IE caught up with Jeffrey Skelton, MD for Europe at LexisNexis Risk Solutions, Insurance, to look back at one of the toughest years of the 21st century so far.
IE; Can you summarise the current insurance landscape as we count down the final weeks of 2020?
JS; The insurance market is undergoing a huge transformation driven by changes in customer needs and expectations, the growth in data sources to understand risk, ongoing advances in vehicle technology, as well as the very real threat of climate change. This transformation was happening prior to the pandemic and in some respects, COVID-19 has only accelerated the process.
There is a big focus on digitisation, personalisation and innovation, with data as the backbone to deliver the types of insurance products and services consumers and businesses want and will value to suit their changing lifestyles.
IE; How have you seen the industry evolve this year?
JS; We have seen a real hunger for data to better predict and understand risk, not just for pricing but to support the whole customer journey. In commercial property and household insurance, the use of mapping tools and ‘live’ data direct from the Environment Agency are putting insurance providers in a much stronger position to help mitigate environmental risks. In motor insurance, policy history and quote data is helping the market price more accurately and identify fraud risk to help keep costs down.
But perhaps the biggest evolution is in connected car and vehicle build data to help support more personalised insurance based on the safety features of the car as well as how it is driven. The work to bring this data into the insurance ecosystem has gathered real momentum in 2020.
IE; What technology and/or approaches have you seen emerge in the industry due to COVID-19? How do these compare to before the outbreak?
JS; The way we live and work has changed dramatically in the past year, consumers are under different pressures, risks have altered and insurance providers are keen to use data that will help them understand those changing risks and treat customers fairly. Responding to that need, we’re just about to launch a new solution to help the market to factor for changes in motor policies such as cancellations and gaps in cover that were a direct consequence of the pandemic.
IE; What are your predictions for the industry in 2021 and beyond?
JS; Innovation from insurtechs and insurer/insurtech collaborations will gather pace while data from the IoT, connected cars and from shared claims contributory databases will deliver new insights that may help mitigate risks and take the pain from claims. I also think there will be increasing focus on achieving a single customer view – knowing the full history of the relationship with a customer across all parts of the business. As M&A activity accelerates this will become increasingly important.
We look forward to working with insurance providers to help them better understand the changes in risk 2020 has created and hope we can all return to some sense of normality in 2021.