A single 360-degree customer view of an individual, across insurance lines and across different lifestyle triggers, is very powerful. It is an insight that insurers are currently lacking, but it’s coming more into view with better use of financial history data.

The need for a complete view of a customer is being strongly felt. There’s no doubt that COVID-19 has accelerated a trend that was already apparent: the need for insurance providers to take into consideration factors such as creditworthiness, the appropriateness of products and the wider risk factors when dealing with the insured.

Current economic uncertainty has put in the spotlight the ethical duty of the insurance industry to look at the affordability and suitability of the product being quoted. The FCA’s Consumer Outcome principles spell out the principles whereby, in summary, retail products have to be designed to meet the needs of identified consumer groups and are targeted accordingly.

Consumers must be confident that they are dealing with firms where the fair treatment of customers is central to the corporate culture.

Consumers must be provided with clear information and be kept appropriately informed before, during and after the point of sale.

Amongst UK consumers who use credit to pay for insurance, there’s been an average £520 rise from November 2019 to November 2020*. The reliance on credit for insurance underlines how important customers believe it is.

Financial history data for creating better customer outcomes

Creating a better auto-renewals process, the UK Supreme Court case over definitions of business interruption insurance in the context of the pandemic, and the fact that nearly one in five consumers has cut back on their insurance cover in 2020*: these are all examples where better customer insight could help create a wider risk radar and better 360-degree protection for the insured.

At the end of last year the Financial Conduct Authority published its expectations of how the insurance industry should treat customers around renewals, business reviews, mid-term adjustments, helping customers pay their bills, and delivering guidance to customers in the context of the Coronavirus impact.

Insurers are confronted with many hurdles when it comes to making customer interactions more meaningful, removing errors in risk assessment. Investing to increase partner engagement across different channels (bancassurance or other resellers, price comparison sites, brokers and so on) relies on what value each partner brings to the table.

Being able to link partner data to your book of business, thereby creating a single customer view, is one of the best solutions to address these needs.

Additionally, there is always a desire to integrate new, external data sources to provide enrichment to your base. Be it financial history data, credit data, identity verification data (LexID, address history and so on) or lifestyle data (number of cars owned, current and past employment) the need to know all aspects of our customers keeps growing. It is thus imperative to build a single customer view of all customers.

In many ways brokers are at the forefront of this quest for customer knowledge, as they represent the customer interface in many cases. From our conversations with clients at LexisNexis Risk Solutions we know that the need to look at provision of installment premiums for the consumer is now more than ever at the forefront of their minds, looking after the needs of the insured for the long-term, supporting customers through these difficult times. In the context of this, as an agnostic data platform provider we have begun the process of widening the credit data and financial history information we’re able to serve to insurers and brokers.

In addition to our proprietary insurance-specific data, bringing additional data in the form of credit report information allows for a clearer creditworthiness assessment of the consumer, we’re working with TransUnion to build further detail into the view of an insurance customer or prospect. 

It’s all about identifying the customer and their needs, and by bringing public and private credit data from TransUnion into our platform we are able to offer insurance providers access to not only a variety in data sets, but also quality information to help them make informed decisions. This way we believe the market can achieve better risk management, by accessing trending data and further levels of customer insight to on-board and service their customers appropriately throughout the lifecycle.

This additional information from TransUnion is uniquely going to be available at point-of-quote over LexisNexis® Informed Quotes.

*Research for Premium Credit, conducted by Consumer Intelligence online among a nationally representative sample of 1,085 adults aged 18-plus on 20 August 2020.

Follow the link to the LexisNexis Risk Solutions website to find out more about how we support insurance providers.