A Mission With Momentum: Mobile Apps for Insurance

Featured Article - Winter 2013 | By Gina Lauer

MOBILE TECHNOLOGY has infiltrated the work and play lives of a growing swath of consumers who are doing everything from checking sports scores to delivering dazzling client presentations, so it’s no surprise that insurance companies and those selling insurance are tapping into the power of mobile apps.

Consumers have grown accustomed to scheduling, planning, and even buying through their mobile devices, and that hasn’t gone unnoticed by insurance companies.

“The last time I checked on iTunes—between Christmas and New Year’s—I came up with 1,900 insurance apps either offered by carriers or vendors, something geared to the insurance industry,” says Ellen Carney, a senior analyst at Forrester, a global research and advisory firm based in Cambridge, Mass.

The mobile-enabled population is growing. Forrester recently reported that smartphone users will reach 1 billion globally by 2016. By then, there will be 256 million smartphones and 126 million tablets in use in the United States alone.

Kevin Kennedy, AXA Equitable

Insurance agents and financial advisors who sell insurance are also becoming more proficient in the use of tablets and mobile apps. According to a 2012 technology survey by Financial Planning magazine, half of advisors now own a tablet. And carriers seem to be taking notice of that.

“Something happened in 2012 that was very interesting, and I call it: Insurance carriers have fallen in love with the agents again,” says Carney. Regardless of what’s happening with online or mobile strategies, agents are still an important element in the customer acquisition and retention side of the business, she adds.

The mobile landscape in insurance

The insurance landscape is large and diverse, and some insurance products have migrated more quickly to mobile devices. Some companies have also found ways to take advantage of phone features—such as the camera—to give their apps more oomph. Progressive, for example, has an app that allows users to take a picture of their driver’s license and vehicle identification number (VIN) to help generate an insurance quote. Other companies are boasting about their apps via the TV screen: Geico’s Maxwell the Pig, seated on an airplane, pays his insurance bill through his mobile app.

“On the property and casualty side, you’re going to have much more consumer-oriented apps,” says Karen Monks, an analyst in Celent’s North American insurance practice. “You can do claims, report a loss, submit photos, keep a tally of what’s in your home for insurance purposes, get information on vehicle repair places,” she says. Not all apps are for customers only.

But for the most part, mobile adoption in the life insurance and annuity area appears to be spotty. In a Celent report, “North American SnAppshot, Life Version: Mobile Apps for Life Insurance and Annuity Consumers,” released in February 2011, researchers reviewed the platform stores and websites of 11 life insurers.

Some wholesalers took the technology to heart, and started using iPad apps to make their presentations ‘really pop with advisors.’ Then something happened: ‘Productivity went up significantly.’ — Kevin Kennedy, AXA Equitable

In a release about the report, Monks noted: “We see life insurers with apps falling into a spot somewhere between laggard and cautious investor in terms of development, but most life insurers are not even on the chart because they do not have apps.”

Research firm MyPrivateBanking, in its global report “Mobile Apps for Insurance 2012,” also found that adoption of mobile apps in the insurance industry “is still at a very early stage, showing patchy and inconsistent deployment.” The report benchmarked more than 100 apps offered by 30 leading insurance companies worldwide.

When it comes to life insurance, Celent’s Monks points out, “You buy it once, for the most part.” Therefore it doesn’t lend itself to a transactional mobile app. In addition, consumers don’t see a big need for a life insurance mobile app.

There are other issues, too. Even if life insurance companies want to come up with a consumer app to promote their name, “they’re stymied by the back end,” Monks says. “Their back office is still in the non-open technology format. It doesn’t accept all kinds of data that might be coming in a format that they don’t currently have.”

From the producer end, life insurance apps can provide more benefit: direct access to marketing materials and accounts, reduced errors when sending data electronically, enhanced customer engagement.

“It’s only been recently where you have an illustration application that can be accessed from a website,” Monks notes. “That’s fairly new—in the past 3 to 4 years.”

So are people really using these apps, and which ones are they using?

Ellen Carney, Forrester

“What we’re discovering is that the mobile apps for insurance are mostly being used for education and claims reporting,” says Jeff Chesky, president and CEO of Insuritas, an insurance agency outsourcing firm. His company is focusing on creating insurance portals on bank and credit union websites to get customers comfortable with shopping, comparing and buying insurance on the Web. “We think that will be a critical first step to the adoption of mobile devices for purchasing as well.”

Many of the apps for producers or advisors in the life insurance realm are built to relieve them of the reams of paperwork they’ve been toting around in briefcases (and boxes). Some of the life insurance apps for consumers have been “gamified” to educate customers—and perhaps attract prospects—in the name of fun. An example of this is AXA Equitable’s “Pass it On!” game (launched in September 2011), designed to teach “players” about the importance of life insurance as they move their virtual family from New York City to San Francisco.

‘Something happened in 2012 that was very interesting, and I call it: Insurance carriers have fallen in love with the agents again.’ — Ellen Carney, Forrester

Carney says she’s seen gamification on the life insurance side, but very little outside of that. She thinks that may appear more in the health insurance arena, as carriers starting thinking about how to attract individual consumers in the area of affordable care. “Some of that may get driven by gamification, especially for younger customers — the ones they most want on their books.”

Who has the apps?

As researchers have noted, some insurance companies have moved more quickly than others to get their apps on the App Store shelves. The overall winner of the app ranking by MyPrivateBanking Research is Paris-based AXA Group, which “offers a consistently good app portfolio across all insurance sectors,” according to the report.

Kevin Kennedy, who heads new business development, retirement savings, at AXA Equitable in the United States, says the company’s global CEO has made its digital strategy a priority for the company.

“The advisor and the agent are demanding it, so you can’t ignore it,” Kennedy says.

He says the company started using iPads “in earnest” about a year and a half ago. At that time, about half of their wholesalers had iPads, and of those “probably 90 percent were using them for Angry Birds [a mobile game] and things like that,” he said. But some of the wholesalers took the technology to heart, and started using apps that would make their presentations “really pop with advisors.” Then something happened: “productivity went up significantly,” he says. Other wholesalers noticed, as did the national sales manager, who mandated that everyone get an iPad and go through training.

“You fast forward to today where it’s an integral part of our business and our strategy moving forward,” Kennedy says. “Our wholesalers have completely embraced it, and as a result ... we just had a monster year. The average productivity per wholesaler was up 40 to 50 percent.”

David Funsten, The Agency Inside Harte-Hanks

During that time, the company also got involved in developing apps. One was an iPad app for AXA’s Structured Capital Strategies variable annuity product; the app was launched in December. In addition, AXA Equitable has an iPad app for its Athena Indexed Universal Life insurance product. That app “uses personal storytelling to explain how its indexed UL can work for different people at different life stages,” according to a company news release.

How many advisors out there are comfortable with iPads? “I think it’s a mix,” Kennedy says. There are some who have not yet embraced the technology, “but they’re starting to see the value in it, and they’re starting to say, ‘maybe I need to learn more about this.’”

At AXA, it’s not an option. “We feel it’s more efficient, more effective and it’s better for the client from a customer centricity standpoint.”

How many product apps will be developed going forward? “I think all our products will be on an app-driven platform at some point,” says Kennedy. “We believe in the technology and, in this space, we’ve got to be innovative.”

When it comes to life insurance, Celent’s Monks points out, ‘You buy it once, for the most part.’ Therefore it doesn’t lend itself to a transactional mobile app on the consumer side.

That doesn’t mean the advisors who don’t feel comfortable with apps and iPads will be ignored. AXA will continue to provide updated, streamlined product kits and materials. “We still have a robust offering there. It’s a choice; it’s an option.”

How have advisors reacted to the product apps? “They say, ‘You’re bringing the product to life,’” Kennedy says. They can run through different scenarios, “literally in seconds” instead of calling the sales desk or going online to do it.

“Our mandate is to make things simpler, easier and more client-friendly going forward,” he says.

The company is seeing a correlation with return on investment, too. “We’re getting new producers, roughly 400 a month now, doing this business. I think when you throw in these new tools, it will just make that number grow incrementally.”

“What it really comes down to is, insurance is a really old business, and it needed innovation on the product front, but it also needed innovation in how we present ourselves as well,” he says. “And that’s where we want to lead.”

The business of selling insurance has shifted from one where information was ‘pushed’ at consumers to one where consumers are now ‘pulling’ information on their own. — David Funsten, The Agency Inside Harte-Hanks

John Hancock, too, has also been a frontrunner in the adoption of mobile devices and the development of product apps. In early 2011, wholesalers in the U.S. wealth management division of John Hancock Financial Services Inc. were all given an iPad from the company. John Hancock Life Insurance has launched several apps, including JH Life BriefCase app, which gives producers a way to organize and manage illustrations and policy information, and JH MarketPlace, which provides access to the company’s life insurance sales materials and tools.

Apps are also being developed for the area of long-term care. For example, Genworth Financial in April released a “Cost of Care” app in conjunction with its ninth annual Cost of Care survey. The web-based app gives advisors and clients access to data on the cost of long-term care on a state-by-state basis.

Drivers in insurance sales

What do insurance and financial services firms need to keep in mind as they develop app strategies? It might be useful to look back a few years to see how the nature of insurance sales has evolved.

David Funsten, vice president, strategy and insight, at The Agency Inside Harte-Hanks, says that the business of selling insurance has shifted from one where information was “pushed” at consumers to one where consumers are now “pulling” their own information. Harte-Hanks (San Antonio, Texas) is a direct marketing services company. Five or six years ago, Funsten says, “about 60 percent of how people bought was based upon information that was pushed to them.” It came through direct mail or a TV ad with a toll-free number, for example. Currently, “60 percent of that information that influences the buying decision is things they pulled down.” Consumers have become more self-directed, he notes, pulling research from the Web or seeking out recommendations on social media sites, for instance.

App development was initially spurred by insurance companies to benefit their agents, not necessarily the consumer. The applications were intended “to facilitate better note-taking, better processes, lower the cost of labor ... to facilitate a claim,” Funsen says. Mobile and web applications helped improve and speed up communication between agents and the home office.

Recent studies show about an 18 percent a year average growth rate for mobile technology within the insurance space, says Funsten. And mobile solutions are driving efficiency gains of about 30 percent in claims processing. “So there’s good evidence to keep moving forward,” he says.

Todd Staehle, vice president, Financial Markets, at Harte-Hanks, says now that many insurance companies provide apps that give you a quote, let you file a claim, and locate an agent, the next progession has been to keep mobile-equipped customers involved by adding “around me” type features that can help them locate a nearby restaurant or venue, for example. Esurance, notes Staehle, has designed its app so that consumers use it as a “destination” versus using it once in a great while “when you have to file a claim or potentially find an agent.”

According to a 2012 technology survey, half of financial advisors now own a tablet. Insurance carriers seem to be taking notice of that.

This leads to broader application of the information being fed to a mobile device. “Where we feel like there’s a missing opportunity is the connectivity in bringing that data together ... what that customer’s doing within that application, bringing that back into the central data warehouse ...” That data can be used to find out how customers are engaging with the brand. The goal should be: “What information can we capture and utilize to increase the relevance of the relationship that we have with that customer?” Staehle says.

There are other challenges, too, for the insurance industry as they navigate the mobile world.

For one thing, it’s not an inexpensive proposition anymore, says Forrester’s Carney. “And how do you rise above the great unwashed masses of all the other mobile apps that are on the market these days?” You can’t be just a “me-too” in the market. “You have to have some really cool functionality,” she says.

Despite the expense, businesses seem ready to invest in the technology. Business spending on mobile projects will grow 100 percent by 2015, according to the Forrester report, “Mobile is the New Face of Engagement.”

Carney says the sophistication of mobile apps will likely spur the development of new products or ad hoc insurance. For example, if an insurance company sees that you are heading to a ski area, it might suggest you buy additional life, accident or health insurance. “These ad hoc products exist in markets outside the United States, like Japan and Africa. You could see something like that coming to the U.S. market.”

Gina Lauer is a contributing editor of Bank Insurance & Securities Marketing. She can be reached at glauer@bisanet.org.