For too long the commercial lines insurance market has been the ‘poor relation’ of its personal lines counterpart when it comes to the availability, quality and use of data. In the latest instalment of IB Talk, Martyn Mathews (pictured), senior director, personal & commercial Lines, UK and Ireland, LexisNexis Risk Solutions highlighted the gulf between commercial and personal lines when it comes to helping insurers and brokers make decisions based on data.
“My team and I, we’re on a mission to change that,” he said. “We want to help the commercial lines market benefit from some of those insights and learnings, but tailored specifically to their individual needs to drive process improvements… It’s great news for the commercial lines market that there is all this opportunity, because they’re starting from a position that is quite some way behind where the personal lines market is, and it’s being embraced by the market as we speak.”
As part of this ambition, the LexisNexis team has developed a new solution to unlock the full data potential available to commercial lines players. Mathews noted that this was developed on the back of the regular conversations the firm has across the market, as a result of key themes and challenges that came up on a recurring basis. When speaking to customers in the commercial space, he said, they were keen to understand how organisations like LexisNexis can actually help digitise the processes involved with buying insurance and the risk processes involved as well.
“We also conducted some market research in the commercial space, just to understand what senior stakeholders from within the sector were saying about these types of processes,” he said. “And only 23% of people who responded said, ‘actually my processes in the commercial space are digitised in effect’. So, three-quarters of the respondents didn’t really digitise to help improve those processes, which is pretty staggering.
“Forty-nine per cent (49%) said their processes are completely manual, in effect, and we know the inefficiencies that can be caused by manual processes, which means there’s a whole cohort of people who are either doing something digital or recognise the need to. That was a fascinating insight for us and it helped us come to this conclusion that we can take the learnings that we’ve had from the personal lines market, and start to tailor them and apply them to commercial lines.”
LexisNexis is rolling out this solution slowly but steadily in areas where the commercial market has indicated it would like to see improvements. The firm will build on that over time, utilising other services on offer in the personal lines space to make the path ahead smoother for commercial lines customers.
The launch of this new solution could not be better timed, Mathews believes, given that so many new small businesses have been created over the ‘COVID period’. Looking at the economic environment unfolding, Mathews cited figures from the ONS which revealed that in the first quarter of 2021, there was a 14% increase in the number of businesses created, the highest Q1 growth figure ever recorded.
These new businesses require insurance, he said, and if you’re an insurer or broker looking to write those risks, how can you be sure that this new business fits your risk profile? That’s an incredibly difficult thing to determine, and with more businesses out there looking for the right coverages, insurers and brokers are just going to have to work harder than ever to provide assistance that is in line with their own risk appetite. The good news from where Mathews stands is two-fold – firstly, the market is more aware than ever that it needs assistance and advice if it is going to mitigate this challenge and, secondly, there is now a service available to offer just that.
“Our Commercial Pre-Quote service is designed to help with the onboarding of those risks,” he said. “[It’s those changes in the market that] have compounded the issues with regards to the lack of data as well, and it’s a trend that we expect to see continue. I think people’s working habits, behaviours, what they want to do with their life… all of these sorts of attitudes have changed simply because of the world that we live in. And what’s great to see is that the insurance market in general, and the commercial insurance market, is embracing that change and looking for ways that they can support the growth of those businesses.”
Find out more about LexisNexis Risk Solutions Commercial Pre-Quote offering here
