Enrich your data for more competitive quotes, improved loss ratio and reduced fraud
Changes in the market have created further demands on insurers which has driven increased focus on new technologies, data sources and customer-centric products and propositions. Regulation and customer needs are the defining factors behind the changes, but the improved use of data could hold the answer to satisfying both. In this blog, we will focus on how enriching data could support you when identifying dual pricing, preventing fraud and reducing customer dissatisfaction.
Firstly, let’s look at some of the most common challenges we’re hearing from the market and our customers:
- Changing channels – increased use of online channels and higher customer expectations are bringing pressure for insurers to verify quotations, respond to queries and provide services more quickly and accurately.
- Price pressures – customers are price savvy and are getting inconsistent quotes back as they are not identified as the same person, or recognised as an existing customer. Also, the competitive market is leading to squeezed margins.
- Regulatory pressures – the regulator is looking closely at the issue of dual pricing and how it needs to be tackled to ensure fairer outcomes for customers. Furthermore, GDPR, Know Your Customer and other regulation puts more pressure on data management and the use of data.
- Personalised services and products – customers want, and expect, a personalised experience and service during renewals and mid-term adjustments, leading to an increased need to gather more data from new sources.
- Increased insurance fraud – the Association of British Insurers found the number of detected fraudulent insurance applications and claims had increased, with an average of 1,300 being exposed every day in 2018. The increased fraud losses hit the margins of insurers leading to price increases for genuine customers.
In order for insurers to provide an accurate quote for customers, they need to gather as much insight as possible which often relies on the customers providing correct details. The information provided could be inaccurate, long application forms with complex questions could lead to customer abandonment, the application might be fraudulent, the customer might represent a high risk or you may need to repeat this long process to renew a policy.
With so much to consider, where can insurers start?
A great place to start would be to review the data you already hold and then match data that’s coming into the business, whether that’s at point of quote through to point of claim, mid-term adjustment or renewal. By matching each of your existing customer records, insurers could confidently link a new quote to an existing policyholder or someone from an exemption list, in real-time. This opens a wealth of opportunities and benefits for insurers including meeting regulatory compliance, creating visibility of all the activity for a single customer in one place and improving data quality through deduplication and spotting inconsistencies.
IT constraints and legacy systems can make accessing the data and insights that insurers have gathered difficult and time consuming. Therefore, the next consideration could be to host data on a secure single platform available at the point that data is being called. This can allow an insurer to search the same data via their various channels and use the insight on their customers, while more easily ingesting new data sources to create accurate quotes and a better customer experience. The additional functionality will support insurers to identify who their existing customers are, how they should be treated and further enriches quotations and renewals with the extra insight provided.
Top three benefits for utilising hosted data and data matching:
- Recognising existing customers and pricing fairly
- Fraud prevention (exclusion lists)
- Using insight gained to improve customer journey across all channels
Find out more about how client hosted data and data matching can work for you on our iCache platform webpage.