The insurance market is facing changes in risk, regulation and customer expectation – data will be its ally
The use of data, analytics and technology to better predict and understand insurance risk, not just to help calculate a premium but to do more for the customer and make insurance something they really value, is set to grow significantly. Customer needs and expectations have shifted, risks are changing and insurance providers need to keep pace through data.
With 40 years’ experience as a trusted custodian of consumer and business data, LexisNexis Risk Solutions is assisting the insurance market through its data transformation.
Consider the advances in vehicle safety technology and the impact this is having on accidents and claims, or think of the changes in our climate, with weather events becoming the norm rather than the exception. The way we live and work has also altered in the past year and some of those shifts may become permanent.
Live feeds on floods and storms, vehicle-build information and data from connected assets are part of a growing number of data sources that will help insurance providers understand these changes to deliver the types of insurance products and services consumers and businesses want.
It’s no longer enough to sell a policy and pay a claim – data can help ensure the right cover is offered at the right price and empower insurance providers to help their customers mitigate risks through the lifetime of the policy.
It starts at application: data prefill solutions are cutting the questions set and making the process less time-consuming for the customer while improving data accuracy for the insurance provider. This is proving particularly valuable in home insurance, known for its lengthy application process.
The next step is an industry-wide home claims database that has the potential to eliminate questions customers need to answer around past claims and give much more understanding of the past claims for a property. This will also support pricing and enable insurance providers to understand a new claim in the context of any past claims.
When it comes to quotes, data enrichment solutions are helping the insurance market understand more than a company’s own data could tell them about the person, property or vehicle being insured. With this information injected directly into the quote process, insurance providers now have access to a wide range of data for faster, more accurate decisions through the LexisNexis® Informed Quotes platform.
For home and commercial property insurance, this means they can build the clearest view of the property, its environmental risks, the resident or business owner to make the most rounded assessment of the risk, at speed. The same principle applies in motor insurance, with increasing access to vehicle-centric data such as MOT and valuation available to help support fairer pricing.
Data on the vehicle itself is also on its way as UK insurance providers test LexisNexis® Vehicle Build. This will help them to factor in the safety features on a vehicle, fitted both as standard and as optional extras, so that consumers have the opportunity to benefit from the investment they have made in their car’s Advanced Driver Assistance Systems (ADAS) features.
Part and parcel of the quote process is undertaking checks for ID fraud, which can leave innocent motorists exposed. Here the policy history and quote data we have collected over the past six years, along with email address intelligence through LexisNexis® Emailage® Rapid, are helping insurance providers price more accurately and identify potential application fraud.
Going beyond the point of quote, “live” and connected data can help insurance providers and customers mitigate risks – and maybe even prevent claims. The use of mapping tools such as LexisNexis® Map View using near real-time data direct from the Environment Agency now puts insurance providers on the front foot to alert those set to be affected by floods and storms and offer advice on how to protect themselves and their possessions.
We must also recognise the role connected car data is set to play in offering more personalised insurance, opening the opportunity to offer drivers immediate support if they have an accident. A data bridge between insurance providers and car manufacturers has been created to give consumers the choice to access insurance based on their connected car data.
Creating a better claims experience also comes down to having the most cohesive view of the customer. Linking and matching technology using our unique identifier LexID® for Insurance will help the market build that single customer view. Having a single view of the customer benefits the market on so many different levels – from marketing through to claims – but most importantly it unlocks the massive potential of the data insurance providers already hold.
We all want swift, accurate, personalised insurance quotes, and we want to know our insurer has our back – not just when we make a claim but from the moment we become a customer. Data insights that contribute policy history, quote and claim data, property data, vehicle data, live and connected data and more are helping insurance providers meet these expectations.
by Jeffrey Skelton, MD for Europe, LexisNexis Risk Solutions, Insurance.