Mobile Imaging in Insurance: Delivering Differentiation and Profit

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Released: April 2012

In today’s mobile age, virtually every industry is leveraging mobile technologies to expand self-service channels and to improve those already in place. The insurance industry is no exception. Today, customers can access their policies, file claims, and get quotes – all with the convenience of using a smartphone or tablet. However, insurers are only just beginning to capitalize on the full value that mobile solutions can deliver. There are new options for solutions that go beyond just simple transactions. It is now possible to improve top and bottom line growth, and transform both the customer experience and business processes across the entire value chain, by simply changing the way information is captured and utilized.

Advanced mobile technologies offer insurers the power and potential to truly differentiate themselves in the marketplace. Mobile imaging solutions provide a perfect example. They present an opportunity to revolutionize the way insurers do business, and to bring simplicity and synergy to currently segmented areas in insurance companies. Maximizing competitive distinction in the area of mobile technologies will move insurers into prime positions in the market. SMA’s research and insights identify major benefits. Insurers are able to:

 Drive growth through differentiation by using advanced technologies to deliver convenient and immediate self-service interactions – creating the “wow” factor for the customer.

 Increase profitability by reducing operational costs and, at the same time, gathering more accurate and complete data – unleashing the power to truly transform business processes across the value chain.

 Improve sales and retention by delivering services that are faster and easier to use, and seamlessly integrating them with streamlined business processes – revolutionizing the way customers and insurers are able to conduct business.

It is time for all insurers to embrace mobile imaging solutions. The capabilities and possibilities are rapidly expanding. Insurers that capitalize on this technology now will not only be ahead of the pack, but they will be making a wise investment and opening the door to infinite possibilities for the future.

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Mobile Imaging in Insurance: Delivering Differentiation and Profit

  1. 1. Mobile Imaging in Insurance © 2012 SMA All Rights Reserved www.strategymeetsaction.com SMA Perspective Page 1 An SMA Perspective Author: Deb Smallwood, Founder Mark Breading, Partner Published Date: April, 2012 This perspective is based on SMA’s ongoing research on mobile and ECM technologies in insurance. Mitek Systems® has purchased distribution rights. Mobile Imaging in Insurance Delivering Differentiation and Profit Featuring as an example: Mitek Systems®
  2. 2. Mobile Imaging in Insurance © 2012 SMA All Rights Reserved www.strategymeetsaction.com SMA Perspective Page 2 Table of Contents Mobile Age Promises New Possibilities 3 A Truly Mobile Age Customer Expectations for a New Insurance Experience Business Capabilities 5 Differentiation for Growth and Profit New Ways to Reduce Cost New Power for Business Processes Technology Capabilities 7 Meeting the Requirements for Flexibility and Agility Differentiation Enabled by Technology Mitek Systems® 9 Company Overview Breadth of Functionality Strategy Meets Action Commentary 11 About Strategy Meets Action 11 About This Perspective This perspective is based on SMA’s experience, research, and insights.  The mobile world is expanding at an astounding pace in all age groups and all market sectors.  Insurers have a tremendous opportunity to differentiate themselves with advanced mobile technologies like mobile imaging.  Mobile imaging can help insurers achieve profitable growth by reducing cost, improving data accuracy, and better serving their customers. Mitek Systems® has purchased the distribution rights to this research and perspective. This is not paid-for research.
  3. 3. Mobile Imaging in Insurance © 2012 SMA All Rights Reserved www.strategymeetsaction.com SMA Perspective Page 3 Mobile Age Promises New Possibilities In today’s mobile age, virtually every industry is leveraging mobile technologies to expand self-service channels and to improve those already in place. The insurance industry is no exception. Today, customers can access their policies, file claims, and get quotes – all with the convenience of using a smartphone or tablet. However, insurers are only just beginning to capitalize on the full value that mobile solutions can deliver. There are new options for solutions that go beyond just simple transactions. It is now possible to improve top and bottom line growth, and transform both the customer experience and business processes across the entire value chain, by simply changing the way information is captured and utilized. Advanced mobile technologies offer insurers the power and potential to truly differentiate themselves in the marketplace. Mobile imaging solutions provide a perfect example. They present an opportunity to revolutionize the way insurers do business, and to bring simplicity and synergy to currently segmented areas in insurance companies. Maximizing competitive distinction in the area of mobile technologies will move insurers into prime positions in the market. SMA’s research and insights identify major benefits. Insurers are able to:  Drive growth through differentiation by using advanced technologies to deliver convenient and immediate self-service interactions – creating the “wow” factor for the customer.  Increase profitability by reducing operational costs and, at the same time, gathering more accurate and complete data – unleashing the power to truly transform business processes across the value chain.  Improve sales and retention by delivering services that are faster and easier to use, and seamlessly integrating them with streamlined business processes – revolutionizing the way customers and insurers are able to conduct business. It is time for all insurers to embrace mobile imaging solutions. The capabilities and possibilities are rapidly expanding. Insurers that capitalize on this technology now will not only be ahead of the pack, but they will be making a wise investment and opening the door to infinite possibilities for the future. A Truly Mobile Age The mobile age has become a reality for all ages, all regions, and all industries. Initially, the mobile phenomena had the greatest impact on and acceptance among the Gen-Y age group, but the shift to mobility is much broader today and spans all ages. Data reported in the media shows that over 60% of people aged 18-29 own smartphones. Statistics show that the fastest growth for smartphones and tablets is in the 30-50 age group, where some 35% already own a smartphone. Sales of smartphones are expected to exceed those of PCs in 2012. Today, even grandmas are relying on smart mobile devices to stay in touch and manage the details of everyday life. Even more fascinating is the explosion in the sales numbers for tablet devices, with projections that they will eventually surpass those of smartphones. Add to that the use of smartphone and tablet mobile applications. The number and sophistication of these apps continue to surpass all expectations. There are currently over 500,000 mobile applications available in Apple’s App Store, and developers are waiting in line to place The mobile-enabled population is growing quickly. Now is the time for insurers to embrace the “wow” solutions that will attract customers and keep them coming back for more. Differentiation is a brand builder. The delivery of useful, engaging solutions and tools for customers holds the power to move an insurer beyond the status quo – helping them to retain existing customers and attract new ones. Advanced mobile technologies are making differentiation possible.
  4. 4. Mobile Imaging in Insurance © 2012 SMA All Rights Reserved www.strategymeetsaction.com SMA Perspective Page 4 their new ones. The statistics are already too vast and too meaningful to ignore. All insurers should be considering the breadth and importance of this mobile age that includes anyone with access to mobile technology. SMA’s research on mobile technology use reveals that 22% of insurers indicate that they have a mobile quoting app. Eighteen percent indicate they have a mobile app for claims and/or billing. Leading insurers are investigating how they can use mobile to achieve their specific business objectives across the full spectrum – sales, service, and support. The question for all insurers should not be, “What is insurance doing with mobile?” but rather, “What is mobile doing to the insurance industry?” The companies that are exploring the possibilities and staying on top of what is happening are the ones that will continue reap the rewards. Customer Expectations for a New Insurance Experience There are endless opportunities for the use of mobile technology in the insurance industry. Today, insurers offering mobile apps are viewed as innovative and customer- focused. With the mobile market growing so rapidly, all insurers should anticipate that most customers will soon expect their insurers to provide mobile capabilities in some form. The mobile age customer will continue to be increasingly demanding, with escalating expectations for advanced mobile applications – expectations that are shaped both inside and outside the industry. Figure 1. The Mobile Evolution in Insurance Unfortunately, according to SMA’s research, the insurance industry is running behind other industries in adopting mobile apps. Figure 1 depicts the current level of maturity for mobile offerings among insurers and includes a scale that is useful for measuring the rate at which insurers are embracing mobile technologies. Based on today’s state of maturity, a majority (60-80%) of insurers fall into the “mainstreamers” category. Source: Strategy Meets Action 2012
  5. 5. Mobile Imaging in Insurance © 2012 SMA All Rights Reserved www.strategymeetsaction.com SMA Perspective Page 5 A “master” insurer looks beyond basic mobile apps to create apps that will enhance the full user experience, throughout the customer life cycle. These advanced apps use multiple technologies and specific tools that change the way customers do business and the way insurers interact with the customer. Insurers that fall into the “movers” category are actively bridging the gap between mobile web enablement and basic mobile apps. These “movers” are working to achieve some level of differentiation beyond the mainstreamer. While it might feel comfortable for an insurer to be in a “mover” or even a “mainstreamer” position today, the reality is that the capabilities that are associated with a “mover” or a “master” today will be the very same capabilities that identify a “mainstreamer” in the not-too-distant future. Mobile apps are rapidly becoming commoditized. Insurers must embrace advanced mobile apps to stay ahead of the curve in order to distinguish themselves competitively and gain productivity advantages. Business Capabilities Mobile imaging business capabilities have the capacity to revolutionize the way insurers do business, incorporating a new ease and collaboration between currently segmented areas within insurance companies. As evidence has shown, maximizing competitive distinction in the area of mobile technologies will move insurers to prime positions in the market. SMA’s 2012 Ecosystem research shows that most insurers are actively setting strategies for profitable growth. To drive these strategies, they are exploring new ways to make it easier, faster, and more appealing for the customer to do business with them. Mobile imaging solutions do just that. To reduce operational inefficiencies and improve the profit equation, insurers want to make certain they have accurate and reliable information for decision-making at all points in the insurance processing cycle – from quotation to claim to renewal. Mobile imaging solutions take images, which are unstructured information, and turn them into accurate, usable, structured data. This eliminates time delays, manual data entry, and error-prone keystrokes. Differentiation for Growth and Profit People want to do more business with a company that makes things convenient, uncomplicated, and speedy. Using mobile imaging solutions makes it quick and easy for the customer, and helps to improve both acquisition and retention. This is an excellent example of how leveraging the right technology can indeed spur growth. Mobile imaging capabilities enable a customer to get a quote, file a claim, and/or pay a bill – all through a smartphone or tablet and a click of the camera. Mobile imaging makes it fast and painless for the user. This is differentiation! And, at the same time that it is bolstering brand image in the marketplace, it is taking a company to the next level of maturity in its ability to turn the image into immediately usable, structured data. New Ways to Reduce Cost Mobile imaging technology offers a new type of cost reduction. The banking industry has been using mobile imaging technology for many years, and has demonstrated the cost savings that can be achieved by moving from paper checking deposits with a bank teller, to imaged check deposits at ATM machines, and now to mobile check deposits from anywhere at any time. The mobile-driven business model is built around being faster, better, and cheaper. The data is right the first time. There are no transcription errors. Insurers have an opportunity to revolutionize the way they do business by putting mobile imaging solutions to work.
  6. 6. Mobile Imaging in Insurance © 2012 SMA All Rights Reserved www.strategymeetsaction.com SMA Perspective Page 6 Not only is the data captured from the primary source and turned into usable information, the original source image is also stored. Accuracy and reporting capabilities have been proven. Cost savings opportunities for insurers are enormous, as mobile image capture can simplify manual workflows and reduce paper volumes, imaging costs, keying and rekeying labor. New Power for Business Processes Mobile image technology has the potential to transform internal business processes, particularly those that support sales and service. Just as significant as the positive impact that mobile imaging technology has on the customer experience, is what it can do for streamlining data capture. The possibilities for transforming insurers’ business processes are vast. It is a catalyst for innovation. Insurers can rethink their processes with the same creativity that they apply to customer interactions. Insurers using mobile imaging think of a mobile camera as a replacement for a PC, telephone, scanner, and printer all in one – as a picture that can be used to communicate in a variety of mediums within a single transaction. Mobile imaging technology successfully bridges the gap between the physical and digital world. As insurers consider the new power in starting with the data capture portion of business processes, rather than with the transaction, it is advisable to start with the images that are available in the customers’ world. Figure 2 depicts examples of images that can be leveraged as key data capture elements for insurance transactions. Figure 2. Mobile Imaging and Insurance Business Opportunities Starting with the image, converting it to structured data, and then integrating it with the business applications affords many advantages. For example:  Driver’s license images: Saves the insurer time and avoids error in data entry. Can provide efficiencies in sales, billing, and claims applications. Source: Strategy Meets Action 2012
  7. 7. Mobile Imaging in Insurance © 2012 SMA All Rights Reserved www.strategymeetsaction.com SMA Perspective Page 7  Forms: Provides a new way to capture and extract information from forms such as insurance declaration pages, insurance cards, and vehicle registration forms. Accelerates transaction processing.  License plate images and VIN numbers: Allows insurers to verify claims, and enables accurate customer identification, quotes, and inspections.  Personal check images: Reduces the lag time associated with mailing payments and streamlines billing processes.  Auto and home inventory: Enables the capture of information on home or business property contents to create inventories, support insurance to value initiatives, and improve damage estimation. The above examples represent only a few of the images that the insurance industry is using or exploring now. The door is open for redefining the way that the business captures data. As Figure 2 demonstrates, an image of a driver’s license can simultaneously impact billing, claims, and sales departments. This technology simplifies the touch points and processes that are already in place by creating a standardized image and data capture for the work of multiple business units – paving the way for new synergies and shared efficiencies across business segments. Technology Capabilities Capitalizing on the value of mobile imaging technology capabilities can move insurers beyond modernization and optimization and on to innovation in the mobile age. But before insurers get started, the business, technology, and mobile strategies must be in synch. Mobile apps should complement core business applications. It is imperative that they work harmoniously. This requires a sound, integrated platform that will support mobile imaging applications. As shown in Figure 3, IT must insulate the business processes with security controls for data exchange and capitalize on technology advancements that facilitate an environment for integration. Figure 3. Technology Capabilities Source: Strategy Meets Action 2012
  8. 8. Mobile Imaging in Insurance © 2012 SMA All Rights Reserved www.strategymeetsaction.com SMA Perspective Page 8 Because the mobile generation expects such high levels of service from the applications they choose to use on their mobile devices, insurers cannot afford to develop these solutions without working seamlessly across the business and IT sectors. Meeting the Requirements for Flexibility and Agility In recent years, there have been major advancements in mobile and the technologies that augment and surround mobile such as cloud computing, mobile application software, and imaging solutions. These advancements are paving the way for more sophisticated and flexible capabilities. Insurers need the following key capabilities:  Accuracy and speed – easy and fast capture of data with a high degree of accuracy in extracting data from images. Skewing and dewarp extractions are a must.  Configurability and scalability – to adjust and adapt to changing insurers’ environments, both from a performance and scale perspective.  SOA platform – easy plug and play and integration into insurers’ core systems with web service-type integration.  Agnostic – operability/compatibility with any network and any mobile operating system, and support for any device.  Security – protecting all insurer and insured data. As Figure 3 depicts, sound security policies are critical to adoption of mobile imaging solutions. Advanced security must be foundational to all business process enhancements. Without it, the risk to users will be too high. A security checklist for mobile imaging solutions should include:  Strong authentication utilizing phone-key and username/passwords  Ability to encrypt data and check images  Server controls for deleting images  Tight integration with insurers’ existing credentialing systems  Secure Socket Layer (SSL) over the air  SSL for all back-end web services  Super admin capabilities to set various user levels for access and security  Ability to restrict storage of data and images on smartphones The preceding capabilities are essential for mobile imaging solution selection. Differentiation Enabled by Technology The opportunity for differentiation starts at the initial customer touch point, at the time a mobile app is offered. Once the first advanced mobile app is delivered, the tone is set. It is critical to be able to follow quickly with additional new apps once the first one is successful. That means that insurers must be able to securely and easily roll out additional apps and to use a plug-and-play approach to bringing them to market. This requires an easy linkage to the IT platform, the ability to readily integrate with core business applications, and secure data exchange. Insurers that are able to build a solid technical platform that facilitates the mobile age will find the effort most worthwhile. It’s the key to driving growth and profit through differentiation. By capitalizing on the capabilities of mobile imaging technology, insurers can move beyond modernization and optimization and on to innovation.
  9. 9. Mobile Imaging in Insurance © 2012 SMA All Rights Reserved www.strategymeetsaction.com SMA Perspective Page 9 Mitek Systems® Company Overview Headquartered in San Diego, CA, Mitek Systems® is a leader in mobile imaging solutions. Mitek Systems’ software solutions allow users to remotely complete, in a single step, transactions such as check deposits, bill payments, insurance quotations, and credit card balance transfers. With a strong patent portfolio (twelve patents approved and five pending), Mitek Systems is positioned as one of the innovators in mobile imaging software. The company currently provides its solutions to several Fortune 500 financial services companies. In addition, Mitek Systems has over one hundred fifty person-years of research and development invested in mobile imaging technology. Breadth of Functionality Mitek Systems offers a full suite of solutions that enable property and casualty insurers to deliver easy and convenient mobile services across the sales, service, and support functions. The solutions use the camera on a mobile device (smartphones and tablets) to take photos of documents, images, or personal information to eliminate data entry on small keypads, and automate tasks – creating a superior mobile user experience. The suite of insurance solutions available through Mitek Systems enables insurers to deliver easy, convenient, and fun mobile services for both consumers and agents. The solutions drive customer acquisition and retention, and operational efficiency across claims, sales, and support functions. For insurers, Mitek Systems offers four key solutions:  Mobile Photo QuotingTM – automates the insurance shopping and buying process by taking photos of driver’s licenses, insurance ID cards, and Vehicle Identification Numbers (VIN).  Mobile Photo ClaimsTM – streamlines the claims process by enabling customers and agents to simply snap photos of customers’ driver’s licenses, insurance cards, and license plates.  Mobile Photo PaymentTM – simplifies enrollment in electronic payment through checking accounts or direct deposit for a claim reimbursement transfer by taking photo of a blank check.  Mobile Photo Document Capture & SendTM – enables policyholders and agents to take a photo of any document and send it as a high quality PDF to any email address or fax number. These insurance solutions consist of the following three components:  Server based imaging and analytics software that analyzes, corrects, converts, and reads document images,  Mobile device-based (smartphones and tablets) software libraries that enhance security and optimize the user experience with the camera, and  Packaged professional services for implementation and best practices. The first insurance implementation of the Mitek Systems solution was with Progressive® Insurance, using Mitek’s Mobile Photo Quoting solution. This application uses the camera
  10. 10. Mobile Imaging in Insurance © 2012 SMA All Rights Reserved www.strategymeetsaction.com SMA Perspective Page 10 on a smartphone to automate the shopping and buying process for auto insurance. Using the Progressive mobile application that is available for download, the customer can simply enter their zip code and take a picture of their driver’s license, VIN, or existing insurance identification card. Mitek Systems’ patented mobile imaging technology automatically extracts relevant information from the documents and auto-populates the fields in Progressive’s mobile quoting application. The user is able to confirm the information and submit with the touch of the screen. Moments later, the customer receives an auto insurance quote with the option to buy.
  11. 11. Mobile Imaging in Insurance © 2012 SMA All Rights Reserved www.strategymeetsaction.com SMA Perspective Page 11 Strategy Meets Action Commentary The advent of the mobile age is presenting the insurance industry with a real opportunity to embrace advanced mobile technologies for profitable growth. There are realistic opportunities to improve business processes, significantly enhance the customer experience, and create greater operational efficiencies. Given the speed at which the demand and prevalence of mobile technology is moving across all markets, insurers must embrace advanced mobile capabilities, and the sooner, the better. Insurers need to be thinking about how to leverage this technology. A truly mobile age means that the possibilities are endless. Now is the time to be looking both inside and outside the industry for ways that solutions like mobile imaging technology can deliver differentiation. Start by investigating the applications that businesses with similar characteristics are finding of value. Look at what leaders in other financial services segments are doing and investigate the results. Check out what is working well in other industries where customer relationships and loyalty are highly important to success. Mitek Systems offers “wow” mobile app options. The technology available through Mitek Systems is resonating with insurers and taking them to the “master” level in the use of advanced mobile apps. Mitek currently has proof-of-concept projects in progress with several major insurers. Mobile imaging is a hot technology right now and it aligns well with insurance business strategies. While it’s easy to see the value of mobile imaging solutions in insurance today, it is important to expand the vision. As more and more images are extracted and stored, the data increases in value. We are only on the threshold of understanding its full significance for the industry. Insurers that want the market and their customers to know that they are embracing the mobile age, and want to differentiate themselves in the market, are likely to find that mobile imaging technology is right for them. They should definitely investigate, conduct a proof-of- concept, and consider the Mitek Systems offerings. About Strategy Meets Action Exclusively servicing the insurance industry, SMA is a new breed of strategic advisory firm offering a unique blend of research, advisory, and consulting services to insurance companies and to solution providers. By leveraging best practices from both management consulting and research advisory disciplines, SMA’s advisory service offerings are actionable, business driven, and research based – where strategy meets action. This SMA Perspective is a summary of SMA’s ongoing research on insurance leadership levers, ECM and mobile capabilities in insurance. Mitek Systems has purchased distribution rights for summary results of selected research and opinion. Additional information on SMA can be found at www.strategymeetsaction.com. SMA Founder Deb Smallwood can be reached at dsmallwood@strategymeetsaction.com or 1.603.770.9090. SMA Partner Mark Breading can be reached at 1.614.562.8310 or mbreading@strategymeetsaction.com. The insurance industry should be looking both inside and outside the industry for ways that advanced mobile solutions, like mobile imaging, can deliver differentiation and profit.

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