Despite Downturn, Insurers Explore Smartphone, Social Networking Edge

Despite the recession, insurers are still taking leaps of faith with social media and tech tools to improve claims processes and forge closer ties with consumers.

Taking their cues from banks, which offer smart phone banking services, insurers are looking to smartphones, digital pens and social media-based microinsurance for enhanced insurance services according Celent analysts. In some cases, they are taking advantage of established technology, like smart phones, or delving into new digital territory to improve business processes, they note in a new report, “A Snapshot of Innovation: Insurance Market Scan for 2009.”

New innovations, not-so-new tools

“Innovation in insurance should focus on using smart technology to support business model innovation,” the analysts—Catherine Stagg Macey and Nicholas Michellod—note.  “A great example of this is the use of GPS in usage-based insurance. GPS was not a new technology, but the innovative application of it created a new business model in motor insurance.”

Many insurers are eyeing smartphone for their foray into digital innovation. Several U.S. insurers–like Nationwide, Farmers and American Family—have  developed iPhone and Blackberry claims applications for the phones that let policyholders use phone cameras, GPS and email to take photos, pinpoint the accident location and fill out a first notice of loss, and submit all the information from the phone.

For now, according to the analysts, insurers gain  “brand and marketing” value from the apps since few insurers have the applications. But the long-term value goes beyond customer service, they point out since, “independent producers [brokers] choose to place business with insurers who simply ‘make it easy to do business.’ The smartphone is a business tool in the field, and if it offers rich functionality to the producer. This is a clear advantage over insurers that do not offer a similar service.”

Social networking, savvy selling

Insurers in Europe are also looking for a similar advantage online, where Generali France has launched a social-networking microinsurance site in September 2009. The ‘kontsurnous’—SMS for “compte sur nous” or “you can count on us”– lets users join hobby or special interest groups on the site– similar to a Facebook group—and buy their home or auto insurance through that group. Each policy purchase nets them points, which they can redeem when they make a claim, to reduce their deductible.

The benefit?  Generali France will gain “a deep understanding of online customers,” the report notes, adding that the group dynamics might also yield interesting information:   “Will people generating no car insurance claims regroup in a specific tribe (called “Safest kontsurnous Drivers,” for instance) to avoid being penalized by bad drivers, or will the social co”nscience of people push them to accept the community rules?”

Insurers could soon take their tech-based innovations further, using avatar “digital assistants” on their sites—to help consumers fill out forms or answer questions about products and services– following in the footsteps of retailers like Ikea. Digital pens, that capture keystrokes, and images with a built-in camera, are also a valuable tool for field-base staff, the report notes.

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