Insurance Untethered

To fully leverage mobile technologies, insurers need to meld rapid action with ample amounts of long-term, strategic thinking.

Insurance Networking News, February 1, 2012

Bill Kenealy

Although mobile technologies occupy a very narrow part of the electromagnetic spectrum, their successful adoption presents a broad array of challenges to insurance companies.

With mobile devices fast becoming an expected medium for consumers interacting with any industry, insurers will have to follow suit. Indeed, in the past year insurance-specific mobile applications seemed to have made the transition from emerging technology to operational necessity. In a world where some 700,000 Android devices are activated daily, insurers ignoring the mobile application space do so at their own peril. Not surprisingly, many insurers recently have focused much of their energies on developing customer apps and mobile websites. From above, the current state of mobile development is analogous to the rush by insurers to establish a Web presence a few years back.

Much as traditional Web development advanced along an arc from static, vanilla Web pages to rich, transactional and interactive sites, mobile developers are working in a field where customer expectations and the technology supporting them are rapidly changing. Yet, unlike Web development, which coalesced around a single standard, mobile development is highly Balkanized, causing carriers to make tough decisions on form factors, operating systems, and versions thereof. Alternately, a carrier could avoid these decisions altogether and instead focus efforts on developing sites optimized for the emerging HTML5 language and mobile Web browsers, essentially opting for the universality and lower development costs of mobile Web over the richer, more immersive experiences that native apps enable.

The App Factory

With both Google's Android and Apple's iOS platform commanding a great deal of mindshare, and Windows Phone and Blackberry not to be discounted, many carriers are opting to develop for the platforms in parallel, which gives them greater reach but invites a host of challenges. For example, developers may face a great deal of redundant work developing the same app for multiple operating systems. Elsewhere a development team may be bogged down fixing bugs and perfecting an app, only to have an updated OS render it inoperable.

"The problem with a multi-platform strategy is that it costs more and there is a greater risk, but it may well be worth it," says Kevin Field, VP & CIO Hub International, adding that the primary challenge with developing for multiple operating systems is how best to manage finite development resources. "With the different operating environments, do we develop a core set of capabilities that work across each platform or do we maximize the robustness that each platform has to offer and develop more gripping user interfaces?"

One way around the scarcity issue may be emerging in new code-aggregating software platforms, such as the offering from Kony, which enables developers to establish a single code base that can be used to develop apps for all platforms. In this way, developers won't have to start from scratch when developing the same app for, say, iOS and Android. Yet, faster app development may not be an unalloyed good. According to a recent assessment by Gartner, mobile application development projects will outnumber traditional projects by a ratio of 4:1 by 2015. Thus, some worry that in the rush to develop apps, insurers have shoved architectural and security concerns to the back burner and may lack the basic security and integration skills necessary to successfully expose internal applications to mobile devices. While service-oriented architectures are well-established in the area of Web service, they remain largely absent for mobile applications. "We see a lot of carriers becoming an app factory," says Tom Kavanaugh, director at PwC. "They are not putting enough thought into the role mobile plays in their business model."

Field agrees that data integration complexities between mobile and enterprise applications are a key challenge. "How do you make your data available to a mobile platform?" he says. "We need to take a look at how we are architecting our data and the different tools that operate on top, moving and securing the data."

Even with these issues put to rest, a more existential one rears its head-what to develop and for whom? Kavanaugh says the answer to the question of for whom to develop will likely vary by line of business. "P&C insurers are farther out front on consumer-facing apps while life insurers are focusing their efforts more on the producer," he says.

In the case of customer-facing mobile applications, many of the earliest examples were minimalist, featuring bare-bones functionality that enabled a user to perform a singular function, such as look up the value of an annuity. Increasingly, insurers are developing apps that seek to replicate or even surpass the transactional functionality found on their website. Indeed, the geo-location and sensor capability of the common smartphone opens up new avenues for app developers to increase customer satisfaction. Considering what a fickle mistress consumer satisfaction is, developers may need all the tools in the toolbox. Many a customer will download an app, use it once, then ignore it or jettison it entirely. To combat this, developers are endeavoring to craft more compelling user experiences. One way to make an app stand out is to introduce "gamification" to engage the user and encourage return visits. Even so, we may be waiting a while for an insurance app as addictive as Angry Birds.

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