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Jun 2015Insurance Trends: What’s Big about Big Data?
Nothing’s hotter in insurance right now than big data. That’s something Insurance Networking News made perfectly clear last month in their series on the topic.
“If there were a competition for breathless hype in technology, big data would be the current champion,” INN said. ”And though the phrase is ubiquitous in boardrooms and IT departments across categories of companies, the insurance industry is in many ways taking the lead in getting real business value from the volume, velocity, and variety of massive datasets.”
Why is it so popular? Seven reasons come to mind.
1. New (or improved) functionalities. Progressive has pioneered two functionalities that are relatively new to the insurance industry: telematics and web-based quoting and sales, all of which “lean heavily on big data technology.” For other insurers, big data has also proved its worth in existing functions like customer communication, web design and direct mail.
2. Deeper insights. “A lot of what we talk about is having our data more integrated so it can be shared across departments,” said Floyd Yager, chief data officer at Allstate. “Something meant for a single purpose often leads to other insights.” In his experience, big data positions insurers to understand who their customers are and how better to serve them.
3. Reduced costs. Claims and fraud management, cyber risk, customer management, pricing, risk assessment and selection, distribution and service management, product innovation, and research and development – these are all areas where Swiss Re has leveraged big data “to help reduce costs and improve the efficiency of current processes throughout the insurance value chain.”
4. Streamlined reporting. Reporting and analytics aren’t new to the industry – far from it – but the ease of use that big data adds to this area certainly is. According to INN, subject matter experts said that big data can equip insurers to “circumvent exhaustive data cleanup efforts that previously have stymied reporting and analytics efforts.”
5. Internal efficiencies. CNA is using big data on the company side to improve workers’ compensation claims and adjusters’ notes. “That is a classic, unstructured big data kind of problem,” said Nate Root, SVP of CNA’s shared service organization. “We have hundreds of thousands of workers’ compensation claims, and claims adjuster notes, and there is tremendous value in those notes.”
6. Innovation. Riccardo Baron, big data and smart analytics lead for Americas at Swiss Re, said that the significance of big data “has to do with innovation, and how we believe newcomers in the insurance industry could potentially disrupt traditional business models.” In other words, it’s one of the forces charting the future of the industry.
7. Heightened customer value. Life insurance is a segment where attracting new customers has been a real challenge, due to an “onerous underwriting process” that can involve “inches and inches of paperwork” simply to produce a risk classification. When John Hancock introduced telematics through wearable technologies, they gained a “wealth of data” that not only facilitated underwriting, but empowered customers “to improve their rate as they improve themselves,” exchanging data for real value.
Insurance telematics is one area where the benefits of big data are pulled crisply into focus. All of the benefits above – new functionalities, deeper insights, reduced costs, streamlined reporting and efficiencies, disruptive value and customer rewards – come into play, whether you’re talking wearable devices from a life insurance company, or a UBI smartphone app that encourages safer driving habits.
To learn how smartphone UBI could transform your picture, click here.
03
Jun 2015How Auto Insurers Can Capture the Booming Senior Market with UBI
Mileage and claims. There’s a big correlation between the two, as any insurer knows. Yet the standard pricing model barely distinguishes between drivers who log only 5,000 miles a year and those who log 20,000, said Becky Yerak of the Chicago Tribune.
That’s a problem for anyone who drivers fewer miles than most – particularly seniors.
Older drivers … a menace behind the wheel? Not so much.
It’s not uncommon to imagine seniors as a menace behind the wheel, but the numbers don’t necessarily support that bad rap. As pointed out in our last article, studies have shown that senior drivers have fewer crashes and are less likely to be injured or killed than middle-aged drivers ages 35-54, because:
1) Seniors drive less often and for shorter distances
2) Seniors tend to avoid inclement weather conditions and night driving
3) Seniors tend to self-limit their driving if they experience limitations in their health or vision
4) Seniors are the most experienced drivers, making them safer on the road than younger drivers
Sometimes insurers offer seniors an age-based discount. But we think they can do better.
We think seniors deserve premiums that are based on their safety records.
When the Consumer Federation of America shopped insurance for a hypothetical 30-year-old woman, they found that astonishingly, Farmers, Progressive and Allstate offered her the same annual premium whether she drove 5,000 or 20,000 miles a year.
Compare that to usage based insurance pricing, which rewards low-mileage drivers with what can amount to “hefty” discounts, said Mark Williams, a Columbus Dispatch contributor. While “most participants will see discounts of 10 to 15 percent,” those who drive relatively little could save 30 percent, even as much as 50 percent.
That’s great news for seniors, who, according to the Federal Highway Administration, drive an annual average of only 7,646 miles.
Offer a more competitive package to an ever-expanding customer base.
It’s no secret that the elder population is growing. The “90-and-older population nearly tripled” since 1980, “reaching 1.9 million in 2010,” said the U.S. Census Bureau. By 2030, we expect over 57 million to celebrate their 70th birthday, adding up to “30 percent more drivers aged 70 and older on our roadways.”
Insurers offering UBI-based discounts can give this customer base a much more competitive premium than those using the standard pricing model. It’s only a matter of time before the older population takes it for granted that UBI is simply a better deal, given their needs.
Bottom line, with usage based insurance you can position yourself to make a much better offer to a market whose numbers are constantly on the rise. Reward older drivers for their low annual mileage, and tap into a demographic whose track record is among the best.
Learn more about key advantages of smartphone UBI here.
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May 2015Usage Based Insurance Data: Highlights from the Lead Foot Report
One of the great advantages of usage based insurance is analytics. Usage based insurance (UBI) offers insurers a depth of information that’s never been accessible before, with new ways to evaluate driver risk, attract better drivers in the first place, incentivize safe behavior and reduce claims.
Progressive was an early adopter, so they’ve had some time to accumulate data. Now, they’re sharing some insights with the rest of us. Here are the usage based insurance data highlights from their Lead Foot Report.
Braking takes longer than you’d think.
When maintaining a following distance, the standard advice is to stay three or four seconds behind the car in front of you. The reason is that if you’re traveling at 60 mph, you’re going to continue nearly 500 feet before you can come to a stop.
UBI data just turned that on its head.
Why? Because most drivers traveling at 60 mph took 24 seconds to come to a complete stop, according to the Lead Foot Report. That’s more than four football fields’ distance (1,260 feet to be precise), or enough time to sing several rounds of “Happy Birthday.”
That’s the average. The most gradual stops took as long as 40 seconds. All told, it’s probably a good idea to add some cushion to that following distance.
The most important metric for predicting future crashes?
While UBI can’t sense a vehicle’s following distance, it can certainly detect hard braking – a crucial insight.
When drivers brake hard – we’re talking “the most aggressive one percentile of all stops” – the report showed that it took 12 seconds to get to a standstill. That sounds like a pretty good number, until you ask why drivers had to stop so fast in the first place.
Most hard-braking incidents are related to tailgating: a high-risk habit. In fact, out of all the usage based insurance metrics, hard braking showed the strongest correlation with collisions. That’s useful information for insurers to be sure. Drivers who make a habit of hard braking are high-risk customers, and more likely to initiate claims.
Other metrics may prove invaluable, too, down the road.
As insurers discover new ways to leverage usage based insurance data, other metrics are likely to take on new significance in assessing risk and minimizing auto insurance claims.
“We’ve gathered billions of miles of driving data and are only just beginning to scratch the surface … of the types of predictive behavior our … analytics can reveal,” said Dave Pratt, general manager of UBI at Progressive.
For example? The best teen drivers drive much more safely than risky subsets of other age groups, despite the stereotype that teen drivers are inherently risky. And conservative male drivers brake hard a full 77 percent less than aggressive female drivers.
To learn more about this study, watch the three-minute Lead Foot Report video. Click here
26
May 2015Industry Insights: Auto Insurance Report National Conference
If you attended the Auto Insurance Report National Conference this month in Florida, you already know that the event was a huge success. As always, Brian and Tracie Sullivan put on an outstanding show, with the purpose of helping all of us understand just where the auto insurance market is going.
As you might expect, usage based insurance was among the notable topics discussed. In his presentation on usage based insurance, Brian Sullivan took us back to 2013. In his words, “It was one of the last few moments that we were all sure that the OBD dongle was the solution.” He explained that until 2013, the mobile movement seemed a bit far-fetched so it was easy to be confident in hardware. But around 2013, everyone started taking note: Mobile services seemed to really work. That was the first time that smartphone UBI seemed like a real possibility. In the following paragraphs, I’ll recap a few more interesting insights from Sullivan’s presentation.
Waiting and watching? Progressive is going mobile.
Of course, Progressive was the first out of the gate on usage based insurance. Sullivan commented that from a discount perspective, the company is better positioned to offer UBI than most. They have lower retention rates so discounts aren’t as painful and they have a relatively high-risk policyholder base compared to other top insurers. With that in mind, many insurers adopted a wait and see stance. “Since UBI won’t benefit us as much as it is going to benefit them, the prudent thing to do is to let them figure it out,” Sullivan said, explaining the attitudes of everyone besides Progressive.
Among other things, carriers have been watching Progressive’s OBD vs. smartphone UBI decision. Sullivan noted there are many reasons that insurers want to try mobile UBI, starting with the high cost of the dongle. “It’s still expensive and you have to ask people to provide their credit card and information so you can mail the device. Then they had to hang upside down and plug it into their cars. Compare that to telling drivers to go to the iTunes App Store, or to the Android app store to download it and be on their way,” he explains. Obviously mobile is much more budget and user-friendly, but still the industry has waited to see Progressive’s next move.
Sullivan explained that 18 months ago, Progressive invited mobile UBI providers to demonstrate their capabilities. After reviewing the options, they whittled it down to two or three vendors. “I believe that they’ve made the decision,” he said. “At some point soon, soon being the next couple of months … we will know who Progressive has chosen as its mobile app developer.”
Based on personal mobile UBI experience, the technology is more than ready.
Sullivan related his own experience with mobile UBI saying, “I’ve tried a number of mobile apps and they’ve all confirmed that I’m a terrible driver. I’ve never had an accident in my life, but apparently all the data is pretty clear that I drive too fast, I brake too fast hard, and I accelerate too much. My cornering is not too great either.”
In his presentation, Sullivan also addressed the issue of battery drain – one of the key reasons he didn’t believe in first generation versions of the mobile app. “I can tell you, I’ve run a number of these and the battery drain is negligible. The daily battery use is very modest and the connectivity is terrific. And every day that passes, the ability of your phone to gather data about the way you drive will become easier. It will use less and less of your battery, it will use less and less of your data plan, and it will capture more and more accurate information every passing day,” he said.
Turnkey solutions now available – including Deloitte’s end-to-end solution powered by Driveway.
Sullivan discussed the seemingly overwhelming challenges of modeling, scoring, contextual monitoring, pricing and safety communication with policyholders before mentioning the following solution:
“What’s exciting is that we are starting to see turnkey solutions for small carriers … Last week Octo Telematics announced a turnkey on-board diagnostics system.” He went on to explain that Deloitte also launched a turnkey solution for carriers powered by Driveway Software smartphone UBI technology. “We are starting to see where you can buy these products as an off-the-shelf solution. With the smaller carriers, you don’t develop it yourself, you turn a switch and have a system,” he explained.
Offense vs. defense.
Sullivan acknowledged that not everyone will benefit from UBI like Progressive has and that many are simply entering the UBI market as a defensive move to avoid adverse selection. He predicts: “We are not going to have the clear picture of adoption until 2018 or 2020. It’s going to take a while for this and it’s all because we were steaming forward, then mobile came along and confused the picture, and now we are going to go through a period where both of them will exist until we find a winner.”
Sullivan on Driveway and Deloitte.
Incidentally, one of the apps that Sullivan tested was our very own Driveway app (Drivewise.ly – drive with friends). Here’s what Sullivan had to say about that specific experience when he emailed our CEO, Jake Diner:
“By all means go ahead and tell people that I conducted an extended test of the app and was impressed with the accuracy and thoughtful execution.”
He also commented on the Deloitte end-to-end solution (powered by Driveway) saying:
“Deloitte walked me through the interface they have built with insurers, and I also found that to be very effective. They showed me what I thought was the most mature interface I have seen.”
So to recap the recap …
- Smartphones are THE way to go for UBI if we trust the direction of the UBI pioneer, Progressive.
- Now is the time to get started to be a quick follower rather than a late adopter.
- The mobile technology is more than ready.
- End-to-end solutions are now available so carriers don’t have to reinvent the rating wheel.
Interested in knowing more? Contact us.
19
May 2015If You had Sex in the Back Seat … Would Your Insurer Know?!
Ever since the Internet of Things became a thing, the tension between telematics and privacy has been on some people’s minds. As it turns out, fitness monitoring devices have the potential to share, oh, so much more than you’d assume.
Does your fitness monitoring device kiss and tell?
We’re talking about the wearable devices that track lifestyle activity throughout the day, calculating just how many steps you take, calories you burn and foods you consume.
Now that this type of data is available, life and health insurance providers have an opportunity to harness it, offering customers personalized rates in exchange for wearing one of the devices in question.
In Johannesburg, for example, customers can share lifestyle metrics with insurers via fitness monitoring devices, earning points for healthy habits. The same service may be coming soon to the United States. It won’t be long before you could reel in a lower life insurance rate by letting your insurer track your health through a wearable device.
Not everyone’s excited about that idea, of course.
Kashmir Hill, Fusion contributor and senior editor at Fusion’s Real Future, has a concern and she spells it S-E-X. “First, insurance companies gave us black boxes to put in our cars so they could track our driving, in exchange for discounts when we refrain from speeding,” Hill wrote. “Now, they’re coming for our bodies.”
How much does your insurer know about your sex life?
Hill is referring to a funny TechCrunch article posted by Gregory Ferenstein, who inadvertently discovered that his sexual activity registered a recognizable pattern on his health-tracking watch – one that’s noticeably different from the patterns produced by his other activities, including yoga, weight-lifting and grocery-shopping.
“Were I married, my wife might like to know why I burned 100 calories between 1:07 to 2:00 a.m., without taking a single step, and fell asleep right afterwards,” Ferenstein wrote.
This observation didn’t bother him one bit. “For techno-optimists (like myself), radical transparency in sex is a welcome part of life: it will reduce cheating and prompt honest conversations about satisfaction,” Ferenstein said. “For techno-pessimists, it opens a can of worms (no pun intended) that people would sooner keep closed.”
Hill ,whose personal mission is “to prove privacy isn’t dead yet,” is presumably on the “techno-pessimist” side of Ferenstein’s coin. Either way, it’s clear that fitness monitoring devices are capable of divulging some pretty personal data with whomever is on the other end.
In auto insurance, we spell it UBI – not TMI.
While health and life insurers who connect their offerings to telematics data may end up knowing more about your personal habits than you meant to share, rest assured, auto insurers will not be listening in. What happens in the back seat stays in the back seat.
That’s because the data that UBI is based on is concerned with your car’s behavior – not your own. So, unless your sex life happens to affect your braking, cornering, speed or garaging location, your auto insurer will never be the wiser.
Contact us to learn more and subscribe to our e-newsletter for more usage based insurance updates.
14
May 2015Beyond Discounts: How to Differentiate Usage Based Insurance
It started with just a few innovative brands, changing the way insurance was done. But now, usage based insurance has taken the industry by storm. ABI Research projected that telematics subscriptions will make a mind-blowing leap from 5.5 million in 2013 to 107 million in 2018.
As a result, what was once a novel disruption is rapidly becoming a core offering, and brand differentiation is the word of the hour. Yesterday, customers were asking, “Do you offer usage based insurance?” Tomorrow they will want to know, “What makes your usage based insurance different?”
Brand differentiation in insurance telematics
Just about every usage based insurance program delivers a discount for good driving – that’s the fundamental value proposition of insurance telematics. However, to differentiate, an insurer must go beyond that.
How? According to an Epsilon infographic:
- 27.5 percent of telematics customers want a good driver discount.
- 25.1 percent want reward points and gift certificates from a UBI program.
- 57.4 percent want both.
“Consumers want to be recognized and rewarded for their loyalty and the money they spend with brands,” Epsilon Contributor Dave Edington said. “They also expect leading brands to present more relevant and personalized offers in exchange for the data they provide.”
The loyalty quotient
Based on their experiences in other industries, consumers may expect more from insurance than just insurance. To truly differentiate, insurers may need to build in personalized rewards, such as car wash coupons or other offers relevant to the driver’s geographical location.
Deloitte University Press suggests the following usage based insurance differentiators:
- Immediate feedback on driving safety
- Road condition alerts
- Roadside assistance facilitation
- Identification of lost or stolen vehicles
- Geo-fencing to allow electronic monitoring of a child or elderly parent’s location and driving behavior
Gamification is another potential point of connection and reward:
“Insurers could provide rewards for improvements in driving behavior, relative to their own performance as well as against the broader policyholder pool, certain segments, or even specific groups of individuals,” Deloitte University Press contributors said. “Insurers could thereby use telematics to make the customer experience more interactive, competitive, gratifying, and perhaps even fun—certainly not an attribute traditionally associated with insurance.”
The data is there. Now it’s a question of how to harness that data in a meaningful way to strengthen the bond between customer and brand. The answer will require creativity, but those brands that put in the brainstorming effort now will reap the benefits.
While the exact formula for differentiation is yet to be determined, one thing is for certain: As an efficient, agile, and wildly-popular communication tool, the smartphone is uniquely suited as a vehicle capable of achieving UBI differentiation. To learn more, download our free report, “10 Reasons to Unplug and Unburden UBI.”
06
May 2015Noteworthy Takeaways from New Study on UBI Telematics
The National Association of Insurance Commissioners (NAIC) recently released their latest study with the Center for Insurance Policy Research (CIPR). The topic? Usage based insurance of course.
The purpose of the new study, “Usage-based Insurance and Vehicle Telematics,” was to examine how UBI has changed the face of the auto insurance, from the impacts of telematics on the market to its implications for insurers, consumers and regulators alike. Below are key highlights.
New benefits, new risks.
The auto insurance industry “is undoubtedly undergoing a fundamental change,” the study said, resulting in more efficient risk-pricing and broad benefits to just about everyone involved. PHYD pricing “promises to benefit individuals, insurance companies and the country as a whole.”
Wait a minute. How could the whole country benefit from usage based insurance? Here’s one example: Simply giving consumers an incentive to drive fewer miles could result in the following societal benefits:
- Individuals are empowered to reduce their premiums.
- CO2 emissions fall.
- Traffic decreases.
- Fewer collisions improve public health.
- The nation’s dependence on oil becomes less acute.
At the same time, insurers that avoid bringing UBI telematics into their core offerings end up shouldering an unnecessary burden, “as companies failing to do so face fairly extreme adverse selection risk,” the study said.
It’s easy to see their point. Why would safe drivers who travel fewer miles at low risk times want to continue paying rates that reflect the average risk rather than their own risk? Why would safe teenagers want to continue paying exorbitant rates? Once UBI awareness increases, budget-savvy, safe drivers will rapidly migrate to UBI policies.
What role do smartphones play?
“Smartphones are an ideal telematics solution as they are typically equipped with a host of relevant sensors, such as GPS, accelerometers and gyroscopes,” the study said. “They also have large data storage capacity, or infinite with the cloud, and superior communication abilities.” Furthermore, they aren’t encumbered by hardware device or installation costs.
A few additional highlights.
The 86-page study covers a great deal of information, including telematics modeling and analytics, market observations, economic considerations, consumer concerns and regulatory implications. That said, here are a few quick takeaways.
- Most of the survey respondents (89 percent) said that UBI is available in their jurisdiction of the United States.
- California, New Mexico, the Virgin Islands, Puerto Rico and Guam lag behind in that regard.
- For regulators, data transparency is a crucial prerequisite to letting telematics programs into their areas.
- Smartphone telematics apps include features that make UBI programs more transparent.
- The main benefit for insurers is the ability to develop more accurate risk assessment and pricing.
To learn more about UBI in the auto insurance industry, read the report. To find out how smartphone UBI can transform your insurance business, click here.
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Apr 2015The Insurance Telematics Disruption: How to Survive the Big One
It’s coming. Experts have studied it. The question isn’t if, but when.
We’re not talking about a major natural disaster that may or may not occur sometime in the future. No, we’re talking about a change that’s making waves right now – the insurance telematics disruption known as UBI.
Already, usage based insurance is changing the industry landscape. “Most of the top 10 auto insurers have UBI programs,” Insurance Journal said. “According to Progressive, more than 1.6 million drivers have signed on to use its Snapshot product since 2008.”
But a big wave is only trouble for those who aren’t prepared to ride it. Here are three tips to help you survive the big one.
1. Understand the magnitude of the disruption. Just as experts study timelines, plates and magnitude to assess the impact of a coming quake, insurers must evaluate just how intense the telematics disruption is going to be. “IoT has only started to affect P&C insurance, but the situation is rapidly changing,” Property Casualty 360 contributors said last month. “A recent Strategy Meets Action study reveals that nearly a quarter of insurers are in some phase of IoT deployment. Broad scale IoT deployment such as usage based insurance (UBI) and other telematics solutions imply limitations to premium growth as discounts proliferate.”
Case in point: Snapshot users have increased from 20 to 35 percent in just two years. This isn’t an isolated incident. It’s an industry-wide transformation. As Strategy Meets Action put it, “Any company with a stake in the personal auto insurance business must recognize that usage based insurance (UBI) is a market disrupting force that will have a major impact over the next 10 years.”
2. Identify how imminent the disruption is. “To prepare your response and time your move, it’s key to estimate when these events will affect you,” Nicholas Evans, contributor to ComputerWorld, said in an article on technological disruption. “Is this something you need to act on immediately or something you should continue to monitor closely? Either way, it’s good to have a strategic plan and weigh all the response scenarios.”
Again based on SMA research, Insurance Journal summarized that “70 percent of North American property/casualty insurers are operating or planning UBI programs, and 75 percent believe UBI will ‘fundamentally alter the auto insurance industry between now and 2020.” That’s a mere five years away. Long enough to roll out smart, strategic changes. Not long enough to dawdle.
3. Build a survival plan you can count on. Preparing for a physical quake involves a range of preparations, from the simple (like bolting down your bookshelves) to the strategic (like making seismic upgrades to a structure). The same goes for industry disruptions. In the case of insurance telematics, the action plan is straightforward. It’s time to make usage based insurance one of your core offerings.
Wondering if you should go with smartphone UBI or OBD-based UBI? Our comparison chart helps break down the differences. Get it here.
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Apr 2015Who Drives Better, Men or Women?
That old saying about “women drivers” seems to have gone the way of the dinosaur – at least among insurance companies. It’s no secret that men pay more for their premiums. It’s no accident, either.
According to traditional insurance data, male drivers are more likely to get into severe collisions, resulting in pricier claims; hence the bigger premium that men pay when they get behind the wheel. But how accurate is traditional insurance data? Is it really true that women have won the driving badge in the battle of the sexes?
Traditional data says risk calculation is about quality, not quantity
It’s not that women make fewer mistakes than men – it’s that they make different mistakes.
In other words, women get in plenty of car accidents. But according to traditional insurance data, these are more likely to be fender-benders. Men, on the other hand, engage in riskier behaviors more often, such as speeding, not wearing seat belts, and driving under the influence. As a result, when men get in a wreck, they tend to get, well, wrecked.
“No messing around here: When men are at the wheel, crashes are more likely to end in totaled cars, costly medical bills, and well-fed lawyers,” Bloomberg Business wrote.
Here’s how the Insurance Institute for Highway Safety broke it down for 2012:
- Of the driving fatalities, 71 percent were male
- Of fatally-injured male drivers, 38 percent had a breath-alcohol content of over 0.08 percent
- Only 20 percent of fatally-injured female drivers did
- Of male drivers involved in fatal accidents, 23 percent were speeding
- Only 14 percent of female drivers were
Usage based insurance data adds a bit more insight to this picture
So are women better drivers? An infographic based on UBI data would say yes. After looking at “154 million miles of data over 40 million journeys and 19 thousand customers,” Wunelli found that compared to men, women:
- Exceed the speed limit 12 percent less
- Hit the brakes hard 11 percent less
- Drive on roads they know 7 percent more
- Drive 5 percent less overall
- Drive 28 percent less at night
Behavior-driven insurance: Attract better drivers with a fairer deal
In the past, drivers with a high risk profile just had to wait it out. Conventional wisdom was simply to keep up the good work and trust that over time, that premium will probably go down. Other pieces of advice have included choosing a conservative vehicle, building good credit, looking for “good driver” and “good student” discounts – and finally, price-shopping.
Pay-how-you-drive insurance puts a better option on the table. When a driver opts for usage based insurance, they can significantly shorten the time it takes for their price tag to reflect their behavior. For those who don’t fit their stereotype, that’s a huge draw.
No insurance company wants its best drivers to go hunting for a better deal because they’re disgruntled by rates they feel they don’t deserve. With PHYD insurance, they don’t have to.
Want to receive more great info about all the future of usage based insurance? Subscribe to our e-newsletter here.
20
Apr 2015Mobile App Engagement: New Study Provides Roadmap
Are you engaging your customers successfully with mobile apps? If you’re like most brands, the answer is no. That’s what a recent Forrester report suggests. “In 2015,” Forrester wrote, “marketing leaders who have embraced the mobile mind shift will accelerate spending to create an insurmountable gap between themselves — the industry leaders — and the laggards who view mobile as just another channel.”
Introducing the “mobile mind shift”
What’s a mobile-shifted marketer? One who leverages mobile to transform customer experience and drive business outcomes. Mobile-shifted marketing will be the crucial trend in 2015. Meanwhile, treating mobile as “just another channel” is rapidly becoming a dinosaur mindset.
That doesn’t mean we won’t be seeing a lot of dinosaurs. “Success stories will be few in number,” Forrester predicted.
Three ways to improve mobile engagement in 2015
- Rethink everything. We’re living in what Forrester calls “the mobile moment.” Mobile is possibly the most disruptive business technology since the Internet: It’s “forced businesses to completely rethink how they win, serve, and retain customers.”
- Give them what they want. This “mobile moment” boils down to what customers expect from the brands they engage with. They want the info, services and perks they’re looking for, in context, the moment they need them. To date, 18 percent of U.S. consumers already think this way, while another 30 percent are moving that direction. That’s just in the U.S. The mobile mind-shift is happening across the world.
- Deliver experiences. U.S. and UK consumers may use 24 apps on average, but they divide 80 percent of their time among just five of those. They have app fatigue: the volume of available apps is plain overwhelming, so they’ve narrowed it down to those that are most useful. Brands that are sensitive to this will focus on delivering experiences, not just info and services, and they’ll make them as seamless as possible.
How big is this going to get?
The scale of the mobile shift is fairly remarkable. Forrester observed that companies with lots of mobile users are “being acquired for astounding valuations,” while the most successful apps for customer engagement globally are being developed into platforms which stand to rule the mobile world.
These platform companies are pouring funds into tracking customer engagement and spending, aiming to crack the code on what makes apps work for consumers. “Observing behavior across so many phones offers unique opportunities to spot trends or early demand for products — or lack thereof,” Forrester wrote.
All told, businesses that want to stay competitive will need to re-engineer their approach “to deliver valuable mobile moments” to their customers.
How to begin? Check out this list from the media, events and research company StreetFight for ideas, and pay attention to point #6, “Enhance the user experience in real time.” See this article for more info on why real-time UBI calculation is a non-negotiable.
To learn more about integrating mobile with your insurance offerings, check out our OBD vs. Smartphone UBI comparison chart.