Smartphone Insurance Apps – How Can We Make Them Smarter?

According to a recent representative survey by CSC among 1,000 insurance customers in Germany, close to 50% of consumers would appreciate to be able to submit insurance claims via their smartphones. The results are perfectly in line with a number of similar studies from a variety of research institutes. Why am I not surprised? If you present people with a promise to make their lives easier – who would say, No, thank you, Mister? Much more flabbergasted was I to learn that only “two thirds of the customers dread the ‘red tape’ when having to submit a claim with an insurance company using traditional methods,” as CSC reports in its press release. Honestly – have you ever met anybody who did not dread the red tape associated with insurance claims?

Indeed – smartphones are clever devices. Just think of the possibility of documenting a dent in the wing of your car with your mobile phone cameras and submitting it online for processing. No wonder almost 70 per cent of respondents liked that idea. No fewer than 83 per cent would like to be able to trace the processing status of their own claim online at any time.

Even three years ago, Swiss consultants Bain & Company found that between 19 and 29 per cent of insurance customers** were looking forward to mobile and other contemporary online services. Back then, 10 per cent expected apps for information purposes; 8 per cent, for consulting, contract conclusion, administration and claims management (sic!), respectively.

It was only in 1999 that a German cult TV ad with tennis icon Boris Becker (“Isch bin drin!” – “I’m in!”) marked the beginning of the era of nationwide privately available internet access. No more than 13 years later, traditional web-based services had beaten the by then only second most popular contact channel – personal on-site counselling – in three of the five areas; only for consulting, the score was still equal at 22 per cent. For administration, 35 per cent preferred the internet over personal contact (25%); for claims management, 32 vs. 23 per cent. It is a lesson how fast possibilities take root and become the standard: if the figures from both studies hold, expectations on app-based insurance services have increased more than sixfold within just three years.

For insurance companies, it is now crucial to respond fast. State-of-the-art digital services are no longer a ‘nice-to-have’ option. Not only are consumers becoming ever more demanding and willing to switch service providers in the event of the slightest dissatisfaction. Insurers can also hardly expect their customers to understand why they can’t get the same service level from their insurance company they are accustomed to getting from any old online shop these days.

Behind the scenes, of course, things are a little more complex. First of all, there is the matter of privacy. A fashion customer may be willing to take the risk of sharing online the information that her size-8 days are over. Embarrassing, should this fact be unwillingly divulged to the rest of the world. But not unacceptable, in view of the convenience of being allowed to return without hassle a frock ordered a couple of sizes too small.

Under no circumstance, though, do you want a prospective employer to learn about your genetic disposition to cardiovascular disease or other sensitive health data. And to what extent insurance customers are prepared to upload photographs of their upturned lingerie drawer in the actual event of a burglary remains to be seen.

Another challenge is the issue of trust. There is a good reason for all the red tape associated with insurance claims: credibility. Of course it is easier to document the dent in the wing with a photograph taken with your mobile; this will be the medium of choice in 9 out of 10 cases even today. But what do you photograph when your bike is stolen? The lonely lamp post where you say you left it? That would give the term ‘claim’ an entirely new twist in this context. You will still have to explain what happened: Was the bike locked properly? Have you reported the theft to the police? Are you sure you left it there and not three lamp posts down the road?

If this information is to be provided in writing, people may soon find that it is easier to do so using a proper computer. A mobile-compatible alternative might be voice recognition, the maturity of which for purposes of such complexity, however, is still questionable at this point of time.

No doubt technology providers such as ourselves will address issues such as security, privacy and complexity to everybody’s satisfaction in the foreseeable future. No doubt either that most insurers are busy defining scenarios to redesign their processes as I am writing this. However, to earn their customer’s trust and confidence, insurance companies must do more than just update their technology to provide a customer experience akin to that of Amazon or Zalando:

It is one thing to buy a pair of shoes on the spur of the moment or even make a bank transfer over a latte via the potentially insecure Wi-Fi of your favourite street café. All matters to do with insurance, however, require a significantly more responsible attitude and behaviour. And insurance companies ought to help their customers by educating and constantly reminding them of that.

Because the easier and user-friendlier procedures are rendered, the more will people be prone to forget that dealing with insurance matters is not child’s play. It will be smart to keep that in mind.


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