Mobile Customer Engagement and the Rise of the App-Based Insurance Landscape

Traditionally, SMS-based services have been widely accepted as a customer engagement mechanism for the consumer insurance industry. But there’s nevertheless change afoot in developed markets with the advent of smartphones and the rise of the app economy. As mobile apps become ever more sophisticated, mobile customer interaction is being touted as a convenient complement to online insurance services. While Smartphone adoption is well documented, what is significant is the use of SMS based communications channels do not require Smartphones and can also deliver quite sophisticated interaction options for end consumers. As such mobile messaging represents an excellent complement to app based insurance services, particularly in markets where Smartphone penetration continues to lag, such as Latin America, Africa and other developing regions.

As with other forms of insurance industry innovation, concerns about the use of mobile technology continue to restrain adoption rates. The most important of these are questions over how secure a channel mobile really is. Online security breaches can generate high profile publicity that not only heightens consumer concerns, but also highlights to insurance companies the significant potential for reputational damage.

Despite concerns over mobile security, there’s evidence to show that consumers are gaining confidence in mobile financial services. While insurance apps and online transactions are growing in popularity, as indicated above a significant market remains for messaging-based insurance support, both among smartphone and non-smartphone owners.