cost
savings and customer retention become extremely important thereby forcing
insurers to look for different channels such as mobile and social media. Using
these channels can help insurers drive sales, reduce costs and maintain
profitability. Moreover, changes in the customer behavior as well as
preferences such as pervasive computing, advancements in technology in mobiles
or tablets and usage of internet for their decision making and purchasing have
been critical enablers in forcing insurers to think differently and adopting
mobility as a means to align to their goals and business objectives. In P&C,
a policy can be sold via mobile channels using which customers can view product
features and compare competitor product prices. However in Health Insurance,
customer still prefers the traditional way of selling through agents as it
involves long term commitment for the customer.
Opportunities
Based
on a report, the general insurance industry trend shows that policy
administration will have one-fifth of the total IT spend and insurers are
interested in plug and play solutions offered by IT vendors. Solutions in Sales
& Distribution for P&C insurers will see a maximum rise in IT spending
share specifically in the area of SaaS.
There is speed to market pressures for Life Insurers as older systems
cannot meet demands.
Among all Insurance
functions, Distribution holds around 22% whereas Document and Content
Management holds around 15% of IT adoption. Growth and retention of customers
as well as technology focus on regulatory compliance have become key areas for
insurers to focus on.
SaaS, BYOD upgrade, core app
development and website consolidation/responsive are some of the areas where
recent initiatives have been taken or are the focus areas for future investments
for insurers.
Supporting insurer’s mobility initiatives
On a broader level, mobility
in the insurance sector can typically provide value in either the B2E segment
or the B2C segment.
For example, in the B2E
segment, the sales agent can be enabled with a field service mobile
application, that can help them in quick policy sales closures thus meeting their
high revenue per salesperson KPI.
In the B2C for example, the
consumer can be enabled with quick claim submissions. Insurers who focus on
speeding up the complete insurance distribution process while identifying
business processes in the value chain that can be mobile enabled and providing
better customer service can achieve a high customer satisfaction KPI.
Most insurers try to strike a
balance between short term risks and long term rewards. Their success is based
on the kind of product they are offering, the kind of right sales people they
are hiring and also the kind of risk management they are adopting. Service
companies must try to identify the areas where mobility can help insurers
achieve these objectives.
Figure 1 depicts the Insurance Value Chain to KPI mapping. It
Figure 1
To summarize, the key KPI’s
for an insurance industry include:
- Average cost per claim
- Customer Satisfaction
- Top Brokers in Sales Revenue
- Average time to settle a claim
- Effectiveness of sales agents to meet the sales target
- Claims Ratio – Number of Claims Vs Earned Premium
- Percentage of Sales Growth – Policy renewals and new policy sales
over a set period
- Profit generation on each dollar of earned premium
Services industry should focus
their efforts to build mobility products or enter into service engagements that
focus on meeting the above KPI or metrics.
How can vendors support the B2C segment in the
Insurance Sector?
Ø Leave your wallet at home – Customers can get quotes, file claims, pay bills,
save documents, e-procurement – enabling adjusters to immediately order
replacement parts and request service for the customers, making the
claims-handling process more efficient
and eliminating the transfer of money direct to customer (payment handled directly
with the goods or service supplier from the insurer)
Ø Provide quotes and illustrations – Many insurance companies are
easing the way quotes can be provided. AXA
released a smart phone/tablet optimized quotation engine enabling its customers
to get and retrieve insurance quotes instantly.
Ø Enable customer self-service – Allow customers to do any mobile transaction which
they could normally execute through a website. For example, a mobile app that
allows customer to view bills, make payments, apply for claim etc.
Ø Help customers report and track claims – With the help of GPS, customers can do the right thing
in right sequence such a s take the photos of accident or use the GPS to find
the nearest tow truck or take pictures of the cars involved in the accident ,
which will inform all insurance partners of all parties involved.
Ø Provide alerts and reminders - Real time reminders about financial news, weather
warnings, bill payment
Ø Offer human assistance – MyClaimsApp lets customer speak to someone immediately
or route customers who need support from the call center in a more efficient
and visual way.
Ø Encourage careful behavior – Mobile services encouraging careful behavior and
create awareness about why customers need to insure for risks. For e.g. TCS
GoSafe --- Interpolis (Dutch P&C), provides weather and road conditions
based on the smartphone location. Steer Clear mobile app helps younger driver
learn safe driving behavior and stay aware of hazards on the road.
Ø Help customers understand their long-term needs : John Hancock's cost of care calculator app helps
customer see the average current local costs for long term care in various
settings and cities across US. Calculate future care needs and potential costs
that they could incur on an inflation-adjusted basis.
How can vendors support the B2E segment in
the Insurance Sector?
Ø BYOD – Employees bring their own devices with the companies
offering support in the form of access to their corporate systems. Insurance
companies will need help from vendors in mitigating security risks such as
inappropriate usage or loss of corporate data. Opportunities for vendors in these areas
include core mobile app development, selling or configuring products in the mobile
device management (MDM) space, selling or configuring products in the mobile
application management (MAM) space and constructing or selling Mobile
Enterprise Application Platform (MEAP)
Ø Geospatial
data for underwriters – Insurers can
be provided with location data and supporting information to influence
underwriting decisions. They provide better understanding of the geography in a
given area to help insurers better understand and manage the implications of
natural disasters and other localized phenomenon
Ø Telematics
data in underwriting – These devices
are capable of capturing a wide variety of data including location and speed as
well as more detailed information such as when the brake was pressed and with
what intensity etc. Smartphones are potential telematics device. This system is
mostly associated with pay as you drive type car insurance schemes and might
benefit those insurers who look for long term customer contracts
Ø Product
Configuration – Mobile apps that speed
up the definition and introduction of insurance products in the market through
push notifications is the current trend. Quick introduction of these products
help insurers to capture market share before it can be copied by competitors.
For e.g. TCS iAgent TM has the ability to get
real time marketing feed of product features and catalogs thus helping agents
to showcase the same to customers quickly
Ø Enabling the
insurance agents – Innovative apps
that enables insurance agents and brokers to perform sales in real time can
have a positive impact on the sales & marketing KPI. It increases
conversion rates and the consistency of the execution of sales process by
automating the client discovery dialogues at the front end of the sales
process.
Some
examples on enabling sales agents:
·
Progressive mobile app allows customers to take picture of the car license
plate and get the technical details and also allow them to take a picture of
the driver's license to get the driver details to complete the application.
·
Agents using Transamerica's Life Sales app can
generate quotes, review, compare, edit, email, quote estimates, browse
marketing resources with the latest sales ideas, flyers, brochures, product
guides, presentations and videos.
·
AIA Group iPOS program wherein 50K employees where equipped with an app
which could perform every step of the sales process – from sales introduction
to policy submission
·
TCS iAgent Mobile TM is a
one stop shop wherein insurance agants can get business, product, marketing and
customer data through one single app
Other areas
where vendors can focus on supporting insurers:
Staff Augmentation- Many insurers have their own
mobility development group, where core mobile app development is done. Vendors
can help the insurers by providing resources in HTML5, CSS3, Javascript, iOS,
Android, Windows 8 and Blackberry technologies.
Mobile enablement/responsive
design – Many
insurers maintain two sets of content, one for mobile and other for website.
This can be reduced to maintaining just one set of content and source code
which will work for both the m site and website. For example, AXA launched a
new website which uses adaptive layouts, font resizing and image scaling of
responsive design to deliver an elegant, readable experience on any screen
being used. Text columns, logo, menus, images and videos would be re-organized
or re-sized according to screen size and scale.
Mobile
Quality Assurance – End user experience
and time to market is a key factor when launching a product. Hence using QA tools
that have the capabilities of automation is the new trend. With so many mobile
platforms, versions etc, it is imperative that Insurance companies focus on
adopting these tools. Edge case testing, simulating connectivity and usage
parameters of the end users are necessary – validating graceful feature
degradation as signal loses strength, traumatic event handling if devices are
dropped, and inadvertent interaction are few areas to focus on. For e.g. mobile
testing tools such as Perfecto Mobile, TCS Hy5 Test TM, Fone Monkey etc. are products that insurers can leverage
to bring quality mobile products into the market quickly.
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