A recent report by Juergen Weiss, based on the Gartner 2013 Global survey, has predicted that by 2015 at least 40 per cent of the currently existing insurance-related, customer-facing mobile applications will be abandoned due to lack of demand.
The reason for this, the report said, is due to the fact that insurers have not designed their applications in a way that makes consumers want to use them and secondly, that consumers are simply not aware when new software applications are available.
The report therefore warned insurers to review their mobile strategies, in order to gain customers' confidence.
However, developing customer-facing mobile applications remains the third most important technology priority for insurers.
Head of African Operations for SSP, Rhys Collins, a major online firm in South Africa, said: "In Africa this would be second or first priority. There is a definite correlation between the growing download of apps in Europe with wider smartphone adoption.
"The percentage of users using a cellphone now far outweighs those using the internet. It is predicted that by 2017, 79 per cent of users will have adopted smartphones as opposed to just 49 per cent in 2013."
Users want to interact with service providers via their mobile device wherever possible. This has been driven by the wide adoption of social media, Collins added.
He said this raises three key issues for insurers namely: how insurance customers embrace mobile insurance (the demand view); what insurers should expect from mobile applications (the supply view) and finally, what are the best practices for a better mobile insurance experience.
According to the report, there are numerous reasons for the lack of mobile adoption by insurance customers. Collins asserts there are very few opportunities for interaction between customers and insurers.
He said the potential for interaction would continue to exist, but that to engage customers with these new interaction points, insurers need to overcome preferences like phoning a contact centre.
He explained that since the primary reason consumers select an insurance policy is price, if apps do not create or highlight any monetary incentive or benefit for customers there will be limited appeal.
Weiss recommends insurers avoid investing in the design of mobile apps without first having a detailed value analysis. Only then should they develop a holistic app strategy that allows customers to seamlessly use the app, one that is integrated into the entire insurance value chain.
"While the absolute number of mobile users in Africa looking to interact with service providers is far less than Europe, the opportunity still exists in certain market segments for one or two insurers to steal an advantage," Collins said. He insisted the insurance industry in Africa has not identified a 'killer app' that will dramatically increase customer adoption.