Insurance brokers have shown immense resilience and adaptability in response to the pandemic. Thousands of small to medium-sized firms have been on front lines alongside their clients, excelling at what they do best – customer service. It has certainly deepened the appetite for data insights to help brokers feel better informed when communicating on a more remote basis with new or existing customers – whether by phone, email or online.
However, this shift was happening well in advance of the pandemic. Brokers operate within tight margins, they need to be efficient and slick in everything they do, and they are under increasing pressure to deliver the right risks to their insurance partners. As such, there is an expectation that they should conduct basic verification checks prior to putting a customer on cover.
But it’s not just about basic checks, brokers want to know more about their customers to be able to do more for them and compete more effectively. This has driven the demand for data to help brokers validate, verify and assess risk with greater accuracy. The goal is fewer questions at application stage, less need for referrals, greater accuracy in pricing and a smoother experience for the customer.
Brokers are also keenly aware that ‘knowing your customer’ is going to take on new meaning in confirmed following publication of the Financial Conduct Authority (FCA), policy statement on general insurance pricing practices shortly. As it stands, the market will have until the end of September to implement the systems and controls and product governance rules, and until the end of 2021 for the pricing and auto-renewal remedies and the reporting requirements.
Understanding the customer will be absolutely critical in this new regulatory environment – not just at the point of acquisition but at renewal. Brokers will need to know everything they can so that they can tailor their specific offerings to the customer, based on a holistic understanding of their risk at the point of renewal. Data underpins that capability.
The challenge is that until recently, small to medium-sized brokers have had limited access to the scale of data used by insurers and larger brokers as part of their quoting processes. They don’t generally have the dedicated analytics teams or the technology infrastructure to make data work hard for them. They have been underserved where data and technology is concerned.
The time has come to level the playing field
We’re not talking about masses of data – too much can potentially do more harm than good. We’re talking about the real meaningful insights they need, at the point of quote to make that buying experience better for the customer and to help ensure what they are offering in price and cover is right for that individual and competitive for them.
By distilling down the vast quantities of data available to the market to make it accessible, useable and meaningful for small to medium sized insurance brokers, through their existing software houses, knowing the customer based on a much more holistic view of their risk, is now within their grasp.
Brokers are experts in customer choice and consumer service. Their whole raison d’ être is to find the right product for the customer at the right time and at the right price so it is vital they have the data at their fingertips to deliver on that promise. And they are hungry for data – we have seen a particular appetite amongst brokers for policy history data to understand any previous gaps in cover and cancellations for example, but also more granular claims data and vehicle centric data.
Now, through a suite of solutions that offers an array of data attributes designed to support brokers within their rating and decision engines, they can undertake a fast and deep assessment of risk built on policy history such as gaps in cover, cancellation insights, claims history, public records, third party credit history and financial sanctions records plus other unique data. This means they can better assess a consumer’s risk, price more accurately and help reduce fraud.
One gateway to a wide range of broker specific data enrichment solutions based on an individual’s insurance history – including digitised NCD proof – will help level the playing field, giving brokers the fairest opportunity to deliver the personalised service their customers value, improve retention rates at renewal and compete effectively in a new pricing environment.
By James Burton, senior director of product management for the U.K. and Ireland at LexisNexis Risk Solutions