In terms of the informational apps, Rao suggests insurers should look at them just as they have looked at the call center vs. online channel debate in the past. “This is a channel people are using more often these days,” he says. “It's getting more and more popular.”

Rao's complaint about some of the earlier apps is they didn't bring anything new to the equation. “You could go online and find that information rather than looking at your mobile app,” he says.

Newer apps still have an information focus but are getting more location specific to where the user is when accessing the app. “People are looking for location-specific information, such as GEICO's app, which offers information on the nearest tow truck if the user has an accident and is stuck in the middle of nowhere,” says Rao.

Another change in apps for some developers is the gravitation toward game and entertainment-type content and ways to keep the consumer engaged. “You see these games coming up both on iPhone and places like Facebook,” remarks Rao. “Some companies are openly branding them as they try to keep the consumer engaged and entertained. All of these offer specific value to the consumer. The question is whether it is a specific value to the insurer.”

There is value to carriers, he contends, but more in the area of marketing and branding. “Insurance is something people don't normally think about as much as they think about banking,” he says. “It's harder to get the consumer to come to them. These apps are ways to engage the consumer more often than in the past.”

In terms of investments, Rao points out as far as the front-end systems are concerned, the informational or educational kinds of apps don't represent a huge investment for insurers. “It's a couple of months and a couple of people–easily less than a million dollars in investment,” he says.

However, if an insurer is looking to offer transactional services in a mobile app–which Rao anticipates is the next trend–it will become more expensive.

Some companies are starting to develop claims apps, he observes. Users can take a photo with their iPhone camera and send it to the carrier; a form then pops up on the screen for the user to fill in, and the claim is filed.

“That involves a lot of back-end integration, security, and the ability to make sure the user has been authenticated,” says Rao. “It also means looking at fraud issues to make sure the photo that was submitted with the claim is real.”

While there is a price attached to such apps, some insurers will be able to use their Web-based transaction system as a mobile application if the solution was architected in the right way, explains Rao.

For example, he notes, insurers should allow for content to be mobile enabled when they build their Web system and to have interfaces with the back-end system that are not closely tied to an online channel or a call center. They also need to have a service-oriented architecture, so if there are tools that come with online and mobile apps, they can leverage them. “That's how some insurers can be much faster implementing these apps than others,” says Rao.

As far as mobile developments, Rao indicates the only thing insurers are concentrating on now is to mobile-enable their Web sites. “If there is a mobile version of [the Web site] that can be loaded given the limited bandwidth of devices, that's what they are focusing on,” he says. “If you look at the market projections, the penetration of some of these smartphones is going to continue to increase, and in a couple of years, you are going to have a market that will be substantially bigger. For insurers, given the time it takes to do some of these systems, it will be time to get some of these apps on board.”

Some insurers have developed apps for the BlackBerry phones, Rao continues, but he asserts those tend to be less popular than the iPhone. “It's just the way the architecture is done, and Apple, with its more open platform, basically cornered the market for the app market,” he says. Google is trying to get there, but the Android phone is more expensive, and it depends on how many handset providers adopt the Android platform.”

iPhone still trails BlackBerry in the smartphone market by a 42 percent to 27 percent market share, according to Rao, but he expects that to turn around in Apple's favor, citing a survey conducted by Crowd Science that showed 39 percent of BlackBerry owners would make their next purchase an iPhone.

Robert Regis Hyle