You’ve probably heard of the phrase InsurTech – the insurance specific branch of FinTech which promises to be a ‘game-changing’ opportunity for insurers and brokers alike to innovate and boost the relevance of their offerings.
One man who feels passionate about the arrival of new technologies is Legal & General’s broker and affinity director Kevin Roberts who spoke exclusively to
Insurance Business UK to outline how the use of big data has the opportunity to streamline both the sign-up and claims processes – and could potentially revolutionise the industry within 18 months.
“We have to look at the big data opportunities out there,” he said. “I don’t know what the average is, but it is often circa 30 questions that we will ask people before they can take out a home insurance policy and that compares to just one click to buy a product on Amazon. Yes, they’re different – but consumers are demanding something easier so do we really want them to be answering all these questions, especially when the data is often already out there? Land registers and data warehouses – it is already known how many bedrooms my house has got and details about its construction so why do we have to ask all these questions?
“At Legal & General we believe that within 18 months we can give the majority of people a guaranteed home quotation without actually asking them any questions at all. That’s our ambition. Data is out there – so we don’t have to keep asking people all the time for it. It’s up to the industry to figure out how to use this data to make the whole process easier.
“Another major benefit is that the insurer will have got the data themselves – so it will reduce cases of misrepresentation or mistakes.
“It becomes a selling point for brokers – consumers will not have to spend so long filling out forms and the risk of making mistakes and claims being voided is massively reduced.”
It’s not just about streamlining sign-ups and claims, either – many new technologies could also have an impact on reducing premiums, believes Roberts, another attractive selling point for brokers.
“Take for example the connected home, as it’s been dubbed,” he said. “This is where you’ve got these sensors that you can add to your water pipes to detect unusual movements of water – so if you’ve got a burst pipe, for example, this can turn your water off. This has the potential to not only be great for consumers by reducing damage levels, but also from the insurer’s perspective given the reduction in costs.
“The main risk factors such as fire, storm, outside flooding – the big ones – you can’t necessarily mitigate. So the largest chunk of the premium will always be taken up by those. However, this could influence things by a few per cent – and have a positive impact on people’s home insurance bills, which is something to look forward to.”
While this is all well and good for the relationship between direct insurers and consumers, can we expect big data to have a similar impact on brokers? Roberts believes we can – as long as brokers are ready to make changes and move with the times.
“I want brokers to be at the forefront of these developments,” he said. “It’s our job as an industry to make sure that brokers get access to this data, enriched data, so that they can utilise this with broker software houses and broker systems.
“It’s time to ask questions. Take business and commercial insurance for example – do they drive different behaviours and different profiles? Do they pay, act or think differently? How do we monetise that data within the broker channel in a straightforward way? How can this information allow me to differentiate our broker channel pricing and our direct channel pricing? These are the questions we need to be asking – and the answers could make a big difference.
“So my message to brokers is this: start discussing it… think about it… demand it. Do your customers want this? I am guessing they do. Chat with your insurers, your software houses and make sure that you embrace this before someone comes in and does this around us.”
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