Mobile apps to change the way insurers and brokers do business

"The use of mobile apps should not be seen as a threat or challenge to the insurance and broker model but rather an opportunity to complement and simplify the way of doing business. Customers are increasingly looking for convenient ways to engage and transact with service providers, and mobile apps are actively accommodating that need. It is therefore imperative for insurers and brokers to adjust their business models to accommodate the use of mobile apps in order to grow and remain relevant to their customers,” adds Boccia.

Mobile apps can enable service providers to have direct engagement with clients, improve and introduce more products and services conveniently. "For example, if you are an insurer that provides travel insurance you can potentially use location-based services in an app to determine whether your client has landed in a neighbouring country and consequently offer them cover at a click of a button,” says Boccia.

He says the appetite for mobile apps in the insurance industry has improved even over the last 12 months, with the result that the industry is increasingly seeing developers approaching insurers with ideas that have been custom made for their respective businesses.

Boccia says that while mobile apps developed for direct insurers and traditional brokers may differ due to conflicting business models, the key differentiator and success of an app lies in innovation and niche service elements that add value and appeal to customers.

Theoretically, direct insurers have a slight advantage and often experience increased growth with the use of mobile apps, primarily because their pricing model allows them to gain more volume and price products effectively compared to brokers who can only provide services to their existing client base.

Consequently, a number of brokers in South Africa have started working closely with developers to identify and create apps that allow them to differentiate their services. "These apps enable brokers to engage with the insured around policy elements, as well as up-sell and cross-sell different products into a policy,” Boccia adds.

Boccia emphasises that the service element is very important when developing mobile apps for policy holders. Most mobile apps that are currently available allow customers to access their policies at any time, potentially update data, and even add on services.

He says many insurers and brokers are still providing an internet-based service to their clients by allowing them to log onto a website, check and update their cover, which is often referred to as a pull service. "On the other hand, mobile apps provide a push service that enables clients a seamless connection to services, without having to continually log on to a website. This provides the end user with a frictionless experience and that is what customers are expecting,” says Boccia.

He continues "Mobile apps are changing the face of the insurance industry and it is in the interest of brokers to keep abreast with such developments. Furthermore, with the broker model severely under pressure, we are likely to see a lot of consolidation in the industry. Smaller brokers that simply cannot comply with increased regulation by the Financial Services Board (FSB) and the continual change in the industry are going to be acquired by larger brokerages. Generally, it is the established brokers that are best positioned to understand changing customer needs and continuously update their business models accordingly.”