As 2017 comes to a close, I find myself reflecting on the past year and all that has taken place in our industry. Did we meet our goals? Did we help you meet your goals? I hope the answer to both of these questions is, “Yes!” While there have been some headwinds in the insurance market this year, we have also seen some really amazing forward movement and are excited about what 2018 has in store.
What follows is a recap of the trends, changes and key insights we’ve shared on our LexisNexis Risk Solutions Insurance Insights Blog during 2017.
The auto manufacturer is playing a bigger role in insurance
Over the past year, auto manufacturers have played an increasing role in UBI (Usage-Based Insurance) adoption. They are getting in the game and realizing the value they can bring to the insurance industry. There is a notable shift away from focusing on the devices and a recognition that UBI is really about the data, no matter where it comes from. Auto manufacturers are coming to understand that it’s important that the data be aggregated and normalized, to provide the most value for insurance and for new vehicle-related services. Clearly, as the auto market shifts, and the autonomous car becomes a reality, auto manufacturers and insurers must connect with the right partners and leverage the right platforms to make the most of their connected car data so they can gain a competitive edge.
Commercial insurance underwriting is becoming more automated
With the improved economy, we are seeing small businesses expand and grow. In response, commercial underwriting is shifting to become more automated in order to meet the needs of these small business owners. Now more than ever before, commercial carriers can automate their loss runs, implement predictive models and apply driver behavior insights to improve their underwriting process.
Not all Home perils are created equal
Our LexisNexis Home Trends Report―2017 shares how all perils are not created equal, enabling property insurers to better understand the risk associated with a given location. For example, in 2016, Catastrophe losses increased five percentage points from 2015 levels. This increase was mostly driven by Wind losses and Hail losses. With the events of 2017, such as Hurricane Irma and Harvey and the California wildfires, the 2018 Home Trends Report promises to be insightful.
Big Data is changing the game in life insurance
Big Data analytics can unlock opportunities within the life insurance underwriting process. It can help carriers improve the customer experience, work smarter (not harder) and attract new business. In fact, one of our customers won an award for doing just that! SBLI won the 2017 Celent Model Insurer Award in the “Data Mastery and Analytics” category for the following accomplishments:
- Reducing their average processing time from 25 days to 24 hours
- Eliminating the need to draw fluids and conduct exams
- Improving policy pricing
These data analytics-driven achievements signal the game is changing in life insurance. Are you ready to play?
Collaboration is needed across the insurance ecosystem
We know that insurance marketers are distinctly different from their underwriting/product management colleagues. In fact, we commissioned a study this year to explore the relationship between these two teams, and how it impacts effectiveness. The study unearthed enlightening information with respect to the degree of collaboration and interconnectivity between insurance marketers and their underwriting/product management counterparts―pointing to significant disconnects between the two groups. For example, only four in ten teams report that they build their strategies together. In contrast, 94% of respondents acknowledged that working more collaboratively was either “extremely important” or “important.” This suggests a willingness to embrace closer working relationships to achieve business goals. These teams should set a 2018 goal of more collaboration. Imagine what they could accomplish!
It’s important to know your insurance customer
As I said earlier this year, every consumer touchpoint is a test of your knowledge and insight. At every intersection, insurers should ask themselves if there are any new data assets they should acquire going forward. Think about the influx of data occurring now. With the explosion of the IoT (Internet of Things), insurers must be ready to leverage every bit of data and every new advancement across the insurance continuum in a way that will help them maintain a competitive advantage. And it’s not just at the point of quote and underwriting that carriers should be utilizing this data. I challenge you to look closely at implementing an Active Risk Management strategy in 2018. Knowing what’s happening with your insured post-underwriting is key to sustaining a long and mutually beneficial customer relationship.
Are you considering Touchless auto insurance claims yet?
Consumers’ expectations are shifting. They are looking for the same easy digital experiences when it comes to their auto insurance as they have come to rely on elsewhere in their lives. This includes the way their claims are processed. In our conversations with 24 auto insurance executives regarding their thoughts on automated claims handling (meaning every aspect is handled without human intervention―or the “Touchless” claim), we found that 83% are using a Fast Track approach while only 38% are using a Virtual approach―the last step on the automation continuum before Touchless. Touchless claims can potentially lower cycle times from more than two weeks to only two days. To help you understand the value this approach could bring to your business, we’ve provided five reasons you should consider Touchless claims―including benefiting from automated police report data.
What an exciting year it’s been, with advancements across all aspects of insurance. I clearly see a shift in the market toward executing today with tomorrow in mind. Imagine what changes will come to fruition in 2018! Wishing you a wonderful holiday season and a very happy new year.