Over the last couple of years, I’ve had the chance to personally test out claims servicing from a major national insurance carrier on more than one occasion, much to my chagrin. This left me with certain subjective impressions about the state of self-service and mobile support in particular. However, realizing that the approach of testing out offerings from multiple carriers through actual experience could get expensive (not to mention downright dangerous), I decided on a more academic approach.

In order to gather some empirical data on the breadth and depth of mobility solutions being offered to Personal Auto insurance policyholders, my team went through a rigorous analysis of the state of mobile offerings from twenty insurance carriers. Ten carriers we selected are Tier 1 (greater than $2 Billion in premium) with either national or super-regional reach. Ten are Tier 2/3 ($500 Million to about $2 Billion in premium for Tier 2 and below $500 Million for Tier 3). The carriers were selected to offer a reasonable spread of size and geographic coverage. In aggregate, these carriers represent more than 50% of the total in-force personal auto policies in the United States.

Next, we assessed the availability of mobile technology offerings to policy holders, which included looking at:

  • Apps for iPhone, Android, and iPad
  • Dedicated mobile websites
  • Features and functions provided on these apps and websites

We downloaded apps to iPhones, Android phones, and iPads and gave them a test drive. We accessed mobile websites. We looked at Youtube and Facebook posts by the carriers promoting these mobile solutions. We tested the limits of our mobile data plans.

The high level findings are abundantly clear - there is a distinct divide in terms of mobile capabilities offered to personal auto policy holders between the Tier 1 and Tier 2/3 carriers.

  • 90% of the Tier 1 carriers in our survey offer significant mobile technology
  • Only 40% of the Tier 2/3 carriers in our survey offer significant mobile technology

In and of itself, this was an expected and important finding, as it confirms that there is a distinct difference between the Tier 1 and the Tier 2/3 carriers in this key technology area. The next question is, “why does such a significant gap exist?“

From my conversations with carriers over the last two to three years, it’s evident that the
“mobility gap” between Tier 1 and the Tier 2/3 carriers stems from some combination of:

  • Technology capability and readiness. While mobile apps are not inherently difficult to create, the ability to provide meaningful services requires integration to core policy administration and claims systems, which involves a significantly higher level of investment.
  • Channel strategy. While many Tier 1 carriers emphasize self-service, many Tier 2/3 carriers continue to focus on the value of the independent agent, preferring to route as many contacts as possible through that channel.
  • Competing Priorities. With all of the other demands for agency integration, transactional Web capabilities, core system replacement projects, etc. many smaller carriers simply don’t have the bandwidth to get around to mobile solutions.

So, how important is this “mobility gap?” For many traditional customers (who value an agent relationship above all else), maybe the answer is “not very.” However, as more and more smartphones and tablets make their way into the hands of policy holders, one has to suspect that they will at least start to question the carriers on why they are less convenient to do business with than their bank or airline. Many studies show that technology experiences in unrelated areas (e.g. retail business) quickly influence even traditionally lagging industries like insurance.

More importantly, with ever-increasing pressures on rates from the major direct writers, Tier 2/3 Carriers are being forced to look at operational and servicing efficiencies in all areas. While they are loathe to give up the personal service provided by agents and their own staff, the ability to offload some routine servicing tasks as well as covering emergencies in off-hours has to figure into their overall channel strategy. And, it’s crystal clear that mobile is going to part of the equation.

I’ve included the summary of mobility capabilities among the 20 carriers in the attached report. You can see the individual carriers we surveyed and their capabilities across various mobile delivery platforms.

Next time around, I’ll do a deeper dive into the details of the capabilities offered via mobile platforms to Personal Auto policyholders.