Opinion: In 2019, Data Will Hold The Key to Changing Customer Perceptions

In this Opinion piece, Keith Binley, MD UK and Ireland for LexisNexis Risk Solutions, looks at how 2019 is set to be a year of transformation for the insurance sector. In particular data will now hold the key to challenging and changing customer perceptions.

There is little doubt that front of mind for insurance providers as we head into 2019, is the need to build consumer trust and a recognition that the perception of the market being price-driven and commoditised needs to change.

The sector is all too keenly aware of The UK Customer Satisfaction Index (UKCSI)[i] produced annually by the Institute of Customer Service which has shown the insurance sector lagging in the middle ranking of businesses and services, when it comes to meeting customers’ needs. Despite improvements made in 2018 there is a lot of work that remains.

In 2018’s report[ii], for the most satisfied consumers, an enhanced digital experience was the key improvement insurers needed to make. Whereas, the most dissatisfied consumers identified an unsatisfied demand for knowledgeable, easy-to-access support staff.

But the one area for improvement that was common for all the customers surveyed was a desire to streamline their experience. Making claims and policy renewals seamless, faster and more personal will therefore be a key priority for insurers throughout 2019.

This will rely heavily on the effective use of customer data. The ability to innovate and personalise using consumer insight and identity data, we believe will play a significant role in improving the individual consumer experience and consequently improving the image of the sector as a whole.

Changing Perceptions

Data also has a role to play in addressing perceptions regarding unfair pricing practices. Accurate pricing is always going to be dependent on the most precise and comprehensive data available. With renewals pricing and dual pricing under the spotlight, it’s likely we are going to see a re-focusing on the insurance principles of a ‘fair pricing for a fair risk’.

The feedback we have had from our customers in the market certainly suggests this will be a key priority with the need to price and quote more competitively/accurately cited as the number one reason[iii] for working with us, followed by a desire to make operational cost savings and a need to enhance the customer experience.

From a commercial property insurance perspective, hyper-accurate location data 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.  With the World Economic Forum’s Global Risk Report[iv] warning of more frequent and more severe extreme weather there will be a heightened need to understand perils risks at point of quote and where exposures and accumulations lie.

IoT derived data

Increasingly, valuable new data will be IoT derived – think connected home devices or telematics apps – insurance providers will have the opportunity to leverage this data to streamline the customer journey. One piece of technology that is set to contribute data and play a growing role in customer’s lives throughout 2019 is the digital assistant. This may be in vehicles, kitchen appliances or televisions and media services. The growth of these services points to a shift towards ‘digitisation’ and ‘automation’ that is set to transform the lives of customers and their expectations from insurance providers. Both back and front-end systems will need to evolve to meet these demands.

It is vital that the insurance market prepares for the emerging proliferation of sensor data coming from connected devices, building the necessary data pathways and working out pricing in relation to them.

Tackling Fraud

Whilst streamlining the customer journey will be a core focus, insurance providers will not want to lose sight on fraud detection and prevention, especially as more sophisticated complex fraud by organised fraud rings is rising. To address this menace insurance providers must look at innovative methods of data linking and matching across platforms and better claims forensics.

The power of the platform

Data platforms are one way for insurance providers to improve pricing practices and assess fraudulent claims.  These can facilitate access to clean, and more accurate data at speed, precisely at the point of the customer journey where it is needed, be that application, quote or point of underwriting.

This is the case whether considering policy history and other data attributes used for pricing, like past claims data, GIS and property attributes that are available across the whole industry or business data for enriching the experience of SMEs.  It all comes down to using the power of the data to price better, and to make things easier for the customer.

We can expect to see more of this type of innovation coming to the market this year.  It’s going to take insurance providers coming together to create the necessary data assets and data inter-connectivity across the industry to create new actions that improve the customer experience.

This feature is a sponsored article, produced in association with LexisNexis UK