At LexisNexis Risk Solutions we’re focused on delivering actionable insights to the home, motor and commercial insurance markets based on market-wide consumer, business and location data.
As we work in partnership with the insurance sector to support accurate pricing and decision-making throughout the customer journey, from point-of-quote to claim, our primary mission during the pandemic has been to ensure our customers don’t have to think about us. We have got on with doing our job so that they can focus on their customers.
The recent months have seen the world tilt on its axis in a way not known before. The arrival of the coronavirus pandemic has brought about changes to our daily and business lives that many believed could only happen in far-fetched science fiction films.
As life with COVID-19 became an ongoing reality, we have all needed to adapt and I have been massively impressed at how well our people, our customers and our communities have responded to these unprecedented times.
In February LexisNexis Risk Solutions undertook a business continuity exercise which put us in a good place for when the lock down occurred.
Many of the employees across our business routinely work remotely, either full-time or part-time, so we were already well equipped for employees to work from their homes. The transition to full home working has therefore been quite straightforward, and it has been pretty much business as usual since that point. Needless to say, video conferencing, as for many businesses, has been hugely valuable for keeping in touch with colleagues and customers alike.
What has been really interesting is the change in risk for insurance providers as a direct consequence of COVID-19.
There has already been much discussion around motor insurance and how changes in travel patterns could drive demand for more personalised insurance. We can think of how the lower mileage overall has been combined with lower evening-time car use in particular, and higher instances of speeding, especially in rural areas. There is also the possibility of permanent changes in travel patterns (three out of five people said in a recent study across the UK that they would like to work from home more often than they did before the lockdown).
Several reports have showed growing interest in telematics and ‘pay as you go’, mileage-based, usage-based insurance (UBI) products for those who have been using their cars less.
For many consumers COVID 19 was a stark awakening that usage-based insurance could be a smart choice.
In one recent study, 40% of motor insurance customers said they would be willing to consider usage-based insurance, nearly three times the number from a previous survey before the pandemic.
When it comes to telematics products, there is a realisation for some consumers that it’s not just about the discounts: the rating and pricing factors are fair. And there are other benefits with some products, such as coaching for safer driving and vehicle tracking for countering theft.
These trends will increase the value and need for vehicle centric data to the insurance sector.
On the other hand, as people have stayed at home, we have seen household and commercial property risks change. Some UK insurers are reporting rises in fire claims as a result of unoccupied properties. Others will no doubt see higher accidental damage claims but fewer burglaries. There have also been reports of an increase in pet insurance policies as families decided lock down was the ideal time to get a pet.
During these shifting times, our role is to help the insurance market understand and respond to these new risks through data. COVID-19 has accelerated rather than stalled some of the innovations we had planned.
Policy history data is already bringing new insights to the motor sector, and we are now bringing to market LexisNexis® Vehicle Build, a new solution to better evaluate specific Advanced Driver Assistance Systems (ADAS)* to support pricing and underwriting. The next step will be mileage data direct from the odometer to support the market’s understanding of vehicle usage further.
From a property perspective there are also some new ways we can bring greater granularity of risk classification. We can now offer a single point of access to geospatial data, including perils data such as flood, fire and subsidence, alongside 42 other data enrichment databases for use by brokers and insurers at point-of-quote. In addition to this, we are taking the first steps to create a market-wide household claims database to bring a further layer of risk understanding to support home insurance providers understand the predictive information behind claims.
At the same time, the ability to visualise perils risks such as flood and fire right down to building outlines will be much improved through enhancements to our Map View geospatial intelligence visualisation tool.
The pandemic has reminded us all about the unpredictable nature of risk. Situations can change very quickly and often with little warning, outside of the traditional risk parameters that we’ve been using before. It is key that insurance providers have the insights and tools at their fingertips to offer a service that can adapt to change, and that their customers expect.
*Advanced Driver Assistance Systems (ADAS) are electronic systems that help the vehicle driver while driving or during parking to support safety.
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