Better use of the existing data for insurance and risk – mostly residing within silos, inside and outside of the industry, and within individual providers – is going to be one of the big themes of this year.
The ability to innovate and personalise through data, through consumer insight and identity data, are going to be key to customer satisfaction and getting away from the element of mistrust and the issue of a commoditised and price-driven insurance market in the UK.
Fraud still rising despite better industry collaboration
With more than £775 million lost in 2017 to fraudulent motor insurance claims, one of the insurance industry’s highest priorities is protection from fraud through innovative technologies.
That’s according to the ABI data showing fraud is still on the rise. More sophisticated complex fraud by organised fraud teams in particular is rising, such as this example of a £1.2 million scheme of 16 gang members, and this is despite ongoing efforts with data matching across platforms and better claims forensics. So the issue of insurance fraud is going to be continuous in the different forms that it presents itself.
Which insurance technologies will attract the most investment in 2019? Which parts of the insurance operation are going to become the most disrupted within the next two to three years? How can we best tackle the drive to improve the customer experience in the industry?
Driven by digitisation, there is a widening gap between organisations that are maintaining high levels of satisfaction or which are improving, and those that are rated below their sector average. The UK Customer Satisfaction Index (UKCSI) produced every year by the Institute of Customer Service shows that insurance continues to lag in the middle ranking of businesses and services, when it comes to meeting customers’ needs.
Making it easier to contact the right person to help, making claims and policy renewals seamless, faster and more personal, are the top priorities customers want their insurers to fix.
Some customers want more access in omni-channels, some just need help
Apart from ease of contacting the right person to help, the highly satisfied and the more dissatisfied customers have different priorities for improvement. The most satisfied customers would like insurance providers to enhance their digital experience, whether interacting through websites, apps, social media or a mix of channels. Priorities for improvement identified by the more dissatisfied customers focus on issues such as being able to talk with knowledgeable and helpful support staff, speed of resolution, product quality and reliability.
Recently we commented in another blog article about trends in data infrastructure for insurance, and the ‘power of the platform’ when it comes to gaining access to clean and verified data at speed, precisely at the point of the customer journey where it is needed.
This is the case whether considering policy history and other data attributes used for pricing, past claims data, GIS and enriched property attributes made available across the whole industry or business data for enriching the experience of SMEs in particular: it all comes down to using the power of the data to price better and to make things easier for the customer.
Following on from our launch of the Home Prefill service we’re already in talks with some clients and retro testing of new services in some of these areas for property data insights and commercial, and SME insurance.
The ability of an insurer to accurately price its premiums is critical to sustainable, long-term profitability.
With the question of renewals pricing and dual pricing making headlines recently, it’s likely we are going to see a re-focusing on the insurance principles of a ‘fair pricing for a fair risk’.
Hyper-accurate location data, such as we service through the LexisNexis Map View platform down to the building footprint level, is going to become more important in improving insurance processes and aggregated risk assessment across different business lines and distribution channels.
Accurate pricing is always going to be dependent on the most precise and comprehensive data.
In terms of external data and the new world of sensor data coming from devices in the Internet of Things, this is an area where it pays to be prepared sooner rather than later with the necessary data pathways. Looking at the current trends and how new business cases are emerging in the smart home and motor telematics, for example with our work on the Global Telematics Platform, the ability to ingest new types of external data for insurance is going to be critical.
Whether you love it or hate it, the Consumer Electronics Show (CES) is a truly eye-opening look into the world of technology. And this year, aside from the gadgets like flexi smart phones, self-driving luggage, VR in some creative applications like restaurant menus or property insurance risk assessment, there are some other consumer trends that are going to impact on insurance.
‘Trust’ in data, how to arrive at the real ‘truth’ or insights from the data, and privacy were some other highlights from the show. 5G coming into insurance telematics and connected car applications, voice-activated services, artificial intelligence and use of audio for shaping customer communications, as well as cyber-resilient technologies, are some other key trends coming out of CES this year.
Previously, CES has showcased plenty of Level two self-driving vehicles (to use the Society of Automotive Engineers classification). L2 is all about partial autonomy: adaptive lane keeping, parking assist and automated emergency braking.
Level three (environment detection, for overtaking for example, and the lowest classification of automation) and Level four (no direct human interaction required when in autopilot mode) are what CES 2019 is all about. Almost 50 corporations, from Apple to Amazon to Google/Waymo to Cisco, to new players like Aptiv and China’s Didi Chuxing, and the mainstream automotive OEMs are working on autonomous vehicle projects around the world. Self-driving car fleets are taking to the streets for live testing this year courtesy of GM, Ford, Volvo, Audi, BMW, Jaguar Land Rover, Daimler and others.
Alexa, find me the best renewal quote for my motor insurance? Google I’ve had an accident can you alert my insurance company?
Digital assistants are also going to come into many more places in our lives, in vehicles, sound bars, smartphones, kitchen appliances and TV sets. Many of those shown at CES now have Amazon Alexa or Google Assistant. And the proliferation of these voice services is surely going to be a part of the wider trend towards ‘automation’ and ‘digitisation’, which our LexisNexis Risk Solutions insurance survey last year identified as an important goal for the more than three in four insurers who believe contributory databases are going to play an important role in future.*
In our survey almost all insurers (90%) said a customer’s policy history information is ‘extremely’, ‘very’ or ‘somewhat’ valuable for knowing how to improve the customer experience.
In a separate home insurance consumer survey**, 85% of policyholders told us that automation in the form of Home Prefill was something that they welcomed, and they felt it makes the sign-up process ‘much easier’ or ‘somewhat easier’.
We can expect to see more of this type of innovation coming to the market this year. It’s going to take data being used to create new actions that help the customer, insurance providers coming together to create the necessary data assets and data inter-connectivity across the industry.
*LexisNexis Risk Solutions carried out an anonymous survey, the UK Insurance Underwriting Digitization Study, 8 December 2016–9 January 2017. Mixed mode of data collection: online panel and telephone interviewing. The sample was 170 insurance professionals, 55 personal motor, 52 personal home and 63 commercial property. The respondent must spend 30% of their time in underwriting-related activities for a given line to be assigned to answer questions specific to that insurance line.
**LexisNexis Risk Solutions carried out an anonymous survey, the UK Home Insurance Consumer Study, 25 January–1 February 2017. The sample was 1,500 residential homeowners in the UK, who owned their current residence for two years or more, home insurance covering their primary residence, equally or solely responsible for home insurance decisions.
To find out more about how we support insurers follow these links for information on our Connected Car Team, the Global Telematics Platform or the LexisNexis Risk Solutions website for US insurance or UK insurance.