Insurance distribution has changed rapidly over the last decade or so. Clients want cover arranged online, quickly, fairly priced – and compliant with all local or regional regulations too. Whether it’s a new quote, renewal or reinsurance contract, getting accurate risk data is crucial to pricing too of course, especially on property insurance. Here are some insights from Doorda;
The insurance distribution landscape continues to evolve rapidly, adapting to new customer segments with new demands and developing the digital experiences that these customers now expect. There is now no doubt that leveraging technology and applying effective data analytics to expand engagement, to improve risk assessment and to expedite the delivery of personalised policies are the business requirements of today and the future.Therefore, most industry participants have, or plan to have, strategies that need to deliver on modern technology foundations.
But whilst new opportunities are being presented through technology and data, there are still the high hurdles of legacy systems, integration, security, regulations and the sheer amount of data to navigate. Making difficult commercial, multi faceted choices are always the norm, but as other economic or external factors become more uncertain, the industry need for optimisation is urgent and the desire for impactful innovation has never been greater.
To improve processes for customer onboarding, product selection & underwriting, most agree that speed to market and the deployment of advanced analytics are critical.
Insurance is a need-to-know, not a nice-to-know business model Clearly, pricing accuracy always matters, ‘getting it right’ is business critical and no insurance business wants to price incorrectly or pay out disproportionately. Incorrect details for a property, or simply extrapolating details for some example properties across the rest of even a modest portfolio can lead to issues such as inaccurate risk assessment, uncompetitive overpricing and underinsurance.
Retaining and increasing customer engagement matters to all business sectors, but for insurance participants quote volume and accuracy really matter. Market competition is high with customers often requesting multiple quotes from different providers, comparing options, premiums and benefits. The bare facts are that timely and accurate quotes raise the likelihood of converting potential customers to policyholders.
Quantitative evidence shows that qualification friction, long customer journeys involving back-and-forth questioning and quote revisions are unpalatable to customers. To -and-fro processes cost time, money and effort and hence all insurers are striving to issue as many accurate quotes as possible in the shortest amount of time and with the least amount of friction.
Getting ahead of risk and smoothing onboarding involves asking the right questions and obtaining the right data
Customer-supplied information is often of insufficient quality, with key information often missing, out of date or unknowingly incorrect despite the best efforts by employees who may not be subject-matter experts.
Property characteristics and internal usage data in particular doesn’t easily present itself and hence information discovery is difficult because insurers can be unaware of what they really need to know. Complete, accurate data is laborious to obtain without detailed internal property usage understanding.
Getting ahead of risk and smoothing onboarding involves asking the right questions and obtaining the right data… and asking the questions early. Exceptions stall straight-through processing and comparisons with previous claims can only be done with a complete picture of risk; examples include complete or combined information on building construction information, valuations based on property age, occupancy estimates, and EPC data.
Empty buildings specifically command higher premiums, but proximity to empty buildings may also warrant higher premiums. Associated regulatory compliance notices, such as from Health & Safety Executive, may be relevant. Gathering relevant information to pre-fill customer questionnaires can save time and improve accuracy, improving the underwriting assessments and streamlining customer onboarding.
There is powerful commercial knowledge in accurate, combined property proximity and building characteristic data
The more comprehensive the data is on building type, vulnerability or maintenance, the easier the customer journey and optimisation of the underwriting process. And the smooth generation of quotes also generates valuable data on customer preferences and trends. Engaging customers and determining appropriate premiums have always been the insurer’s goals. Automatically completing risk profiles by seeking-out and capitalising on trusted external data will enable you to provide tailored coverage while retaining the protection of your business and that of your customers.
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