Gadgets and big data technology are playing increasingly crucial roles in the insurance industry, as both government and private firms clamp down on fraudulent claims. That’s especially the case for
AXA UK – CEO Amanda Blanc says it’s important for firms to focus on technology and innovation.
Black boxes installed in cars, for example, can be used to track vehicles’ speeds and identify those travelling too slowly to have caused any damage.
Blanc has been vocal against false whiplash claims in traffic accidents. In a blog post published last week, she said fraudulent personal injury claims were one of the reasons for the recent increases in motor insurance.
Whiplash claims are 50% higher than a decade ago, according to government figures. The Ministry of Justice said last November that the surge has been fuelled by a “predatory” claims industry that encourages minor, exaggerated and fraudulent claims.
“If it is reintroduced, the Prisons and Courts Bill could cap compensation for minor whiplash injuries, making fraud much less lucrative, helping insurers save on claims costs and funnelling money straight back into driver’s pockets in the form of lower premiums,” siadBl said in her post.
Blanc told
The Times that whiplash adds £70-£90 to every car policy. The report also said the number of personal injury lawyers has increased by 35,000 over the past five to six years. “They have created thousands of jobs for people who are essentially phoning up and pestering individuals to make whiplash claims,” said Blanc.
Last March, Fitch Ratings warned that insurers who fail to keep pace with big data transformation will be at a disadvantage.
According to the ratings agency, harnessing big data is proving essential for insurers seeking to maintain and increase market share and profitability.
“We expect early movers to gain a significant advantage, with the reward on technology investment increased by scale and network benefits,” Fitch said. “Those who reach critical mass first can pick the best risks and achieve operational cost efficiencies compared to the laggards.”
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