New insurance pricing rules will impose new data requirements Business News

LexisNexis Risk Solutions is a Business Reporter client.

Knowing your customer will be essential as insurance pricing practices are reformed to ensure fair treatment and results..

From January 2022, UK insurers will work under new regulations that will require them to ensure that the price for renewing home or car insurance is consistent with the price they are offering a new customer, which will help to solve the problem of the price march, also known as loyalty. sadness.

Reforms are not just about the price of insurance; they aim to ensure that customers have the right product for their needs and achieve fair value over the long term.

The new regulations provide the insurance industry with an extraordinary opportunity to improve the consumer experience, confidence in the industry, and a much greater demand on the use of data to better understand and serve the customer throughout. the life of the policy.

If a consumer is confident that he is getting a good deal and products that suit his needs, he will not only want to renew, but he will be able to buy other products of the same brand. It works for both the client and the insurer.

Clearly, customers who don’t seek insurance and stay with the same provider year after year are the most likely to benefit from pricing reforms.

Based on a sample of policyholders who have renewed their auto insurance policies every year for the past five years, an analysis by LexisNexis Risk Solutions found that about one in four people have renewed their insurance policy. automobile each without searching and may have been billed for more than one new customer by its insurer over time.

Delivering the right products and delivering fair value to clients will require insurers to have a much better understanding of the individual and their risk, and leveraging all the existing data held on a client should be high on the priority list.

Using a unique identifier such as LexID®, customer data from complaints, marketing, quotes and different lines of business or customer databases of a merger or acquisition can be connected, resulting in a single customer view. This consolidated and accurate information for each client, based on their history with the insurance brand, can then be used at each point of contact and built to create a 360 degree picture of their risks and needs.

This can help make marketing more relevant and pricing and underwriting more accurate, allowing insurance providers to provide a fast and empathetic claims experience. The Single Customer View not only improves data accuracy and helps identify product suitability, but it also addresses a very basic annoyance for customers of having to repeat the same information to different departments.

Enriching data at quote time has become standard practice in new business quotes to help build a more informed view of a customer. Since renewal pricing strategies will need to be consistent with current new business pricing, a real shift in the use of data enrichment at renewal is expected.

The auto insurance market already has access to market-wide policy history, quote behavior information, and some claims information. On-board data on recent innovations provides a much clearer view of the vehicle and may offer a way to do more for the customer, such as rewarding them for advanced driver assistance systems on their car or providing improved coverage. based on a change in their rating of the vehicle. These are just examples of the types of data that can be leveraged to better understand client needs throughout the life of the policy.

Data enrichment platforms such as LexisNexis® Informed Quotes enable rapid risk assessment at the individual, asset, household and postcode level with information provided on everyone associated with the quote in a single transaction – such as additional drivers and joint policyholders in addition to the applicant or main driver.

Essentially, insurance providers can take advantage of a gateway to a multitude of data sets during the quote or renewal process, undertake due diligence checks and validate the information provided by clients to help deliver the results. for consumers that FCA’s pricing solutions are intended to create.

With a comprehensive understanding of risk, insurers can know that the product offered is suitable for the needs of the consumer and the supplier may be able to identify additional products and add-ons relevant to the individual. This has the potential to change the perception of insurance so that it becomes something that is valued and recognized as a catalyst for people’s daily lives.

Knowing the customer is the key to serving them better, and data will be the insurance market’s ally in one of the biggest regulatory changes the market has seen in recent years.

For more information, please visit risk.lexisnexis.co.uk/insurance

Originally posted on Business Reporter