Insurance providers are under significant pressure to know their existing customers to a much finer degree at renewal, to help ensure they are offering the appropriate cover, premiums that are fair and to demonstrate to the FCA the steps they are taking to deliver the correct consumer outcomes.
In the FCA’s final rules1 for renewal pricing it made clear that if insurance providers do not have sufficient information to satisfy themselves that a renewal contract is consistent with a consumer’s demands and needs, they will need to obtain and consider that additional information before proposing a renewal.
It’s taken a shift in thinking and in processes, but the industry already has access to the tools to help ensure they are able to take into account all relevant information on changes to the consumer’s risk in order to calculate the renewal.
Gain the single customer view – Insurance providers can start by creating a single customer view, bringing together all their data regarding a customer in terms of claims, marketing, and quoting for example. Linking and matching technology together with a unique identifier such as LexID® can create a single, holistic view of the customer that can be the foundation of all future contact and can be used to support pricing decisions. This can also help identify when an existing customer has approached an insurance provider as a ‘new customer’ to help ensure pricing consistency.
Use one access point to the data you need – Rather than using multiple suppliers and sources of data enrichment to help inform the renewal process, a single access point can streamline how insurance providers ingest data and deliver swift quotes to customers. LexisNexis® Informed Quotes provides access to over 40 different data sources for real-time risk assessment at an individual, asset, household and postcode level. The provision of this data through all major software houses is evolving the risk assessment process for insurance providers across the sector, helping them to make faster and more informed decisions while delivering a better customer experience.
Look for broker-specific data enrichment solutions – Brokers have slightly different data priorities and should therefore leverage broker-specific data enrichment solutions through their preferred broking platform or software house. Broker Intelligence from LexisNexis Risk Solutions hones in on a range of attributes about an individual and their policy history, for swift delivery at the point of quote or renewal. In addition to access through broker quoting systems, Broker Intelligence can be used through direct integration with the LexisNexis® Informed Quotes platform.
Know more about the market’s experience – Relying purely on customer data already held along with pieces of publicly available data can leave important gaps in knowledge. Market-wide policy history, quote behaviour information and claims data gathered from across the market offer a more complete understanding of risk and can even offer more valuable context for the changes in behaviour as a direct consequence of the pandemic. For example, through COVID-19 attributes, we can tell the market if cancellations or gaps in motor insurance cover occurred during one of the UK’s national lockdown periods so that insurance providers can price with this understanding.
Maximise the advances in vehicle data – New sources of data on valuation, mileage and MOT history through our collaboration with Cazoo Data Services add to the insights on the individual to help improve pricing accuracy at renewal and also open the opportunity for more engagement with the customer during the policy term. Similarly, data on the build of the vehicle, including its standard and optional ADAS features, is now available for pricing and renewals to offer consumers potential benefits based on their choices.
Home in on geospatial intelligence – Postcode level information is no longer adequate in the new pricing regime, address level geospatial data intelligence is now readily available to help understand perils risks such as fire, flood, subsidence as well as local hazards and crime rates. These insights will soon be complemented by industry-wide claims data to bring a further layer of intelligence when assessing risk for renewals.
Fundamentally, the data available to the market to assess risk is growing at a rapid rate, this is only going to be of inherent benefit if it can be ingested into the insurance ecosystem at the right time and at the right points in the customer journey. A single gateway to a host of datasets can help insurance providers assess risk based on all the available information and deliver renewal quotes and cover that meet the needs and demands of customers at the point of renewal. By leveraging data, analytics and technology insurance providers can know the customer better, in order to serve them better.
Martyn Mathews | Senior Director of Personal and Commercial Lines | LexisNexis Risk Solutions, Insurance
Read more article from Modern Insurance Magazine here