Sam Barrett explores how brokers can make the best use of app technology and looks into how to secure customer engagement.
Apps have transformed everything from how we plan our day and communicate with our friends through to how we shop and relax. While the insurance market has struggled to compete with the likes of WhatsApp and Candy Crush, this is beginning to change, with benefits for customers and brokers.
Meeting customers’ needs is key to a successful insurance app. “Customers’ phones are full of apps so you need to ensure you can compete for space with all of these,” says Mike Joseph, managing director of Right Choice Insurance Brokers.
“To do this, an app must take care of all their insurance requirements and be really easy to use.”
An end-to-end self-service model is essential, including functionality on everything from quote and buy through to claims and renewal.
This might include claims assistance, guiding customers through the information and photos they need to submit to support a claim, but also document storage to ensure everything is in one place and easily accessible whenever they might need it.
Apps also need to offer a more intelligent and personalised approach to arranging cover. “Consumers are used to buying digitally, with around 80% of them set to do this by 2020,” adds Jon Goodchild, partnerships director at Fresh Insurance.
“To win their business, you need to offer a smarter and more flexible experience than they’d get from the aggregators. It has to be about more than price.”
This intelligence could be used to simplify the application process. For instance where they are able to hold all of their insurance covers through the same app, it could use existing details to reduce the number of questions they have to answer. Claims processes can also be slicker.
Goodchild explains: “Apps could automatically arrange payment of an excess or allow a customer to upgrade their replacement items if they wanted. It could be a much more engaging process.”
As well as giving them the functionality they need, successful apps must also address the fact that insurance is very low-touch. Unless a customer needs to make a claim, they might only interact with their insurance on an annual basis.
“You can’t build a successful app on an annual interaction,” says Gary Humphreys, group underwriting director at Markerstudy. “You have to find a way to engage them more frequently or the app will be deleted long before they get to renewal.”
There are several ways to address this. For instance, Markerstudy increases customer engagement with its Trice app by enabling them to take out temporary and multiple covers.
Similarly, some products are more suited to the app environment. Goodchild explains: “We offer a telematics product and customers regularly use the app to see their score and find out about their driving performance.”
Where there isn’t an obvious reason for an app to be used regularly, one needs to be created. Regular communications could include insurance related messages such as cold weather advice or information on the nearest fuel station.
“You can learn more about your customers when they use an app so you can send them messages that make them feel like an individual,” explains Ian Donaldson, managing director at Autonet Insurance Services.
“For instance if they’ve been on booking.com,” he explains, “you could send them messages about travel insurance and if they’re constantly in a particular location it might suggest they’re a dog walker in need of pet insurance.”
Appealing to consumers is essential but, in the insurance space, successful apps must also meet brokers’ requirements. “An app must make it easier to do business with our customers,” says Goodchild.
“Some insurers see apps as supporting the direct route but brokers account for a huge distribution channel in the personal lines space. Consumers want that choice.”
Developing apps from scratch also requires significant investment, which means that white-labelling is seen as a major plus. “We’ve confident in developing our own apps but a white labelled app can help to take some of the learning away,” says Donaldson.
This also enables a broker to offer a broader range of products. For instance Humphreys says that while his firm has relationships with around 2,000 brokers, the majority are motor focused. “Few would bother with pet or gadget insurance but by including them on our app they can easily offer these products to their customers,” he adds.
As well as being able to brand the app, brokers also want to be able to customise it further, adding their own products and services. These could include other insurance products but also services such as legal advice. For example, Joseph is looking to add breakdown cover as a natural extension to motor insurance. “Offering a broader range of products helps to build a stronger relationship with our customers,” he says.
“Every time a customer goes through a site not controlled by you, you run the risk of losing them.”
The transparency of the technology surrounding apps also makes it very easy to see whether an app is successful or not. Customer usage can be monitored, showing how often they use the app but also giving details about how they use it.
This insight can be a valuable tool for brokers.
For example if a customer looks at a pet insurance product but doesn’t buy, you could offer an incentive or send them communications relating to pet ownership. Similarly, where someone hasn’t used the app for a while, it could be an ideal opportunity to remind them you exist.
Humphreys says this insight can support a much more dynamic relationship with customers.
“Apps are a great way to test ideas,” he says. “You can see instantly whether something works but also where you might need to make changes.”
Being able to get instant feedback could have even more significant implications for the insurance market.
“In the next few years I can see an app challenging the traditional way of buying insurance,” says Goodchild. “It could be something completely different but, thanks to the insight and flexibility offered by apps, it will definitely be something that meets customer requirements.”
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