We’ve all seen the ads for auto insurance carrier mobile phone apps. They show happy policy holders using their smart phones to document accidents and apply for insurance. It’s a good use of mobile technology and we have no doubt that it helps reduce costs and increase policyholder satisfaction.
But these carriers, by focusing on claims and convenience, are missing the the biggest opportunities to improve auto insurance economics.
The most valuable use of mobile technology lies in using the customer’s mobile device up front, during the quote session. Because it is then that a well designed mobile app can help identify and mitigate up front premium manipulation and protect against back end claims fraud. According to industry analysts and our own work with carriers, these types of manipulations consume 15 to 20 percent of net premiums billed. So even a modest improvement in this outcome can result in huge bottom line and/or premium impacts for a carrier.
This is because mobile applications offer a several tools to document, validate and ultimately mitigate typical Property and Casualty risks. This is particularly true in the Automotive Insurance vertical. The following are four situations where a tool like our idMobileTM solution can significantly reduce both up front rate manipulation and excessive claims.
Identify pre-existing damage In a recent nationwide idMobileTM test we found that one third of all policies written had significant preexisting damage. A well designed application is able to capture well lit, end to end, high definition images that can be used by claims staff to weed out costly claims due to preexisting damage and liability.
Identify territory manipulation By both collecting the GPS coordinates and using the phone camera to capture images of recent utility or other bills, a well designed mobile application can often surface costly territory manipulations. Manipulations that in our experience average over $800 per policy per year.
Identify commercial use About three quarters of one percent of all vehicles can be identified as commercial from a visual image inspection. By systematically using mobile phone photography, a carrier can either identify these vehicles or cause the dishonest customer to abandon the quote and go elsewhere.
Identify excessive claims Empowering the customer to systematically capture well lit, end to end, all sides, high definition images of the vehicle after an accident, gives claims staff a powerful new tool to weed out excessive and fraudulent claims.
Objections to using mobile tools
We typically hear two objections to using mobile applications during the quotation and application process:
- “Customers won’t use the app when they are shopping for insurance”. We have found that in fact they will, although the younger and more mobile savvy the customer is, the higher the utilization. The key is deploying a web app during the process rather than requiring customers to download an app that is native to their device.
- “This is useful for online but not agent business.” Actually mobile apps increase agent productivity by directly gathering images and other evidence from the customer, eliminating agent administrative tasks. In fact a mobile application like ours allows the agent to pass the application to the customer’s mobile device and then once the task is completed, pass it back to the agent for submission.
Mobile underwriting and claims validation is a game changer in the Auto Insurance vertical. It’s the ultimate convenient, real time validation tool that radically improves carriers’ chances to deter certain types of fraud and misrepresentation. We’re VeracityID and we can show you how.