A detailed study of the home insurance market by LexisNexis Risk Solutions UK has underlined the need for home insurers to strengthen their validation processes and improve their customers’ experience by leveraging prefill at the application stage. In the study, 68% of 1500 homeowners said they believe it is acceptable to omit or adjust information in their application to keep their insurance premiums low. At the same time, 61% worry they might accidentally omit something in their application, and 25% believe that their claim should be covered, even if the information they provided when they applied was not completely accurate.
Strengthening the validation process will help tackle the problem of misrepresentation and fraud and speed up what is commonly a lengthy question process to obtain an accurate quote.
The number of questions asked at point of application means drop-off rates can be high, especially when customers find it difficult to answer certain questions. As a consequence, 64% of home insurers surveyed by LexisNexis Risk Solutions said they believe that automatically prefilling key property data during the application process is extremely or very valuable.
Insurance customers overwhelmingly support this idea – with 85% of homeowners in the study saying that they would like to see information on their property pre-filled when they apply for home insurance, to make the process easier. Also, 87% said the application process would be improved if the number of questions asked were reduced, with ten questions as an ideal number. Most importantly the majority of respondents said they were willing to share their property data to enable prefill.
Jay Borkakoti, Director of Home Insurance, UK and Ireland, LexisNexis Risk Solutions, said: “Clearly, the more data that can be prefilled at the point of application, the fewer questions consumers need to answer, which improves their experience with buying home insurance.”
In the LexisNexis study, when home insurers were asked to rank in importance the data sources that would be most valuable in assessing risk at the application stage, unsurprisingly, past claims data ranked first. Interestingly, data on other occupants in the home ranked almost equal in importance to personal data on the homeowner. This points to the fact that some of the sector’s most significant losses can stem from incidents caused by the home occupants.
Jay Borkakoti continues: “Given the appetite from consumers for prefill, coupled with the insurance provider appetite for improved data sources, such as better past claims data, information on occupants and the home owners, we believe there is a strong opportunity for more market-wide contributory datasets to help assess risk.
“This is certainly a development that LexisNexis Risk Solutions is keen to support. The apparent willingness of consumers to share their data in exchange for more accurate premiums and an enhanced application experience, means there is a clear competitive advantage to be gained by leveraging data in prefill and risk assessment at the application stage.”