The Wall Street Journal today reports on the shrinking size of the global digital camera market as the number of photos being snapped with smartphones rises exponentially.

Research cited by the WSJ via IDC suggests the global digital camera market may shrink to as little as 102 million units this year, compared with a peak of about 144 million in 2010, even as the global smartphone market has skyrocketed.

Meanwhile, some say that smartphone pictures taken by policyholders of their homes and vehicles are going to play an increasing role in the relationship between insurers and their customers.

An article in the latest edition of Visualize, a quarterly magazine by Verisk Insurance Solutions – Underwriting, makes just that point.

John Cantwell, vice president, marketing and business development, at Verisk, explains that huge volumes of data support the insurance industry, but only a tiny fraction of data records have any picture or image associated with the information.

The bottom line is that pictures contain valuable information and could be the next big insurance innovation if combined with mobile apps, Cantwell says.

While mobile apps developed to-date by insurers have offered functional capabilities, such as the ability to pay a bill or report a claim, or provided consumers with an optional sales channel in the form of a quoting app, Cantwell believes this is about to change.

For example, he suggests that the smartphone could offer an alternative to property insurance inspections:

Property inspections cost insurers about $100 million annually. You need to assess new methods to get the same information for less. Aerial imagery will soon be a viable alternative to exterior inspections, but if you need an internal inspection to complement an aerial image, how can you accomplish that without sending someone to the property? With smartphones.”

Verisk is currently developing mobile inspection applications designed to help insurance carriers connect with their customers and attract new customers. Such an innovation could also enable insurers to rate more accurately and help control fraud, Cantwell says.

We should mention that the easy-to-use I.I.I. home inventory app, Know Your Stuff – Home Inventory, has a feature that allows you to upload a photo of your property and possessions.

Other mobile apps harnessing pictures and insurance are sure to follow.