The response: "This is an area we have not entered into as of yet. We hope to be able to extend services to customers that add value and streamline the claims experience. We have to be careful not to spend resources on projects that customers aren't interested in or never utilize. You may be able to develop something you think is really super, but if customers don't use it, resources have been wasted."

There are a couple of interesting points in this quote. As communication becomes easier for customers through a tablet or a smartphone, it is hard to believe insurers can afford to go much longer without—at the very least—a First Notice of Loss app. No matter what size insurance carrier you are, if you expect to retain your customers after a claim has been filed, you need to get the process started immediately and there is no faster way to do that than by a smartphone at the scene of an accident.

A second point that we sometimes fail to recognize came in the second half of the quote: Smaller insurance carriers can't afford to make mistakes when it comes to spending money on software. Budgets only go so far and tier three insurers—and even some tier two—don't have the luxury of investing in what they perceive as extraneous services.

Fortunately, most small insurers know their market as well as anyone. Their research is not done through marketing firms as much as it is done through talking with their customers—both agencies and policyholders.

Still, smaller carriers have traditionally prided themselves on customer service as their differentiator. Such service needs the best communication tools possible.