Technology: Insurance on the go

tablet-and-smartphone

With people increasingly using mobile devices to access the internet, how easy is it for customers to purchase insurance on the move?

Forget creating websites solely for the home computer: mobile internet is fast becoming the norm. Figures from the Office for National Statistics reveal 61% of adults have used a mobile phone or tablet to go online this year, up from just 24% in 2010.

And while social media is the number-one destination for mobile technology users, finance is not far behind. Consumer Intelligence chief executive Ian Hughes explains: “After social media, sorting out their finances is rated as the second-most useful thing consumers do with their mobile technology. So far this is largely down to mobile banking, but insurers need to get into this space too. Consumers expect to be able to take out cover and interact with insurance companies through their mobile devices.”

Consumer Intelligence research shows there are already a significant number of people looking to buy insurance on their mobile phone or tablet. In its Data & Products survey, conducted in June 2013, it revealed 15% of insurance is bought through a mobile device. While this lags behind the 60% purchased via desktop, it’s higher than more traditional channels such as the telephone (14%) and face-to-face (11%).

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However, while this is promising, given the amount of traffic coming from mobile technology, the figure could be much higher. Between April and June 2013, 15% of Confused’s traffic came from mobile phones, while a further 12% was from tablet devices.

The difference between the volume of mobile traffic and those actually purchasing cover is supported by conversion-rate figures, which are typically much lower than on desktop computers. While some of the fall off can be attributed to using mobile platforms purely for research, insurers also recognise sales are being lost as a result of usability issues.

“The conversion rate is higher on tablets than on mobile phones,” says Ian Hood, global ebusiness director at RSA. “This is down to the screen size. While a website can be viewed reasonably well on a tablet, it can be frustrating when it’s on a small screen.”

Technological obstacles
Although the demand exists for mobile purchasing, a number of barriers stand in the way of insurers embracing this form of technology. Firstly, there are the challenges associated with insurer technology – notably legacy systems. However, even without legacy issues, developing a multifunctional mobile site is not simple.
Steve Lathrope, managing director of SSP’s insurer division, says: “It’s relatively easy to bolt a service on, such as a claims app, and appear digital, but consumers want more than this. They’ll expect to be able to make adjustments to their policy, contact the insurer, get a renewal quote and so on. Ensuring it is consistent with other platforms is much more complex.”

Indeed, even more challenging is the cultural shift brought by servicing mobile technology.

With the internet at their fingertips, consumers expect everything to be up to date and error-free or they simply go elsewhere. Stephen Mitchell, digital strategy manager at Aviva, says this requires a quicker development process: “It’s much faster paced than insurers are used to and this may require changes to internal sign-off processes and so on. It’s a significant challenge.”

Another major difference is the amount of testing required for mobile technology. With hundreds of distinct handsets and devices, as well as numerous operating systems, it’s important to ensure a mobile site renders correctly in all formats. This can add to the development costs.

Given the expense involved, David Knowles, IT and change director at Junction, says it is not always easy for insurers to understand the benefits of a mobile presence. “The retailers have done a great job moving into this space and have found really effective ways to engage with their customers on a continuous basis,” he says. “But insurers’ customers tend to interact with them once a year or when there’s a claim, which makes it difficult to generate a commercial benefit.”

However, the insurance industry is beginning to catch up. Some have already made the transition to mobile sites, while others have set out plans to establish a mobile platform over the next 12 to 18 months.

Improvements in programming are helping. By using responsive web design such as HTML 5, it is possible to create a website that automatically detects the user’s screen size and renders the display appropriately.

Phil Ost, head of UK personal lines direct at Zurich Insurance, says: “We are seeing mobile usage increase to around 20% of all our traffic, so we are reviewing our digital strategy. This will include a mobile site but we need to be sure we strike the right balance between making it easy to use and treating customers fairly.”

As well as waking up to demand, insurers are also becoming attuned to different types of mobile offering. While there was a rush to launch apps, insurers now recognise that a mobile-optimised site can be more appropriate.

Meanwhile, supporting technology is making the transition easier. Consumers are becoming accustomed to making cashless mobile payments and, as online credit card payment systems become more commonplace, online payment will no longer require customers to input 16-digit card numbers. Jon Lott, head of direct at Allianz Insurance, says the technology has already changed attitudes in parts of Asia. “No one carries cash anymore in South Korea, as they use their phones to pay from their bank account or by credit card,” he explains. “This has increased the desire to transact by mobile.”

With less technological baggage and a greater incentive to cosy up to consumers, the aggregators and direct insurers are leading the way. Confused’s Quick Quote, launched in August, is available online but also by text and through an app. This enables existing customers to get a motor insurance quote simply by providing their email address and car registration number.

Despite some good progress, there are still a number of challenges the industry must overcome. The collection of data needed to generate a quote can prove difficult. With smaller screens and keyboards, inputting all the data necessary to give an accurate quote can be frustrating. “This is possibly the biggest challenge and I don’t think anyone’s really cracked it yet,” says Hood.

The approach has been varied: while some look to use drop-down menus to allow customers to select the right option easily on a touch screen, others rely on an existing relationship with a customer to access data quickly. On Quick Quote, Confused requires users to be existing customers, as it will already hold most of the information needed to generate a quote.

While this can be considered a step forward, new approaches are far from perfect. Inputting several screens of data can be frustrating, and the requirement to already be a customer means some will drop out of the quotation process.

To address this, more innovative methods of capturing data are expected to come into play. “Insurers will need to look at using data from other sources to validate the information they can capture from a customer,” says Transactor London Market CEO Chris Newman. “This will help to reduce the information the customer needs to input and make the quotation process much smoother.”

While this approach removes some of the usability issues, it is not without its drawbacks. Hood says there is still uncertainty around the rules on data usage: “It’s not an issue when you use your own data on a customer, or information that is readily available such as vehicle registration details from the DVLA, but if you integrate data from the NHS or social media, for instance, then it’s a legal minefield. We need to seek clarity on this, but it could take several years.”

Worth the effort
Although there is pressure on insurers as consumer expectations increase, there are also significant benefits of embracing the mobile space. An effective strategy makes it possible to build a stronger customer relationship. Jill Elliott, head of customer proposition at Aviva, explains: “Insurers can be seen as only there when needed, but with mobile technology you can create a much more personal experience that can help you get closer to your customer.”

This can be seen in the amount of feedback mobile users are happy to provide. While insurers often struggle to get any feedback back from customers, consumers are more vocal when they rate their mobile apps. Indeed, between mid-July and mid-September, more than 500 people rated Aviva Drive in the App store.

Insurers may also benefit from using the data generated through mobile technology. Lathrope says: “It’s possible to get details of someone’s location through a mobile device. With this information you could target sales more effectively, for example, offering travel insurance if they were in an airport or even hole-in-one insurance if they were at a golf club.”

It could also lead to new types of products that incorporate elements of mobile technology. Hughes explains: “The technology on a phone can tell you the location of the device and could even take a photo to show you who has it. This could be rolled into phone insurance to create a more complete and appealing package.”

The data could also be used as a rating factor. Lott has already noted a difference between customers in terms of the devices they use. “People who purchase with an Apple device tend to be more affluent than those purchasing through Windows devices, with the exception of the iPhone, which tends to be more of a mass‑market fashion item,” he concludes. “Insurers’ use of mobile technology has been limited so far but, as we embrace it, it’ll enable us to find new ways to support our policyholders.” 

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