With the large number of Global Positioning System (GPS) enabled hand-held mobile devices, it would appear that this type of mileage verification tool could be greatly expanded to the benefit of policyholders and insurers alike. Issues, however, can crop up on “how and when to activate” as the mobile device only knows it is moving, not whether it is on a train, bus, boat or a passenger in someone else’s vehicle. Such mileage tracking applications exist today such as “Tap2Track” (Intuit) and “DayTracker” (Research Specialists Inc.), but these are largely designed for tracking mileage for mileage reimbursement and/or tax return purposes and their mileage tracking functionality must be activated and deactivated manually. These issues would not appear to be unsolvable and it would seem reasonable that an existing interface in a modern automobile (for instance the unique Bluetooth identifier for each Bluetooth enabled automobile) could recognize the mileage tracking application on the mobile device (also Bluetooth enabled) and then track vehicle movement.

Additional upsides could be offering the policyholder assistance with “smart driving directions” (either real-time or based upon regular trips) to help them save time, fuel and vehicle wear and tear.

As with any tracking type application, great care must be taken around the security of “where and when” data and ensure its use solely for appropriate and reasonable insurance operation practices such as policy rating and claims handling.

Other opportunities exist around property risks such as self transmitting alerts about hazardous conditions. Offerings such as ATT’s Home Monitor or Motorola’s HomeSight provide real-time alerts to subscribers and subscriber delegates based upon such critical inputs as basement water levels, wind and rain metrics, “temperature over or under”, motion detectors or door or window open indicators. With insured permission, simple algorithms could determine a “loss in progress” (for instance wind and rain sensors showing unusually high activity and basement water sensors activated) alert the insured, the insurer and dispatch loss mitigation service providers to the insured location.

Help Me Help You

One of the top complaints that insures often hear is that they are not easy to do business with compared to the “norm” of consumer expectations. This is where technology can be a boon for insurers and policyholders alike. Many insurer efforts are centered around “making mobile” business processes that have traditionally existed on paper, in the insurer or agent’s office or—more recently—on the Web.

For instance, “Nationwide Mobile” (Nationwide Insurance), is a free iPhone app available to customers and non-customers alike that provides step by step guide to handling any kind of car accident. In addition to the other driver's insurance and contact information, users can also store photos of the accident taken with the iPhone's camera and automatically record the location of the accident using the iPhone's built-in GPS and the app also includes a flashlight function.

Allstate, American Family, Esurance, Farmers, Hartford, GEICO, State Farm, Travelers and Progressive (to name just a few) also offer highly robust mobile applications, with a variety of valuable and interesting features and functions such as viewing of insured policies, bill payment, claim initiation and tracking, agent locator assistance, company contact as well as a links to the company’s Website.

An essential policyholder need that auto insurers mobile applications should respect is the need to show proof of insurance should the policyholder be in an accident, stopped for a potential moving violation or if required for renting a temporary substitute vehicle.

Some carriers have gone a bit further with their mobile applications. Progressive, for instance allows the viewing of crash test ratings for a variety of vehicles. State Farm offers “On the Move” which removes the temptation to read text messages when driving by—when activated—sending an automated response to incoming text messages and “Steer Clear” to help drivers up to the age of 25 improve their driving skills and become eligible for additional auto insurance discounts.

Adopting policyholders benefit through time savings and “anytime/anywhere” convenience. Insurers, likewise, obtain a high degree of benefit in terms of time savings, staff efficiency and cost reductions. From a cost perspective, a 2008 whitepaper by mobile messaging solution provider Clickatell (“SMS in the Call Center: How mobile messaging can increase profits and reduce costs immediately”) offers the following average cost comparisons for several popular customer service channels. Multiplying these costs by the millions of policyholder/insurer interactions each year makes abundantly clear the cost savings opportunities available to insurers around these modern technologies.

In addition, the ability to provide service via multiple methods of contact provides the insurer additional opportunities to fine tune their relationship with the policyholder via how the policyholder likes to interact with the company (call agent, contact call center, access via Web site, mobile application user).

In order to obtain the maximum benefit that new technologies can bring to the insurance value chain, insurers may do well to consider advancing the adoption of technology enabled “non-traditional” customer interaction methods by expanding the “sharing the cost savings” with their policy holders via reduced premiums, deductibles, etc. when a policyholder engages with the carrier via less cost methods.

Follow Me

Facebook and Twitter are probably the most talked about social networking applications in play today. The sheer volume of traffic makes their inclusion into any insurer’s “market reach” strategy very compelling. Facebook, for instance, cites more than 500 million active users (with 50 percent logging on to Facebook in any given day), an average user “friend” count of 130 and a total of 700 billion minutes per month spent on Facebook. This potential customer reach is even more greatly expanded with Facebook’s November, 2010 announcement that it has launched a messaging service which could make it the largest Internet messaging provider by providing users with an “@facebook.com” e-mail address and melding e-mail, instant messaging and short message service (SMS) so that users can manage all these communications vehicles via a single inbox.

Twitter also receives a great deal of market attention and indicates 175 million registered users and 95 million tweets written per day.

Thousands of words can be—and have been—written about how these social networking applications can provide value in the insurance value chain, but several important factors emerge.

• Provide Value: The e use of social media can come with perceived demands to create a high volume of content. Certainly the more followers an insurer can consistently obtain increases the market’s awareness of them, but this should be tempered within fundamental value considerations such as “why is this of valuable to this user community?”, “what action is it that I want the recipient to undertake?” and “why is this action of value to the recipient?”
• Be True to the Message: Make sure that you can back up the promise of what is being offered and that it is equal with the service and/or opportunities provided by similar types of contact channels offered by the organization.
• Be Consistent in Demeanor: Social media is largely about people connecting with people. From a company perspective this means that social media is more about the personality the brand than necessarily the brand itself. So it is important for an insurer to define and be consistent to with their “personality” and “voice”. The voice can be casual, serious, chatty or reserved, but it needs to be personable, consistent and in alignment with all other outreach that insurer undertakes to the market.
• Remain Fresh and Pertinent: Social media is “right now value” related. Insurers need to consider content based upon the immediate needs of the individuals that they are reaching out to. For instance if a big snowstorm is approaching a specific geography, pushing out tips to users in the affected area on home winterization or winter driving tips can have a high value coefficient. Sending this information to all users (or in the heat of summer) is likely to have a much lower perceived value by the recipient.
• Monitor and Respect Regulations: There will likely be some shake-out in the months to come around where and how regulators will respond to social media use in the insurance value chain. Is an “I like” on Facebook an endorsement? (and potentially a violation of insurance law), are there potential differences in regulator treatment around static information on a Facebook post (potentially considered advertising) vs. “interactive discussion”? In this area, insurers are probably best advised to remain fairly conservative and maintain close relationship with their legal advisors.
• Be Secure, Be Very Secure: Today’s headlines are full of the dangers of inappropriate distribution and use of customer data. Social media data must be securely protected and used specifically as indicated within the social media networks requirements and within the advertised reasons. This threat is exacerbated when social media sites are accessed via mobile devices. In fact data audit, security, and regulatory compliance solutions provider Imperva in their whitepaper “Security Trends for 2011” states “we expect exponential growth in the number of incidents related to mobile devices in the next few years. From theft or compromise of information in these devices, through massive infection campaigns, and up to frequent exploit of the vulnerabilities introduced into the server side.” Adding to this concern is the expanding world of mobile enabled devices and their operating environments.

Conclusion

There is a wondrous technology transformation underway that can bring significant value to both insurers and policyholders alike. Some technologies are well established and likely here to stay. Others are closer to the “this is cool” stage and insurers will likely undergo some additional evaluation as to where and how they can best be leveraged to achieve maximum value delivered to policyholders within the most advantageous cost effective, efficient and secure technology resource strategies.