Smartphone Apps Take the Risk Out of Insurance

Sep 12, 2018
By: Marissa Camilli

Insurance is something we see little value in, until something goes wrong and we rely on it paying out. Even then, as premiums inevitably rise – it still leaves a bad taste in our mouths.

If ever a business needed disrupting more – it’s the insurance industry.

Complicated, Costly, Competitive

The insurance industry is a complex beast. Its highly competitive nature forces the industry to play a “bait and switch” game of competitively priced introductory offers, followed by unfathomable annual price increases. Woe betide anyone who doesn’t shop-around for the best insurance deal when their premiums are up for renewal.

An Expensive Business

Of course, the business of insurance isn’t always easy for the insurers themselves. They have to balance their clients’ risk with competitively-priced premiums which keep customers coming back year after year and deliver an acceptable profit after considerable marketing costs.

Note:  The cost of acquisition can be considerable via traditional routes to market such as TV, radio, print, paid search and comparison shopping channels. Insurance companies might have to wait several years before customer lifetime value kicks-in and an acquisition delivers a profit.

Ripe for Disruption

While the insurance industry has modernized significantly in recent years, it is still viewed as something of a traditional industry and as anyone who has worked in a traditional industry (the media, retail, travel, entertainment, etc.) will tell you, traditional industries are ripe for disruption.

However, unlike other previously digitally-disrupted industries, the insurance industry has weighed-up the risks involved (of course it has) and decided that if anyone is going to disrupt their industry, it’s going to be themselves.

Further Reading: Why Legacy Retail Brands Must Adopt a More Robust App-Based Strategy.

A Disruptive Insurance Policy

Aviva, the London-based, multi-national insurance company, is hoping to shake-up the industry from within.

The company employs around 200 people at its “Digital Garage” in London’s high-tech hub in Shoreditch, with the sole purpose of changing the way consumers view and use insurance products. Typically, this new breed of employees comes from outside of the insurance industry and includes data scientists and ex-game developers.

Innovative Apps – Solve Problems

Innovations at Aviva include apps that “reward” safe drivers with lower premiums; automated quotes that don’t require policy holders to answer questions which they are unlikely to know the answers to; and smartphone-powered dashboard cams that make it easier for policy holders to make claims.

The key to Aviva’s ongoing success in this disruptive age is positioning their most innovative business unit at the forefront of their entire business.

Speaking to journalists, Aviva’s retail and brand marketing director Tom Daniell said: “[The Garage] is actually where we run the business from. It is a tangibly different approach to what you will see in many other businesses, where the ‘garage’ is an innovation hub and it sits on the side and you tell them, ‘whatever you do don’t hurt my main business but go play with the new shiny stuff over there’, and then you cross your fingers and hope something interesting comes out. What we’ve done here is give it teeth.”

Daniell is under no illusion, the investment Aviva is making isn’t an easy option for the brand – but a vital one for the future health of the business.

Daniell said: “The idea you can remodel something that has been a very successful model for many years, but you are remodelling it because you believe it’s unsustainable on behalf of the customer, is a really difficult one.”

The Smartphone – A Natural Ally

The smartphone is a natural ally in the insurance industry’s fight to be more relevant to its clients’ needs.

Nobody knows us better than our smartphones. They know how fast we drive, how much we exercise, where we spend our leisure time, what we buy and the questions we ask the web. All of this data is, of course, incredibly useful if you’re trying to assess how much of a risk an individual poses to a potential insurance claim.

Note: Consumers will have to balance how much information they are willing to share with their insurance companies in order to land the best possible deal. This will also raise certain ethical questions. Could a truly bespoke service from the insurance industry potentially price some people out of the market?

Low Cost Acquisition

Smartphone apps are also somewhat easier to market than insurance policies – which, in a very competitive market, are often bought primarily on price.

If you can persuade a smartphone user to activate a free app – you can start collecting data to create a truly bespoke insurance offer long before the renewal date of their existing insurance policies.

A pre-loaded app campaign can dramatically reduce an insurance business’ cost-per-acquisition and deliver results over the lifetime of a device and not just for the life of a promotional campaign.

Insure Yourself Against Digital Disruption

In this age of almost certain digital disruption, not having an app-based strategy could present a significant risk for your business.

The team at Digital Turbine are experts at putting the right apps in front of the right people at the right time. Contact us today to insure your business against inevitable risk.

Marissa Camilli
By Marissa Camilli
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