How Insurers Can Leverage Social and Messaging Apps to Enhance Digital Value Declining digital ROI for customer engagement and service means carriers must holistically adopt more cost-effective channels such as social and messaging apps to achieve more for less.

cognizant reports 2

Executive SummaryWe are living in the “everything, everywhere” era where continuously evolving digital technologies are driving rapid shifts in consumer behavior and expectations. In the highly competitive general insurance market, merely riding the digital wave is not enough. Insurers must actively seek avenues for using digital media to enhance customer service and engagement.

To deliver an integrated digital experience, many insurers are investing in customer-facing online and mobile applications. However, these applications are not providing the right amount of engagement to capture consumers’ “digital moments,” leaving insurers underwhelmed with the ROI from these investments. Customers tend to spend more time on other apps such as e-mail, blogs, social networking, messaging, games, etc., meaning that social and messaging apps hold significant promise for capturing customers’ digital attention.

This white paper analyzes the current customer engagement space and recommends how insurers

can leverage social and messaging apps to build a more holistic digital strategy to deliver improved sales, service and customer engagement.

Examining Digital ROIToday’s millennials – who form the bulk of insurers’ customers and employees – are social, mobile, empowered and, importantly, persis-tently connected. Moreover, the high-value digital services which they are accustomed to receiving from retailers and travel and hospitality companies are raising their expectations of insurers.

Insurers are responding by increasing their digital investments in customer and employee self-servicing capabilities through mobile apps and online portals. Examples abound of insurers enabling customer self-service across the value chain – from quotations through claims. A few insurers are also striving to expand customer mindshare by innovating further. Esurance’s “feed a craving” functionality, for instance, lets users find anything from coffee to cupcakes.1

Number of users who used the following functions:

Reduced by

25%over last six

months.

Reduced by

5.4%over last six

months.

Average portal traffic of top

insurance customer portals…

Average unique visitors of top

insurance customer portals…

Inquiries

Renewals

Endorsements

Quoting

New Business ProcessingHigh

Low

Number of users who used the following functions:

High

Low

3/4of users don’t use

app to manage insurance.

1/4of users used app only to manage

insurance.

Number of users who used the following functions:

High

Low

3/5of agents don’t use apps for their daily

work activities.

2/5of agents use apps for their daily work

activities.

Insurance Portal Usage Among Consumers

Insurance Mobile App Usage Among Consumers

Insurance Mobile App Usage Among Agents/Field Staff

Manage Policies

Policy Information and Reminders/Alerts

Quoting

Endorsements

Quoting

Collaborations withInternal Staff

Notifications/Alerts

Commissions Management

Insurers’ Struggle to Achieve Digital Adoption

Source: Cognizant analysis based on data from FICO, Gartner and Alexa.comFigure 1

cognizant reports 3

Although insurers are continuously expanding their mobile and online capabilities, the adoption of these capabilities among consumers and agents remains low, as documented in Figure 1, previous page.

Given this scenario, insurers must introspec-tively ask themselves: Why aren’t we achieving the desired ROI from these digital initiatives? Are these investments enabling customers to serve themselves, or improving customer service and engagement levels?

Insurers also need to realize that the high engagement levels achieved by industries such as banks through mobile apps and portals are high bars that most insurers are unlikely to achieve. Consumer needs are different in insurance; the transactions are more complex, views are more detailed and servicing needs are more continuous.

Insurers thus need to think differently and take a different approach. We believe that insurers need to take a step back, look at the customer’s daily use platforms and adopt any and all viable channels beyond mobile apps and portals to achieve customer service and engagement goals.

Assessing the Spread of Millennials’ Daily Use Digital PlatformsThanks to the exponential rise of digital in most businesses, numerous platforms exist for insurers to engage consumers and employees. These include online, mobile, social, wearables, digital TVs, kiosks, sensor devices, etc. However, looking at the spread of users’ digital moments across the platforms, it is evident that social and messaging apps are the most popular, as their capabilities touch the pulse of today’s customer needs for networking, free calling and texting services, community games, etc. (see Figure 2). These social and messaging apps are also most frequently accessed through mobile devices by users.

It is thus easy to understand the huge interest by enterprises in social and messaging apps. Evidence includes: Facebook’s acquisition of WhatsApp for a whopping $19 billion; Rakuten’s $900 million acquisition of Viber; WeChat’s contribution to the doubling of its creator’s (Tencent) stock price

We believe that insurers need to take a step back, look at the customer’s daily use platforms and adopt any

and all viable channels beyond mobile apps and portals to achieve customer

service and engagement goals.

The Rising Tide of Social and Messaging Apps

Source: Cognizant analysis based on data from Magnet Forensics, statista.com and AdobeFigure 2

203%

149%

66%

37%

85%Users favor mobile apps

15%Users favor mobile Web

12hrs/day on mobile apps

2hrs/day on mobile Web

Messaging and Social Entertainment and Games

Utilities and Productivity News

4.32hrs/day

4.32hrs/day

0.14hrs/day

23% Mobile 18% Online 6% Others (TV, radio)

% of users downloading these apps

Messaging and Social

Utilities and Productivity 0.36hrs/day

Entertainment and Games

News

On mobile platforms, users prefer downloading apps and using them as compared to the mobile Web.

The time spent by users on mobile platforms has been increasing significantly.

Among mobile apps, the number of users downloading messaging and social apps is increasing…

…And users are seen spending a large amount of their time on these apps.

cognizant reports 4

• Availability of pre-built capabilities that can be leveraged with minimal customization: The vast coverage of collaborative features provided by messaging and social networking apps enables insurance stakeholders to carry out several mobile sales and servicing func-tions effectively, as depicted in Figure 3.

Insurers can leverage these apps, either in a stand-alone mode to listen and engage with their stakeholders or they can integrate them with their core systems and improve outputs and efficiencies across sales, under-writing, claims and policy servicing. Most of these apps have a gateway API through which insurers can integrate their back-end systems and technology.

• Social and messaging apps, in many ways, are less expensive to deploy and maintain than mobile websites or even apps (see Fig-ure 4, next page).

> There is no necessity for developing a new platform or any additional features; hence, platform development costs are lower. These apps are also compatible with different mobile platforms and thus there is no need

in the last year; Tencent’s investment of $50 million in messaging app Kik; and even Twitter and Facebook/Instagram both launching enhanced messaging products last year.

Both social and messaging apps, in fact, have an ever-increasing feature set that has contributed to their success. Key features include the ability to share text, audio/video messages/files, or locations; facilitation of group conversations; and the enabling of less expensive voice and video calls (both one-to-one and conference calls).

How Insurers Can Apply Social Networking and Messaging AppsThese digital platforms hold huge potential for insurers. As app providers continuously expand their services, they are increasingly advancing to becoming an “alternative distribution channel” or a “quasi-operating-system” for insurers. The high penetration level of these apps, as indicated in Figure 2, provides high immediacy and reach for insurers. Apart from their reach, these apps offer convincing business value propositions to insurers, including:

RESEARCH &INQUIRY

POLICY QUOTE

QUOTE TOPOLICY

PREMIUMPAYMENTS

POLICY BINDING

CLAIM FNOL

CLAIM NEGOTIATION

& CLOSURE

POLICY SERVICING

CUSTOMERSERVICE

CUSTOMERENGAGEMENT

Web CallCenter

MobileApp

Social &Messaging

LEGEND Sample touch point mapping Touch point mapping with social and messaging

• Audio/video/chat collaboration with agent to understand the insurance features & coverages and to identify the appropriate insurance product.

• Quick quotes through defined message codes (e.g., PS QUOTE <Car make> <Car Model>).

• Receive quote proposal through file share. • Collaboration to understand quote details, policy conditions,

coverages, policy exclusions, payment methods, etc.

• Submit a claim through audio/video/chat collaboration with CSR. • Share incident images or video real time through file transfers

and video calls. • Share claim incident location & receive service center

location/contact. • GPS/location-based collaboration.

• Conference or group-based collaboration with multiple stakeholders (claim adjustor, service provider, legal counsel, etc.) during claims adjudication & negotiation.

• Receive real time alerts/notifications like renewal reminders, etc. • Receive instant updates during exigencies.• Raise service requests (enquiries, feedback, complaints) &

provide relevant information. • Multimedia-based collaboration during servicing.

• Proactively engage on insurance-related, merriment, company-related topics.

PO

LIC

YQ

UO

TE

NE

W B

US

INE

SS

CL

AIM

SS

ER

VIC

ING

Elevating Customer Functionality Across the Lifecycle

Figure 3

to be integrated, and insurers are already col-lecting these numbers as a part of new busi-ness or servicing initiatives. Social networking, however, requires the social handle and friend acceptance from the user – which many insur-ers are already seeking for other purposes, such as giving discounts and value adds.

Shaping an Effective Digital PresenceGiven the emergence of these channels, Insurers must evaluate how to optimize their current investments in mobile apps and portals.

The key ask for insurers is to analyze the relative

for any platform-specific development approach.

> These apps are already well adopted by users and hence there is less branding cost involved.

> The platform and its features are managed by the app vendors themselves and hence maintenance costs are low.

• Social and messaging apps are much easier to set up than mobile apps. They are not plat-form-specific like mobile apps. Mobile messag-ing apps require only the user’s mobile number

Cost Comparison Across Digital Tools

Figure 4

Insurance Industry Pioneers

It has been observed that a few insurers outside of the U.S. have already adopted messaging apps and are seeing business success. Some examples are

• Jubilee Insurance, Kenya, has recently launched communications through WhatsApp.2

• China Pacific Insurance has launched a WeChat service platform for both sales and customer service functions, and allows payments through WeChat’s payment service.

3

• China Life is allowing customers to shop for both car and accident insurance on its WeChat account.4

• Beijing-based Taikang Life Insurance launched a health insurance product for nominal cover on WeChat.

5

• New China Life Insurance launched a brand-new customer loyalty program on the WeChat platform.6

• Sunshine Insurance Company in China has launched crowdfunding for insurance services called “Love Upgrading” on WeChat.

7

Almost all the insurers have a social profile and many are using it to engage with their customers to enable transactions like quick quotes, agent locators, customer servicing, etc.

Moreover, social apps have also been adopted by the banking industry. Early adopters include:

• Kotak Mahindra Bank (India) has launched Hashtag Banking where users can send commands to their bank account using hashtags on Twitter.

8

• ICICI Bank (India) also has enabled a hashtag-based kind of feature on Twitter for customers.9

Quick Take

Mobile WebsiteMobile App -

Single OSMobile App - Multiple OS

Mobile Messaging and Social

Networking Apps

Platform Costs Med Med High Low

Platform Maintenance Costs Med High High Low

Interfacing Technology Costs Med High High Med

Supporting People Costs Low Med High Med

Data Management Costs Med Med Med Med

App Branding Costs Low High High Low

cognizant reports 5

cognizant reports 6

will be those organizations that apply social and messaging apps as a part of a holistic digital strategy.

To successfully effect digital transformation, insurers need to first have a robust business case, a clear-cut digitalization strategy, a well-defined roadmap and a continuous innovation initiative. IT departments need to understand the difference between executing a digital transformation program vs. a traditional implementation, since digital is evolving at an unpredictable pace. To ensure digital sustenance, insurers must leverage a focused, managed innovation approach that emphasizes continuous discovery of new digital opportunities and inculcation where applicable.

With the digital world embracing enhancements at a rapid pace, it is up to the insurers to turn this change into opportunities. Early realizers of this will reap the greatest benefits compared to laggards.

merits of the capabilities supported by different channels across online, mobile, social and messaging, map them to stakeholder needs and craft a cost-effective integrated strategy for each stakeholder group aligned to the overall business and IT objectives of the insurer.

Figure 5 depicts a representative functional decomposition across online channels based on the costs/investment required and the complexity of the transaction.

Looking Ahead: Enabling a Holistic and Future-Proof Digital StrategySimilar to the retail and hospitality industries, insurers have recently realized the importance and untapped potential of social and messaging apps for enhancing customer experience. Thus, to capture customer mindshare, those organiza-tions that choose to ignore this trend risk being left behind by progressive organizations that are already dabbling with these apps. The winners

Functional Matrix Across Online Channels

Figure 5

MOBILE APPS OR SOCIAL APPS

ONLINE/MOBILE WEB

MESSAGING APPS

SOCIAL NETWORKING

CO

MP

LE

XIT

Y O

FT

RA

NS

AC

TIO

NS

COSTS/ INVESTMENT REQUIRED

News and updates

Proactive riskmanagement info sharingduring exigencies

Real-time info sharing with agents

Proactive riskmanagement info sharing

Customer engagement

Multimedia-based claims FNOL

Multimedia-basedrisk assessment

Life events, networks-basedup-selling , cross- selling

Business intelligence,dashboards withpersonalized featureslike drill-downs, etc.

Policy buying (e-application)

Complex financial service requests

Gamifications

Product and service info

Tools like calculators, presentation tools, etc.

Short-codes-based quotes, service requests

Commission management

LOW

LOW HIGH

Location-baseddashboards

Alerts andnotifications

Customer service

Real-time collaborationbetween stakeholders

HIGH

cognizant reports 7

Footnotes1 http://blog.esurance.com/esurance-mobile-find-shops-and-services/

2 http://www.businessdailyafrica.com/Jubilee-adopts-WhatsApp-to-communicate-with-cli-ents/-/1248928/2290590/-/w2pygl/-/index.html

3 http://www.huawei.com/en/publications/winwin-magazine/23/china-pacific-insurance-goes-digital

4 http://www.asiainsurancereview.com/News/View-NewsLetter-Article?id=28570&Type=eDaily

5 http://www.scmp.com/news/china-insider/article/1441962/wechats-latest-viral-hit-china-health-insurance

6 http://www.abnnewswire.net/press/en/78523/99_Wuxian_Ltd_(ASX:NNW)_Develops_Major_New_Channel_to_Market_with_Chinese_Insurance_Companies.html

7 http://www.ecns.cn/cns-wire/2014/04-18/110134.shtml

8 http://www.latestnews360.com/readmore/29074/digital-news/Kotak%20Bank%20debuts%20Hashtag%20Banking%20with%20its%20new%20social%20savings%20account.html

9 http://lighthouseinsights.in/icicibankpay-icici-banks-reply-to-kotaks-hashtagbanking.html/

References• “Mobile Thought Leadership – Global,” FICO, 2013.

• “The rise of mobile messaging,” Magnet Forensics, 2013. https://www.magnetforensics.com/wp-content/uploads/2014/02/MF_riseofmobile_infographic.pdf

• “Mobile Consumer Survey Results,” Adobe, 2013. http://empoweryou.ca/wp-content/uploads/2013/12/Adobe-2013-Mobile-Consumer-Survey-Result.pdf

• “Leverage the Power of Mobile Technology to Innovate Your Retail Business,” SAP, September 2011. http://fm.sap.com/data/UPLOAD/files/Leverage%20the%20Power%20of%20Mobile%20Technology%20to%20Innovate%20Your%20Retail%20Business%20Solution%20Brief.pdf

• “FICO Global Survey reveals connected consumers want information and policy alerts from insurers,” prnewswire.com, March 2014. http://www.prnewswire.com/news-releases/fico-global-survey-reveals-connected-consumers-want-information-and-policy-alerts-from-insurers-249715971.html

• “Mobile adoption rate still low among insurance customers,” insurancetech.com, March 2014. http://www.insurancetech.com/data-and-analytics/mobile-adoption-rate-still-low-among-insurance-customers/d/d-id/1315104

• “Mobile use grows 115% in 2013, propelled by messaging apps,” Flurry Analytics, January 2014. http://www.flurry.com/bid/103601/Mobile-Use-Grows-115-in-2013-Propelled-by-Messaging-Apps#

• “Most popular global mobile messenger apps as of March 2015, based on number of monthly active users,” statista.com, March 2015. http://www.statista.com/statistics/258749/most-popular-global-mobile-messenger-apps/

• “Mobile messaging apps becoming a trend,” inquirer.net, December 2013. http://technology.inquirer.net/32301/mobile-messaging-apps-becoming-a-trend-says-fb-exec

• “A comeback for native mobile apps in insurance?” insurancetech.net, May 2013. http://www.insur-ancetech.com/architecture-infrastructure/a-comeback-for-native-mobile-apps-in-ins/240154330

• “Gartner says less than 0.01 percent of customer mobile apps will be considered a financial success by their developers though 2018,” gartner.com, January 2014. http://www.gartner.com/newsroom/id/2648515

• “Internet retailers catching up with mobile messaging,” evigo.com, September 2014. http://evigo.com/13590-study-internet-retailers-catching-mobile-messaging/

• “The surprising business model of OTT2 messaging apps,” visionmobile.com, April 2014. http://www.visionmobile.com/blog/2014/04/the-surprising-business-model-of-ott2-messaging-apps/

World Headquarters

500 Frank W. Burr Blvd.Teaneck, NJ 07666 USAPhone: +1 201 801 0233Fax: +1 201 801 0243Toll Free: +1 888 937 3277Email: inquiry@cognizant.com

European Headquarters

1 Kingdom StreetPaddington CentralLondon W2 6BDPhone: +44 (0) 207 297 7600Fax: +44 (0) 207 121 0102Email: infouk@cognizant.com

India Operations Headquarters

#5/535, Old Mahabalipuram RoadOkkiyam Pettai, ThoraipakkamChennai, 600 096 IndiaPhone: +91 (0) 44 4209 6000Fax: +91 (0) 44 4209 6060Email: inquiryindia@cognizant.com

© Copyright 2016, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the express written permission from Cognizant. The information contained herein is subject to change without notice. All other trademarks mentioned herein are the property of their respective owners.

About Cognizant

Cognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process out-sourcing services, dedicated to helping the world’s 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 100 development and delivery centers worldwide and approximately 221,700 employees as of December 31, 2015, 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 or follow us on Twitter: Cognizant.

About the AuthorsAbhishek Mishra is a Senior Manager – Consulting within Cognizant Business Consulting, with specific focus on the insurance industry. He has executed several consulting engagements across process areas for insurers throughout multiple geographies. Abhishek has also pursued primary research to leverage mobility and social media enterprise-wide. He has a master’s degree in management from the Xavier Institute of Management, Bhubaneswar (XIMB) and holds certifications from AICPCU. Abhishek can be reached at Abhishek.Mishra3@cognizant.com.

Vinodh Stanley Stephen is a Consultant within Cognizant Business Consulting focused on the insurance industry. He has extensively researched digital strategies for insurance carriers, especially in developing markets. Vinodh has worked on conceptualizing several applications of emerging digital technologies in the insurance value chain. He has a master’s degree in management from the Institute for Financial Management and Research (IFMR) and a bachelor’s degree in engineering from Anna University. Vinodh also holds certifications from AICPCU and CII. He can be reached at Vinodhstanley.Stephen@cognizant.com.

Abinaya Silambaram Chandrabose is a Consultant within Cognizant Business Consulting focused on the insurance industry. She has extensive business analysis experience in the property and casualty sector. Abinaya has a master’s degree in management from Great Lakes Institute of Management (GLIM) and a bachelor’s degree in engineering from Anna University. She holds certifications from AICPCU. Abinaya can be reached at Abinaya.Chandrabose@cognizant.com.

TL Codex 1477