We Are a Mobile Nation – How Are Insurers Responding?

One in two Americans owned a smartphone by the end of 2011, according to Neilson’s estimates. What does that mean for insurers? How are they changing to accommodate mobile devices into their business model? LIMRA examined the mobile initiatives of life insurance companies to find out.

Life insurers have three basic audiences to reach: the general public, policyholders and producers. The majority of insurers already has, or is planning to have, mobile initiatives for at least one of these groups. Among companies that offer mobile access or plan to offer mobile access in the future, the most common options are mobile applications (apps) and web-sites that have been modified to be mobile friendly. Companies are most interested in offering separate mobile websites in the future, which are more affordable to the company than apps are.

A significant driver for companies to invest in mobile initiatives is to pro-vide better service and access to producers. Already, almost a third of companies have some sort of mobile initiative in place and another 30 percent plan to launch a mobile program specifically for their producers within the year. According to nearly nine in 10 of those companies surveyed, producers—especially those marketing to younger generations— are demanding mobile support from carriers. Also, the number of producers using mobile devices in their practices has nearly doubled from 2008 to 2010, according to previous LIMRA research. Three-quarters of companies said investing in mobile initiatives was important to keep pace with their competitors and nearly as many expect these investments will increase sales.

An IBM study found that 10 percent of shopping on Cyber Monday was done through mobile devices. With life insurance ownership at an all-time low, insurers are seeking a way to better engage con-sumers. And providing access to information via mobile devices may be a way to reach these uninsured or underinsured consumers.

Current Status of Mobile Initiatives by Type of Stakeholder

  • Have already launched some mobile initiatives                      Public 28%     Policyholder 11%   Producers 30%
  • Plan to launch within 12 months                                                Public 17%     Policyholder 23%   Producers 30%
  • Plan to launch in more than 12 months                                    Public 21%     Policyholder 23%   Producers 17%
  • Have no mobile initiatives for this stakeholder                       Public 34%     Policyholder 43%   Producers 23%

Another area of opportunity lies within the retirement market. With more than $400 billion per year rolling out of employer-sponsored retirement plans and into IRAs, plan providers are looking for ways to keep these assets under management. Retirees and pre-retirees who are proactively contacted by their retirement plan provider around the time they leave their employer are twice as likely to keep their retirement plan assets with the plan provider, according to another LIMRA study. Will mobile devices facili-tate this contact? It appears that the plan providers think it might. LIMRA found that about one in three retirement plan providers currently offer mobile access to their sites.

But making these changes does not come without challenges. Seven out of 10 companies report having trouble allocating adequate human resources to properly launch and manage the new mobile initiatives.

In addition, companies said they struggle to manage the different mobile devices, platforms and operating systems. Half of the companies said defining the return on investment for mobile investments and ensuring data security have been issues of concern. LIMRA has five recommendations for developing a mobile strategy:

1. Monitor mobile interest. Mobile adoption is changing quickly. While mobile may have been unimportant to your stakeholders when you established IT objectives last year, it is probably more important now.

2. Ask your stakeholders … and listen. Reach out with surveys, focus groups and interviews to learn what mobile services and features your various stakeholders really want.

3. Offer a consistent message. Regard-less of the channel used to access your company—full site, mobile site or mobile app—offer a consistent message about your brand.

4. Observe other financial firms. Banks, asset management companies and health care providers often offer mobile options now. Once their stakeholders get used to these mobile services, they may expect it from life insurance carriers, too.

5. Apply mobile best practices. Understand the devices, the environment and the users. Mobile users trade convenience (and loading time) for the depth of information found on larger screens.

Overcoming these challenges and finding a way to develop an effective mobile strategy is a top priority of insurers. We expect there to be a learning curve for adopting mobile technology, but it is undoubtedly an important platform for the future of the insurance industry.

Mary Art, research director of LIMRA’s technology in marketing and distribution research, is responsible for new research in the technology area.

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