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Mobile technologies are still cutting - edge/ emerging vs. operational for insurance companies. Most initiatives have been very basic in nature, such as a simple mobile site or mobile app (i.e., an insurance calculator). focus has been on creating a mobile presence vs. leveraging mobility as a viable revenue -generating channel.
The
We hear a lot of buzz around mobility, but is this just another bubble? Why should my company undertake a mobile initiative? What will the true benefits of mobility be? How much investment would a mobile initiative require? How do we accurately quantify the return on such an investment, considering that there arent many precedents?
initiative. These questions can help answer whether such an investment is being applied toward a fad or a proposition that will be useful to the business, if not even a competitive advantage of sorts.
For sure, these questions are valid, since there is a very real investment required by a mobility
GAPS
Figure 1
This framework can be modified for different capability parameters that can then be used to assess the existing state of an insurers mobile maturity. The parameters should be defined based on the specific capabilities being considered for mobile enablement. The framework provides a clear understanding of the following:
based on either where the insurer wants to be or the level reached by another insurer that is considered a leader in mobility adoption.
The current state of an insurers mobility enablement and a depiction of where the company wishes to be. The to -be state can be
Figure 2
Implementation Waves
WAVE 1 WAVE 2 WAVE 3
AGENT SERVICES
Product information and brochures Information gathering Need analysis and illustrations Quotation Application submission Lead and prospect management Training: news and updates, info snippets Interactive training (including videos) Branding and campaign management Commissions Notifications Customer management: app status, new business reports Customer management: reminders, policy inquiry, claims Self service Product information and brochures (interactive) Agent/office locator Branding, games / educational Financial calculators Quick quote Notifications- reminders Underwriting approval Agent business level Application status Notifications-reminders Business dashboard
AGENT TOOLS
CUSTOMER SERVICE
INTERNAL USERS
Figure 4
Microsoft is also making a strong statement with Windows 7 and 8 devices, which we believe will be a force to consider in 2013. Here, the segmentation of users would assist in deciding the target platform. The rule of thumb is that, if it is a consumer-facing app, the strategy adopted should support all current and future platforms. However, if the devices are under the control of the company (i.e., company-issued tablets), then specific platforms can be targeted. From our experience, most insurance companies have adopted the BYOD (bring your own device) approach, especially for agents, which reduces asset management costs but also means that maximum coverage needs to be provided, and the platform should be market-driven vs. company-driven.
App or Web site: The choice between app or Web site is clearly one of end-user experience vs. cost of maintenance. While HTML5 Web sites are certainly improving, the architecture of a Web site today makes it challenging to replicate the experience of a native app. However, HTML5 Web sites are clearly the easiest to maintain, since the target platform is no longer important. From our experience, it is typical to use different approaches for different users, with the ultimate goal being user satisfaction and, hence, higher adoption rates. Target platform: Many customers first choice of platform is iOS (both iPhone and iPad). However, Android is a strong contender, considering its increased adoption, its ongoing evolution and the number of device makers supporting it and its growth in developing markets in China and India.
Target user group: The last decision that needs to be made is the order in which user groups are targeted.
Once these decisions are made, the choice of technology approach becomes fairly straightforward. Since mobility has been driven by consumers, who are accustomed to easyto-use interfaces, fast response and stable platforms, it is very important that the technology approach delivers on these expectations while
optimizing the costs of maintaining the technology infrastructure. To achieve this with currently available technology, economy of scale becomes important. The winner will be the technology that can cover the broadest
base (including multiple user groups) while providing relevant priorities. In addition to the traditional strategy of choosing one dominant platform, three other approaches should be considered (see Figure 5).
Figure 5
Step 2
Identify Quantitative Benefits From this list of benefits, identify quantitative benefits (i.e., reduce data entry effort, increase number of customer visits). At this stage, do not look at the big picture -- focus on the immediate benefits.
Step 3
Identify Contributing Qualitative Benefits For each quantitative benefit, identify the qualitative benefits that contribute to it and arrange into a tree structure. Connect the functionality to the benefits to draw a line of benefit for each type of benefit functionality planned.
Step 4
Big Picture Of Benefits Consolidate the quantitative benefits to see the big picture or the main benefits that will exist for any insurer, (i.e., increase revenue, reduce cost). This is what the insurer is working toward.
Step 5
Benefits Parameterization Key step: every quantitative benefit must have a formula to compute how the benefit is achieved. Each parameter in that quantitative formula should ideally be backed by actual studies conducted by the insurer or be based on some empirical precedent, to ensure credibility.
Figure 6
Benefits Framework
Benefits Benefit Levers Quantitative Benefits Levers
Increase customer visits (improved scheduling and planning) Increase agent productivity Increase Revenue Increase prospect conversion by agents Reduce
Increased customer facing time Gain Intelligence from lost deals Information at finger tips to agent .............
1. Lead management 2. Product info and brochures 3. Information gathering 4. Application and submission 5.
6.
.............
2. 3.
Reduce
4. 5.
2. 3. 4. 5.
Keeping the customer engaged Increase customer loyalty Easy access of info to customer
6.
Faster claims processing and response Easy access of info to customer Enhance efficiency of claims processing
3. Data of risk and loss details 4. Processing on field data and sending to back office
Figure 7
The benefits framework in Figure 7 provides a sample view of quantitative analysis that can be performed for an insurer based on the stepwise approach. It can be expanded for additional benefits that align with the insurers value chain. For any insurer looking to create a business case for mobility, this framework can help maximize
the impact of the investment. Costs for mobile initiatives: We have developed a framework to analyze the costs of implementing a mobility solution. Such a framework consists of three primary components: Licensing, development and hardware (see Figure 8).
Cost-Analysis Framework
Cap - Ex Licenses Op - Ex
Adjustor
Customer Services
1.
Agent Services
1.
Agent Services
From our observations, the bulk of the costs would be incurred in the first year (license costs, development of key functionality), while ongoing maintenance costs (based on onboarding of additional users and functionality) could be adjusted depending on the companys preference. Licensing and development costs could be significantly high depending on the chosen approach; adopting MEAP (mobile enterprise application platform), for example, requires a per user, per year cost, which could make mobility a hard choice. Hence this component must be carefully considered before making a choice. In order to control this, we encourage companies to consider propositions that convert the high up-front Cap - Ex to a peruser-per-month Op - Ex cost. Most of the key functionality should be implemented and targeted at the user populations most likely to adopt it; this ensures that future adoption rates are guaranteed and that the ROI can be fully realized. In order to manage costs further, companies must consider sourcing development and exploring hosted solutions. From our experience, organizations that experimented with such approaches, especially in the early days of mobile initiatives, reaped significant benefits.
mobile implementation due to adaptability levels of the channel/customers/employees to mobility. Relevant assumptions will need to be made for staggering the expected benefits, keeping in mind the variables of business growth, market growth and expected benefits for the year (i.e., all agents might not start using mobile functions in the first year).
Some benefits might end after the initial period (i.e., even though agents might enter all details for the quotes, quality assurance must still be performed, plus some amount of data entry since not all agents will go mobile). In this case, expected benefits associated with effort reduction for data entry might remain stable after an initial period.
Costs usually kick in over a period of time, as more users come on board. Such a phased approach is recommended, since the pace of the roll-out would depend on the maturity of users in the target geography. A simple break-even calculation or net present value method could be used to compute the expected payback period and assess comfort levels for investment. From the authors experience, at least two scenarios, pessimistic and realistic, must be considered in order to arrive at a meaningful analysis. Companies have often relied on pessimistic estimates to phase investments over several years and keep pace with the changing landscape.
Conclusion
Quantifying mobile ROI for insurers is an essential requirement for justifying mobility investments and benefits. Even though there is little precedent for quantified benefits and ROI, insurers can use what data exists and more importantly their own understanding of their business to realize the simple benefits that can result from doing things differently; in this case, bringing mobility to the enterprise.
The understanding that many of the benefits might not accrue in the first year of the
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Cognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process outsourcing services, dedicated to helping the worlds leading companies build stronger businesses. Headquartered in Teaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction, technology innovation, deep industry and business process expertise, and a global, collaborative workforce that embodies the future of work. With over 50 delivery centers worldwide and approximately 145,200 employees as of June 30, 2012, Cognizant is a member of the NASDAQ-100, the S&P 500, the Forbes Global 2000, and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world. Visit us online at www.cognizant.com for more information.
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