Insurers and insurance brokers in the UK are missing out on a range of opportunities to stream line their business models and develop better data for risk management. It’s quite a surprise to realise that British insurers are lagging behind most other industries when it comes to taking advantage of new technologies.
Social Media Data Mining
What do customers want? Well PWC’s report on the Future of Insurance indicates that customers want to choose their point of access to a channel, they want bespoke premium offerings that take into account their circumstances, and they want prices to reflect value in the product.
PWC recommend that you tap into this behaviour. You can use data mining of social networking groups to better assess risks, and gain in depth understanding of how consumers are choosing to purchase their insurance products.
As technology becomes cheaper there’s no reason that customers can’t use sensor technology from home to better inform an insurer about their current state of health. This could also enable the early identification of new health problems – saving on liabilities and translating into lower premiums for the client. We wonder why it is that no British insurer is leading the call for adapting this kind of technology to better serve the health insurance market?
Networked Benefits and Policies
Social networks aren’t the only networks of people out there. There’s a trend towards collectivisation in many other areas of finance – such as peer-to-peer and local lending models. Yet, where are the insurers tapping into this trend? The British public is going through times of financial crisis – why aren’t insurers developing policies for student dorms which can be shared (at a lower cost than insuring individually between all the students there? Or business insurance policies that allow a group of shop holders or office users to collate their needs into larger policies with lower overall premiums?
It’s no secret that people shop around for their premiums but why is it that a customer can use an online portal for a comparison but can’t get one from their broker in many cases? If you were to offer similar comparison technology on a sales portal for your insurer – you could then objectively compare benefits and demonstrate the value in your offering. It’s a simple way to help the customer make a decision without having to trawl round a dozen brokers. It’s also a good way to ensure your products are competitive.
OK, there’s been a bit of a move in the right direction such as the Aviva application that we covered a while back – that gauges a driver’s driving to calculate premiums. However, there are plenty of other insurers who haven’t made the move yet. That’s despite the technology being easily available and cheap to adapt (in comparison to developing it from scratch). Insurers could also monitor the use of vehicles throughout a policy lifecycle and as importantly where they are used – to better calculate risk for future policies.
All told UK insurers and brokers need to catch up with the times. Technology could offer a serious competitive advantage and many of the ideas above also offer retention strategies for reducing customer acquisition costs. Here at Riskheads we think there’s a strong case for early adoption of these technologies which have been tried and tested in other industries and bring proven benefits. Leading the charge could leave you out in front for a long-time to come.