Life Insurers Not Going Mobile, Risking Relevance

Life insurance smartphone apps and texting functionality for consumers have languished as insurance companies overlook mobile channels to engage and communicate with consumers.

That mobile channels for consumers have taken a back seat, at least for the time being, is unfortunate but may have more to do with a misguided approach than outright neglect, said Samantha Chow, a consultant with Aite Group.

“They think of it as a sales channel instead of as an engagement channel,” she said.

Life insurers, aware of developing a mobile strategy for smartphones, tablets and watches, have steered some precious dollars to portable platforms, but that has tended to flow to agents and distributors as opposed to consumers.

When it comes to consumers, however, even insurers will be the first to admit that mobile development has suffered.

“We are so behind digitally as a whole that we don’t have time to focus on mobile apps,” Chow quotes one insurance executive at a top 10 life insurance company in her report titled “Mobile Apps in Life Insurance: An Underutilized Channel.”

Too many insurers are not using their mobile channel, and even companies with a mobile presence suffer from improperly using the channel, Chow said.

And it shows.

Consumers Underwhelmed

A majority – 80 percent – of the 56 life insurance companies surveyed don’t have a mobile app geared to consumers, and for insurers with an app the consumer experience with that app is neither particularly memorable nor valuable, Chow’s research found.

Of the 11 insurance company apps reviewed by 56 life insurance policyholders, apps from Amica Life, MetLife, Northwestern Mutual, New York Life and Principal Financial were deemed to be of “no value,” the survey found.

Apps from Axa, Cardif, Globe Life and MassMutual were considered to have “some value,” and only one – from USAA – was considered to have a lot of value, the survey found.

Consumers reported that only two of the 11 mobile apps allowed functionality equal to the insurer’s website, but nine of the 11 apps allowed less functionality than the corresponding website, the research found.

Only 17 percent of consumers could find and successfully download the app among 41 insurers – and many of those insurers were among the biggest in the U.S., the research found.

The results are “depressing,” and the time has come for life insurers to pick up the pace, Chow writes in her November report.

Young consumers especially have little time for websites, but seemingly have all the time in the world for smartphones and at the very least insurers could develop their texting channel to engage clients with reminders.

Opening for a Conversation

Unlike property-casualty insurers where policy changes happen more frequently, life insurance policies operate on far longer time scales.

Despite much of the development going toward portals designed for desktop PCs, some life insurance apps allow for functionality, however limited, as desktop functions rapidly migrate to "palmtop" functions of mobile hardware and platforms.

Seven of the 11 mobile apps offered bill pay, five of the 11 offered change of address and four insurers offered recurring payment enrollment functions, Chow’s survey found.

Five of the 11 mobile apps report that their carrier can send text alerts through the phone, which gives insurers an opportunity to remind consumers of payments due, insufficient funds, credit card denials, beneficiary updates or policy lapses.

A text or subsequent phone response from the consumer opens the door for a two-way conversation and upsell and cross sell opportunities come out of that, Chow said.

“Life insurance carriers should be thinking of engagement not as a means for consumers to visit their mobile app frequently but rather as a way to stay top of mind throughout the life of the policy,” Chow wrote.

In a warp-speed era, how many companies have a 30-year client relationship and an opportunity wish policyholders a happy birthday every year for 30 years?
Life insurers do.

Glimpses of Forward-Thinking

Insurers aren’t blind to the value of enabling mobile channels, and some are forward-thinking enough to realize that apps, that staple of the mobile platform, aren’t necessarily the best solution for the young and impatient.

At Legal & General America, which is beta testing SelfieQuote, the idea is for the company to issue a life insurance quote based on a selfie.

An algorithm returns a premium estimate based on and age, gender and body mass index – all without an app.

Downloading an app just to take a selfie was deemed too cumbersome, said Jim Galli, executive vice president of business strategy and innovation at LGA.

“We are extremely focused on all things digital,” Galli said. “Everything we're doing now and even the older stuff is becoming mobile-enable, from text notification, text billing, text payments – making sure it's fully mobile enable.”

InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].

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Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].