By conducting a precision gap analysis and applying frameworks that emphasize user needs and behaviors, carriers can deploy mobile applications that delivery healthy monetary returns and competitive advantage.

1. • Cognizant 20-20 Insights
Quantifying ROI from
Insurance Mobility Initiatives
By conducting a precision gap analysis and applying frameworks
that emphasize user needs and behaviors, carriers can deploy
mobile applications that deliver healthy monetary returns and
competitive advantage.
Executive Summary
since 2004. However, the devices and capabilities
Let’s face it; as an industry analyst recently that are available today have vastly improved,
said to a conference audience, “Mobility is here given the technology and connectivity now
for the rest of your career.” For sure, mobility available. On the heels of such advancements,
has a strong business case in the insurance insurers’ current mobility enablement initiatives
industry (life and general), where it can help cut across the entire insurance value chain, from
to improve overall productivity, contributing sales to claims, benefiting different stakeholder
to both increased revenues and reduced costs. groups and leveraging various platforms and
Quantifying the ROI of mobile initiatives, while devices. But when compared with other industries,
perhaps challenging in many cases, is certainly such as banking or retail, insurers have traditionally
possible and can help companies avoid the followed more than led. This is due, at least in
inertia of deploying mobile solutions. part, to a lack of understanding of how mobility
This white paper looks at the mobility initiatives can best be used within the business and how it
insurers should prioritize, as well as how to can generate a positive ROI.
perform a gap analysis and then build a strategy When looking at what insurers have accomplished
to bridge those gaps. Furthermore, it explores with mobility over the past five years, the
various frameworks for evaluating the costs trends are clear:
and benefits of such endeavors to facilitate
decisions on deploying mobility solutions. • Mobile technologies are still ”cutting - edge/
emerging” vs. ”operational” for insurance
Based on the authors’ experiences, insurers
companies.
can expect to achieve an ROI of between 3%
and 10% purely from mobility initiatives. • Most initiatives have been very basic in nature,
such as a simple mobile site or mobile app
Insurance Mobility Initiatives
(i.e., an insurance calculator).
Insurance companies are surely no strangers
to mobility initiatives. In fact, they have been • The focus has been on creating a mobile
presence vs. leveraging mobility as a viable
enabling their field sales force with mobile devices
revenue -generating channel.
cognizant 20-20 insights | november 2012

2. The Dilemma: Whether to Mobilize initiative. These questions can help answer
whether such an investment is being applied
In conversations with numerous insurance CXOs,
toward a fad or a proposition that will be useful
several questions invariably arise:
to the business, if not even a competitive
• We hear a lot of buzz around mobility, but
“ advantage of sorts.
is this just another bubble?”
Where Do You Stand?
• Why
” should my company undertake a
Making the decision to go mobile is an important
mobile initiative?”
step. The next step is understanding how to
• What will the true benefits of mobility be?”
“ bridge the gap between where you are today
• How much investment would a mobile
“ and where you need to be, as well as clearly
initiative require?” understanding where the market is heading.
Our mobility maturity framework (depicted in
• How do we accurately quantify the return
”
Figure 1) is useful to any organization at any
on such an investment, considering that
stage of its mobility journey to take stock of
there aren’t many precedents?”
its progress relative to the competition
For sure, these questions are valid, since there or general market.
is a very real investment required by a mobility
Mobility Maturity Framework
MATURITY/CAPABILITY
Laggards Starters Regulars Leaders
(PARAMETERS)
Roles enabled for mobility
Customer
functionality availability GAPS
Agent
functionality availability
Products range
Claims
Ease of use of application GAPS
functionality
Mobile initiative/brand
Mobile 2.0 ready CURRENT STATE TO - BE STATE
(OR STAGE OF TOP COMPETITOR)
Figure 1
This framework can be modified for different based on either where the insurer wants to be
capability parameters that can then be used or the level reached by another insurer that
to assess the existing state of an insurer’s is considered a leader in mobility adoption.
mobile maturity. The parameters should be
• he gaps that need to be bridged to reach
T
defined based on the specific capabilities being the to-be state.
considered for mobile enablement.
Bridging the Gap: Business and
The framework provides a clear understanding Technology Roadmap
of the following:
To bridge the gap, it is imperative to design a
• he
T current state of an insurer’s mobility roadmap that ensures a seamless deployment of
enablement and a depiction of where the the mobility solutions. The strategy and steps for
company wishes to be. The “to -be” state can be bridging this gap are depicted in Figure 2.
cognizant 20-20 insights 2

3. Business and Technology Roadmap
Create business Deploy in waves so
Choose the tech-
roadmap by users have ample
nology approach
understanding Analyze time to become
Focus on the by combining
business func- the benefits, familiar with
user each user type
tionality by user costs, ROI new capabilities,
with its function-
types by mobile thereby maximiz-
ality needs
technologies ing adoption
Figure 2
Focus on the User
Carriers, in both the life and general insurance easily developed. These use cases can then
industries, are not paying enough attention to act as inputs for the technical team, which can
the most obvious question of, ”Who is the target decide the best technology to adopt.
user?” We believe this is the primary question
Create the Business Roadmap
to answer before addressing any other concern.
The business roadmap combines the user types
A user- centric approach to mobility aligns
with their functionality requirements. It should
possible areas of focus with different user
also provide a view of how to time deployment
populations. The user - centric approach offers
for specific user groups, which can be addressed
three benefits:
in the form of implementation “waves.”
1. brings focus to the mobile strategy, as the
It
insurer can focus on the key users who will Figure 3 provides a sample view of functionality
benefit from mobility. by user category and the different waves of mobile
implementation enabling this functionality. It is
2. helps identify the key focus areas and pain
It imperative for insurers to identify the right set
points for each type of user. of functionality that they want for each user
3. y segmenting users and focus areas, use
B group, since this will determine the technology
cases for required functionality can be more approach, effort and costs.
A User -Centric Approach
FOCUS ON UTILITY, FOCUS ON DISCOVERY
PRODUCTIVITY AND AND INFORMATION
EXPERIENCE Driving self-service by furnishing:
Functionality-intensive apps for: Agents Customers
• Product information
• Illustration and quotes • Account information
• Sales support • Company and agent information
• Client information • Calculators
• Compensation campaigns
Employees
FOCUS ON EXPERIENCE
AND PRODUCTIVITY
• “ unday night/Monday
S
morning” experience
• eamless integration
S
with back-end systems
• Lower asset
management costs
• Market intelligence
Figure 3
cognizant 20-20 insights 3

4. Implementation Waves
WAVE 1 WAVE 2 WAVE 3
• Product information and brochures
• Information gathering
AGENT • Need analysis and illustrations
SERVICES • Quotation
• Application submission
• Lead and prospect management
• Training: news and updates, info snippets
• Interactive training (including videos)
• Branding and campaign management
AGENT
• Commissions
TOOLS
• Notifications
• Customer management: app status, new business reports
• Customer management: reminders, policy inquiry, claims
• Self service
• Product information and brochures (interactive)
• Agent/office locator
CUSTOMER
• Branding, games / educational
SERVICE
• Financial calculators
• Quick quote
• Notifications- reminders
• Underwriting approval
• Agent business level
INTERNAL
• Application status
USERS
• Notifications-reminders
• Business dashboard
Figure 4
Choose the Technology Approach Microsoft is also making a strong statement
with Windows 7 and 8 devices, which we
Choosing the technology approach can be
believe will be a force to consider in 2013.
challenging for senior management, as all the
hype in the industry around apps and Web sites Here, the segmentation of users would assist
makes it is easy to adopt a strategy that might in deciding the target platform. The rule of
not be sustainable in the fast-changing mobile thumb is that, if it is a consumer-facing app,
landscape. Several questions need to be addressed the strategy adopted should support all
before arriving at the best possible approach: current and future platforms. However,
if the devices are under the control of the
• App or Web site: The choice between app or
company (i.e., company-issued tablets), then
Web site is clearly one of end-user experience
specific platforms can be targeted. From our
vs. cost of maintenance. While HTML5 Web
experience, most insurance companies have
sites are certainly improving, the architecture
adopted the BYOD (bring your own device)
of a Web site today makes it challenging
approach, especially for agents, which reduces
to replicate the experience of a native app.
asset management costs but also means that
However, HTML5 Web sites are clearly
maximum coverage needs to be provided,
the easiest to maintain, since the target
and the platform should be market-driven
platform is no longer important. From our
vs. company-driven.
experience, it is typical to use different
approaches for different users, with the • arget user group: The last decision that
T
ultimate goal being user satisfaction and, needs to be made is the order in which user
hence, higher adoption rates. groups are targeted.
• arget platform: Many customers’ first choice
T Once these decisions are made, the choice
of platform is iOS (both iPhone and iPad). of technology approach becomes fairly
However, Android is a strong contender, straightforward. Since mobility has been driven
considering its increased adoption, its by consumers, who are accustomed to easy-
ongoing evolution and the number of to-use interfaces, fast response and stable
device makers supporting it and its growth platforms, it is very important that the technology
in developing markets in China and India. approach delivers on these expectations while
cognizant 20-20 insights 4

5. optimizing the costs of maintaining the technology base (including multiple user groups) while
infrastructure. providing relevant priorities. In addition to the
To achieve this with currently available technology, traditional strategy of choosing one dominant
economy of scale becomes important. The winner platform, three other approaches should be
will be the technology that can cover the broadest considered (see Figure 5).
Approach to Mobile Technology Platform
OPTION 1 OPTION 2 OPTION 3
Native mobile apps for dominant platform,
Set up MEAP platform for the region, as a whole HTML5 and hybrid apps
mobile Web for the rest of the platforms
Target dominant platform with native app. Mobile middleware allows one code base to be Lower cost than native and MEAP.
mantained, while deploying to multiple platforms.
- ddresses needs of primary audience
A Emerging technology with maximum
with the best user experience. Provide adapters/connectors to integrate to device coverage among smartphones.
back-end EIS.
- everages HTML5/mobile Web
L Hybrid platforms and pure HTML5 offer
for all other platforms. Multiple options for development applications flexibility for development.
(HTML5/native/hybrid/mobile Web/desktop).
- llows broadest reach to support users
A Open source avoids vendor lock-in option
PROS
of nondominant platforms. Standard provisions for implementation compo- for integration with native libraries and
nents, including security. HTML5 code base.
Multilanguage and multidevice support (includ- Provides for caching of data using built-in
ing feature phones). 5Qlite engine.
SLAs offer future-proofing benefits. HTML5 tags and device access APIs now allow
tapping into hardware functionality, and hybrid
Flexibility for choice of applications and devices
allows deployment as native on app stores.
for deployment.
Higher development and management High licensing and/or maintenance costs Developing technology, early-stage.
costs over time. (competition putting downward pressure on
Not suited for sensitive and secure
these costs).
Constant catching up with the market. application development.
CONS
Possible vendor lock-in (some MEAP vendors
Worse user experience for HTML5/mobile Experience of a true native app lost; not as fast.
allow easier switching).
Web user, including limited offline capabili-
Limited device coverage (doesn’t extend to feature
ties.
phones), which could negatively impact some
target markets.
Figure 5
Understanding Mobility ROI
“How will the mobile initiative benefit the Benefits from mobile initiatives: Quantifying
company?” “How do we quantify the return on benefits from mobile initiatives must start with
such an investment, considering that there aren’t the business functionality that the insurer has
many precedents?” Insurers often ask such defined in its mobile business roadmap. The
questions when planning their mobile initiatives. basic idea is to quantify the benefits arising from
And the answers have not been forthcoming. implementing this functionality. For quantifying
One mobility pioneer has stated it is not even benefits, a step-wise approach should be utilized
looking at quantifying ROI at this stage. for best results (see Figure 6).
There are two parts to the mobility ROI process:
benefits and costs.
Step-Wise Approach to ROI from Mobility Initiatives
Step 1 Step 2 Step 3 Step 4 Step 5
List Functionality Identify Quantitative Identify Contributing Big Picture Benefits Parameterization
and Benefits Benefits Qualitative Benefits Of Benefits
Key step: every quantita-
List all the functionality From this list of benefits, For each quantitative ben- Consolidate the quantita- tive benefit
that is being planned as identify quantitative ben- efit, identify the qualitative tive benefits must have a formula to
part of the roadmap. efits (i.e., reduce data entry benefits to see the big picture compute how the benefit
effort, increase number of that contribute to it or the main benefits that is achieved.
List benefits that can
customer visits). and arrange into will exist for any insurer,
be gained from implement- Each parameter in that
a tree structure. (i.e., increase revenue,
ing the above functionality At this stage, do quantitative formula
reduce cost).
on mobile (i.e., benefit not look at the big picture Connect the functionality should ideally be backed
levers). -- focus on the immediate to the benefits to draw a This is what the insurer by actual studies con-
benefits. line of “benefit” for each is working toward. ducted by the insurer or be
type of “benefit” function- based on some empirical
ality planned. precedent,
to ensure credibility.
Figure 6
cognizant 20-20 insights 5

6. Benefits Framework
Benefits Benefit Levers Functionality
Quantitative Benefits Levers Qualitative Benefits Levers
Increased customer facing time 1. Lead management
Increase customer
Agent Services
visits (improved Gain Intelligence from lost deals 2. Product info and brochures
scheduling
Information at finger tips to agent 3. Information gathering
and planning)
Increase agent ............. 4. Application and submission
productivity
5. ………………
Increase Increase prospect ............. 6. ………………
Revenue conversion by
Reduced turnaround time
agents
Faster quoting capability 1. ………………
Agent Services
Reduce ............. 2. ………………
3. ………………
Faster response to agent queries 4. ………………
Reduce
............. 5. ………………
.............
Reduce
operations 1. ………………
Customer Services
cost
Higher customer satisfaction 2. ………………
Reduce cost of...
............. 3. ………………
Reduce Costs ............. 4. ………………
5. ………………
Keeping the customer engaged 6. ………………
Reduce cost of...
Reduce cost Increase customer loyalty
of claims Easy access of info to customer 1. FNOL for customer and status
Adjustor
2. Adjustor notification
Reduction Faster claims processing and response 3. Data of risk and loss details
in claims
Easy access of info to customer 4. rocessing on field data
P
expenses by...
Enhance efficiency of claims processing and sending to back office
Figure 7
The benefits framework in Figure 7 provides a the impact of the investment.
sample view of quantitative analysis that can Costs for mobile initiatives: We have developed a
be performed for an insurer based on the step- framework to analyze the costs of implementing
wise approach. It can be expanded for additional a mobility solution. Such a framework consists of
benefits that align with the insurer’s value chain. three primary components: Licensing, development
For any insurer looking to create a business case and hardware (see Figure 8).
for mobility, this framework can help maximize
Cost-Analysis Framework
Cap - Ex
Licenses
Op - Ex
One - time
(Cap - Ex)
Cost Development
Maintenance
(Op - Ex)
On - premise
Hardware
Hosted
Figure 8
cognizant 20-20 insights 6

7. From our observations, the bulk of the costs mobile implementation due to adaptability
would be incurred in the first year (license costs, levels of the channel/customers/employees
development of key functionality), while ongoing to mobility. Relevant assumptions will need
maintenance costs (based on onboarding of to be made for staggering the expected
additional users and functionality) could be benefits, keeping in mind the variables of
adjusted depending on the company’s preference. business growth, market growth and expected
Licensing and development costs could be benefits for the year (i.e., all agents might not
significantly high depending on the chosen start using mobile functions in the first year).
approach; adopting MEAP (mobile enterprise • Some
benefits might end after the initial
application platform), for example, requires a period (i.e., even though agents might enter
”per user, per year” cost, which could make all details for the quotes, quality assurance
mobility a hard choice. Hence this component must still be performed, plus some amount of
must be carefully considered before making a data entry since not all agents will go mobile).
choice. In order to control this, we encourage In this case, expected benefits associated with
companies to consider propositions that effort reduction for data entry might remain
convert the high up-front Cap - Ex to a per- stable after an initial period.
user-per-month Op - Ex cost.
Costs usually kick in over a period of time, as
Most of the key functionality should be imple- more users come on board. Such a phased
mented and targeted at the user populations approach is recommended, since the pace of
most likely to adopt it; this ensures that future the roll-out would depend on the maturity of
adoption rates are guaranteed and that the users in the target geography.
ROI can be fully realized. In order to manage
A simple break-even calculation or net present
costs further, companies must consider
value method could be used to compute the
sourcing development and exploring hosted
expected payback period and assess comfort
solutions. From our experience, organizations
levels for investment. From the authors’
that experimented with such approaches,
experience, at least two scenarios, pessimistic
especially in the early days of mobile initiatives,
and realistic, must be considered in order to
reaped significant benefits.
arrive at a meaningful analysis. Companies
The Cost-Benefit Analysis: have often relied on pessimistic estimates
Key Considerations to phase investments over several years and
keep pace with the changing landscape.
Analyzing mobility implementations is a challen-
ging exercise but one that can be very Conclusion
useful for senior management to consider.
Quantifying mobile ROI for insurers is an essential
Using the benefits and cost frameworks provided
requirement for justifying mobility investments
above, insurers can ascertain expected costs
and benefits. Even though there is little precedent
and benefits of implementation and then use any
for quantified benefits and ROI, insurers can use
of the conventional methods for conducting the
what data exists and — more importantly — their
cost-benefit analysis. Key considerations during
own understanding of their business to realize
this exercise include:
the simple benefits that can result from doing
• The understanding that many of the benefits
things differently; in this case, bringing mobility
might not accrue in the first year of the to the enterprise.
cognizant 20-20 insights 7

8. About the Authors
Partha Panda is a Principal Consultant with Cognizant’s Insurance Business Unit. He has 13 years of experience
in insurance and risk management and has held line responsibilities in underwriting, claims, customer services,
operations and other aspects of direct insurance operations. Partha has program management and consulting
experience, with a focus on providing IT enablement and transformation, working with insurance clients globally,
across the value chain. Partha has been published in insurance journals and has been a guest speaker on insurance
topics at conferences. He can be reached at Partha.Panda@cognizant.com.
Vinod Venkatasubramanian leads Cognizant’s Mobility Solution Practice for Asia - P acific, advising and helping
customers with their mobile strategies. Following a six-year stay in the U.S., he gained experience in the Asia-Pacific
region through stints in China, Hong Kong and Singapore over the last five years. During this period, he helped
numerous clients with multichannel commerce and marketing strategies. Vinod has an engineering degree and
an MBA from HKUST-School of Management, a premier business school focusing on Asia.
He can be reached at Vinodrv@cognizant.com.
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 50 delivery centers worldwide and approximately 145,200 employees as of June 30, 2012, Cognizant is a
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