Are Insurers Ready to Embrace Mobile?

Today about 4.6 billion people globally subscribe to mobile cellular services, according to the International Telecommunications Union (Geneva). Increasingly this means consumers are using smartphones to interact with businesses, including insurers.

"Currently in North America, it's estimated that 98 percent of the population has some sort of mobile device, and 25 percent of these are considered smartphones," notes Craig Beattie, an analyst with Boston-based Celent. "The ever-lowering price of smartphones means that ownership will rise to 50 percent of all mobile devices in North America in the next five years."

That has major implications for carriers across all business lines, acknowledges Richard Connell, senior EVP and chief administrative officer of Branchville, N.J.-based Selective Insurance Company of America, who admits to being an iPhone and iPad user. Nonetheless, the P&C carrier is taking a cautious approach to its mobile strategy.

"We know this is going to happen, and we're planning for it, but we don't think that now is the time to make the move toward mobile in a broad-scale way," Connell comments. "We are building experimental apps for iPhones and iPads to try to understand how we can eventually put them to use."

Chattanooga-based disability insurer Unum also is in investigative mode, according to Kathy Owen, the carrier's global CIO. "Unlike P&C insurers, we don't have claim adjusters in the field. But we do have interaction with our customers through the enrollment process," she explains. "We're exploring a wide variety of ways mobile devices and applications could help facilitate that process."

Owen reports that Unum recently received a feasibility grant from the Irish government related to work undertaken at the insurer's R&D facility in Carlow, near Dublin. "Part of that grant involves research around new mobile devices for use in the enrollment education process," she relates.

The nature of reinsurance, however, makes mobile more of a personal productivity tool, according to Mark Showers, CIO of RGA Reinsurance (Chesterfield, Mo.). "We're not driving a concerted, methodical approach that insists that everyone in business development should have a BlackBerry or other device," he says. "Our international operations have many more devices than the U.S. does. But at this stage it's very much a matter of personal preference."

Jay Levine, CIO of Blue Cross and Blue Shield of Minnesota (Eagan, Minn.) is enthusiastic about the potential of mobile devices from a consumer perspective. "I'm an iPad user myself," he confesses. "It is ... amazing how much functionality exists on these devices."

Levine the CIO also sees great potential for mobile technology from a business point of view. Mobile devices already play an important role in the business activities of his company, he says, and they will become even more important as a result of healthcare reform. Health insurance has tended to be bought through large employers, and the end consumer was treated more like a patient than a customer, Levine asserts. But health reform is driving more transparency, he adds.

"There's no question that there's potential for mobile platforms to deliver that kind of information," Levine says. "We have a number of activities under way to determine how those devices can be used by our existing membership."

A Head Start

San Antonio-based USAA has a head start with regard to mobile. Since the financial services company serves a military customer base, it already utilizes technologies to enable interaction with members who often are deployed to remote locations. USAA first delivered transactional capabilities when it launched the USAA.com website in 1999, according to CIO Greg Schwartz, who drove that initiative.

USAA's mobile offerings include the Deposit@Mobile remote deposit capture capability for bank customers; the Auto Circle iApp, which gives members the ability to find, finance and insure a new vehicle via an iPhone; and Home Circle for members seeking to finance, rent or insure a home. But Schwartz sees a role for mobile in all lines of business.

"When you get into more sophisticated products, such as life insurance, you can use a bigger device, such as an iPad, to have a more interactive experience," says Schwartz, who predicts even greater possibilities for mobile video interaction. "When that is enabled through a 3G network, I think we'll have the opportunity to improve the customer experience even more," he comments.

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio