Old Insurance, New Technology

Last April, Nationwide—a company started in 1925 to provide auto insurance to Ohio farmers—became the first insurance company ever to launch an application for the iPhone. Its advantage didn’t last long, however—State Farm launched a similar iPhone app less than two months later.

“Nobody was even talking about [an iPhone app] a couple of years ago, but now you can’t live without it,” says Srini Koushik, Nationwide’s CTO. “Every insurance company has got to have something on the iPhone.”

Nationwide’s app, called Nationwide Mobile, allows its customers to start a claim immediately after an accident, while they’re still at the scene. They can take and store pictures and other details, find an insurance agent, and call a tow truck or emergency services. If light is needed, Nationwide Mobile turns the iPhone into a flashlight. Several of the app’s features are also available to people who are not Nationwide customers.

Koushik said he didn’t expect the app to be as popular as it’s been: In the first six weeks, with no marketing from Nationwide, it was downloaded around 30,000 times. It’s had about 45,000 more since.

But mobile software can also place heavy demands on a company’s IT staff, especially if they’re not used to managing it. How widely an application will be used once it becomes public is hard to predict, and the infrastructure required to support mobile software is different from what’s needed to support, say, a mainframe database that nobody outside the company will see.

iPhone apps are also trendy—they can spread or be dumped in favor of the next hot app, all within a matter of days. Nationwide wanted to move fast with Nationwide Mobile—once the marketing department had spotted the opportunity, the app was posted in Apple’s iTunes store within 60 days.

That would have made a tight schedule for the IT staff, though, and Nationwide managers didn’t want to guess too much about how the market for mobile applications will develop. So the insurer partnered to develop the iPhone app with a company that Koushik declines to name. The partnership allowed Nationwide’s staff to focus on integrating insurance claims that are filed over iPhones into Nationwide’s core IT systems, he said, and also on understanding the iPhone’s software development kit.

The staff won’t go much farther, though, until winners in the market emerge.

“Will Apple stay with AT&T? Will they be limited in how far they can reach?” he asks. “BlackBerry is there, and we’re also seeing Windows Mobile coming in. I wanted to wait to see how many devices there are going to be.”

A former Distinguished Engineer at IBM, Koushik has spent years trying to push new Web-based technologies. One of the top challenges companies will face, he believes, is training IT staffs for this new world.

That’s because devices like the iPhone not only change how software is sold, delivered and used—they also change the nature of IT jobs. IT workers are no longer master craftsmen who build every service a company offers—they are people who tend to assemble services built by others, and they need to understand how the business side of the company works.

And while the Internet has made technology easier to use, it’s also made more work for IT because it adds new layers of complexity—distributed networks with multiple servers, databases and so on. “We’re treading water, all of us, but we’re not winning,” Koushik says.

Still, Nationwide is planning more mobile applications. The company is looking at other markets where mobile software could be useful while continuing to add more features to Nationwide Mobile.