Consumer mobile apps in Property and Casualty: Webinar follow up

On April 16 and 17 we hosted our "Consumer Mobile Apps" webinar focusing on P&C apps availability in Latin America. We had a Spanish and an english version of the webinar. The survey behind the webinar included the review of 169 insurers, focusing on the top 10 of each market (20 countries). Before you jump to tell me that I am failing on math 101, let’s put a note here: not all countries in Latin America have 10 P&C insurers. A question that came up was about the role of brokers & insurers regarding customer -facing apps. There are at least two angles to cover this question: 1) Insurers and brokers competing to win customers/consumers 2) Insurers and brokers collaborating to win customers/consumers Our research shows that insurers and brokers are investing, with different pocket sizes, to win customers attention through apps. First thing to consider here is that consumers don't just want an app. They want to have easy interactions. Apps are just another cog in the engine. As investment (and capacities) are needed to provide these experiences it is most likely that larger brokers will be able to play this game along with insurers. Now, when we take a look to the intermediation in insurance in Latin America, banks and retailers play an interesting role too. Consumers usually interact more with these than with brokers and insurers, so if banks and retailers decide to invest in an app that would also provide access to the financial and non-financial products the consumer has with them (i.e. credit cards, product and service offers, insurance, travel? in the case of a retailer), would the consumer be more likely to use this app instead the one provided by the insurer? More broadly, will the consumer prefer to buy the insurance through a bank, a retailer, (fill in the blanks with the distribution channel of your choice) or through the insurance company? It seems that insurers will play an important role in providing an app every time they have a direct model or by collaborating with the distribution channel that can't manage these interactions by their own. On all other circumstances it is more likely to expect the app coming from the distribution channel that has a meaningful interaction with the customer. There are some good examples of collaboration between insurers and agents. Allied Insurance, Celent's Model Insurer Award winner for the digital catregry this year, enabled agents to brand the insurance app. The mobile app serves as another way for Allied to extend and enhance customer service. Select agency partners dynamically brand the customer experience with their own custom logo. Customers can view policy, save insurance ID cards for offline viewing, make payments, view agency information, get accident help and roadside assistance and start a claim. Future plans include expanding the dynamic branding feature; building additional personalized digital enhancements for its agents and customers. The project from concept to full delivery took approximately eight months. They already had 22,000 downloads and more than 200 independent agency partners personalized the app with their own agency brand. The app also enabled thousands of mobile payments. It’s a perfect mix of Broker/Agent presence with the needs of the insurer. If you’re interested in learning more about effective technology use in insurance be sure to read about our Model Insurer Awards finalists and winners at http://www.celent.com/reports/model-insurer-2014-case-studies-effective-technology-use-insurance. Another case highlighted in the report, John Hancock's sales tool to empower its agents (though this one is for Life insurance):

• JH Life BriefCase: one central place to store, organize, and manage illustrations and client related information.
• JH Marketplace: manage sales and underwriting materials, increasing speed of distribution, decreasing cost of delivery, maintaining version control for compliance.

What is the potential for mobile apps in Latin America? This was another area of interest for those attending the webinar. Latin America has surpassed 100% mobile phone penetration. On average, there are 107 mobile phones per 100 people across the region. However, this doesn’t mean everyone in Latin America has a phone or that there’s connectivity everywhere. Smartphone penetration is growing in Latin America, but adoption rates are behind more mature markets such as the US and UK. Smartphone penetration in Latin America is around 32%, though this differs significantly from country to country. Nevertheless, Brazil, for example, has more smartphone users than Germany or France. Brazil and Mexico together have more smartphones than Australia has inhabitants. Consumer behavior in Latin America should help to accelerate adoption. Increasingly, consumers are using mobile devices to access the Internet. In Mexico, for example, 80% of smartphone users access the Internet daily, almost 90% access an app daily, and 38% did not purchase something on a store as a result of a search on the smartphone. Apps are also becoming important in enabling new business and service models; providing a platform to distribute, in a cost-efficient way, insurance products that are less attractive to sell through traditional channels. Microinsurance is an example, as are e-wallet capabilities banks are making available, even in feature phones. As smartphones become more popular and inexpensive (as announced by the major phone manufacturers in the Mobile World Congress at Barcelona) this trend will accelerate and open more possibilities for financial institutions, beyond the top tier customers. Institutions operating in the insurance space such as banks, retailers and non-traditional players such as Google seem to understand this very well. Finally, from Brazil we got a question around what is it required before even starting with an app. I believe this could actually be a good title for a report! As we don't have enough space here I would summarize in the following:

• Understand your customer - who/how/when/why he buys from you. Customer needs to be in the center of the design. We have moved to an environment where "the user" is beyond the insurer (and IT department) control.
• Don't focus just on the mobility concept, most likely it will require an omni-channel strategy to deliver what they expect. Consistency and integration across channels is of vital importance.
• Work on your processes. Simplify and adapt to new channels and customers’ expectations.
• Invest in a core system that will be able to accommodate these processes, integration points and basically that will provide you with the flexibility to evolve in time with agility.
• If you insist and only want to focus on mobility, assuming everything else in your company works fantastically well, then portals/websites should be part of your mobile strategy besides apps. Use responsive design so it is easier to deliver content on any device (and size of screen).

If you are interested in our research about mobile, there is a series of reports published and some more coming out soon. Also expect a couple of reports about Online insurance. If there is any specific theme you would like to see us cover, please let me know. See you around!