The Mobile Revolution:
Will the Property/Casualty Insurance Industry Seize the Opportunity?

By John Cantwell and Edward Cammarato

Smartphones and mobile devices have forever changed the way we communicate. We're now permanently "connected" — wherever we go. Work, family, friends, schedules, and finances are all instantly available. And while there are obvious downsides, we expect and demand immediacy in almost everything.

Unlike cell phones of the past 20 years, smartphones provide a much richer user experience on many levels. A sophisticated camera is always available to take, send, post, and store thousands of pictures. The GPS capability always "knows" where you are and can guide you to places such as restaurants and shopping venues. Apps with Internet connections provide instant connectivity to your bank, insurance company, airline, department store, social network, and most accounts with online access. Your entire music collection is always with you. And yes, your mobile device is even good for phone calls, texts, and e-mails.

Mobile Revolution and Innovation
Statistics and predictions about the mobile revolution are compelling. More than 80 million U.S. citizens now own smartphones (about 40 percent of cell phone users). By the end of 2012, smartphones may well outsell PCs in the United States. And by 2014,it's anticipated there will be more web traffic from mobile devices than from PCs.

The question is how (and when) insurance companies will leverage the mobile revolution and provide new products and services to their customers, agents, and support entities. Will the industry aggressively invest and innovate? Or will most carriers wait until a few brave trailblazers lead the way and demonstrate a financially viable business model?

Just like the online quoting revolution of the late 1990s, it's probable that innovators and early adopters that lead the mobile revolution will enjoy competitive advantages until everyone else catches up. In the meantime, many carriers (especially personal automobile) have developed basic mobile applications. Most involve an app for initial claims reporting, basic policy view, or bill paying. A few new quoting applications leverage the camera and bar code functionality in smartphones to capture VIN or driver's license images to launch a prefill process for completing quote requests.

Greater investment by the insurance industry and adoption by ­policy­holders, agents, and others are important steps to creating a win-win scenario. Customers — defined as the mobile app user — must perceive and want a benefit from the mobile application. That benefit can fit into a number of categories, such as ­conve­nience, saving time or money, safety, streamlining work efforts, improved service, or just fun.

A Few Ideas
With this in mind, the mobile development team at Verisk Insurance Solutions has been brainstorming: What are some of the potential insurance applications of the future? How can the capabilities of the smartphone provide effective services for both the insurance industry and consumers?

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Image Analytics
Image Date / Time: 2011:09:09 / 14:27:04
Make / Model / Number: Apple / iPhone 4 /
Latitude: 39.99566666666666 N
Longitude: 75.30816666666666 W
Distance to Policy Address: < 100 ft.

Location-based technology can be a game changer, and the ability to geo-tag smartphone photos (see example) opens up intriguing possibilities. Would drivers be interested in policy discounts in exchange for uploading pictures of their car? Would carriers be willing to provide discounts in exchange for verifying that the car exists, has no damage, and is located at the policy address?

Location-based technology can also provide safety and security services. Weather is the direct cause of a large percentage of both automobile and property claims. Would policyholders sign up for a smartphone service that could provide a text or e-mail alert warning of a storm approaching their home or current location?

The smartphone's camera and bar-coding feature might significantly enhance the ability of a homeowner to inventory valuable assets and provide a self-inspection. Could such an inventory provide peace of mind to an insured and also enable the claims adjuster to settle the claim quickly and accurately?

Final Thoughts
As a macro trend, mobile technology is increasingly facilitating customer self-service. Consumers are demanding instant access to services and information, and the use of paper and traditional mail services continues to decline. For example, pending legislation in several states would permit drivers to use their smartphone apps to show their insurance ID card "virtually." These states include Alabama, Arizona, California, Colorado, Idaho, Maryland, and Mississippi as of the first quarter of 2012. Verisk expects this trend may continue as more and more states bring similar bills to the floor of the legislature.

Social media has changed the way more recent generations think about privacy and sharing information. Should your mobile device allow you to connect to other policyholders who live nearby when you share the same agent or insurance company? Could such a network support ride sharing or the pooling of certain services?

Location-based technology and its implications are compelling because GPS coordinates (and behaviors) are connected to the person and not the vehicle. Could auto insurance programs one day be based more on the individual's characteristics and behaviors than on the specific car?

Imaging technology will likely fundamentally change the data-intensive insurance industry. Legacy underwriting, policy management, claims, and management information systems do not typically support images associated with the enormous amount of data stored and updated daily. But images will increasingly become an integral part of the underwriting and claims processes — many such images coming from the mobile devices of customers, adjusters, law enforcement, and others.

There are numerous possibilities for the industry to consider. It will be interesting to observe how the industry reacts to the mobile revolution and what innovations will change the way insurance is delivered and managed.

John Cantwell leads the Verisk Underwriting Solutions marketing team. Edward Cammarato is product manager for QuickFill®, Verisk Underwriting Solutions' automated conditional ordering auto and property prefill service.