The increasing use of smartphones and tablets marks a further step away from personal interaction with brokers, says iGO4’s Tom Cooper
Q: How far is technology changing the way the insurance industry works?
A: Oh, it’s changing immensely the way people get their cover. They have greater access to information, letting them make a more informed decision on what product they want. Seventy per cent of people have access to the internet via a desktop computer, but tablets and smaller devices will become increasingly more important. People used to use their phone to search for things like sports results, but now the searches are getting what I would call more heavy duty, like getting an insurance quote. The functionality of these devices is changing at such a rate of knots that they are becoming slicker and easier for policyholders to use.
Q: Can an app or a text really replace human contact?
A: I don’t think it can do, but the way people interact continually evolves. For example, people are now much more likely to respond to a text than an email - about 70% of texts are likely to be read, whereas it is most likely that they won’t read an email. I suspect even that will change, as the growth of nuisance texts will not help.
Q: Will the use of apps spread beyond motor and travel insurance?
A: Well, motor is the most obvious area, as the rise of the internet saw the emergence of motor-driven aggregator sites. Household less so, as people want to do a bit more investigation when insuring their home and want to talk through the policy with someone. Pet insurance would certainly be easy [to develop an app for, as it tends to be based mainly on price].
Q: How will older brokers cope with the technological changes?
A: Some will probably choose not to keep up with the advances - and there is certainly still a place for the high street, telephone, the Yellow Pages and other directories. But this is very much a generational thing. I suspect over time there will be less meeting brokers in person, but there will always be a market of some size for that.
Q: Could cost be a factor for policyholders as app technology develops?
A: No, not really. Costs are coming down already for the consumer: the actual access to apps for them is actually very cheap - just a token, like £1. So, cost won’t be an inhibitor. What could be is customer lethargy - actually getting them to use the technology and getting used to the idea of using the technology.
Tom Cooper is founder of iGO4