In UK general insurance, the motor sector is already the most automated and digitised at the point of quote by a small margin. But it is also the sector looking to introduce automation into the most new processes, according to our recent research*.
Currently insurers have a fairly even mix of manual and digitised processes, according to our survey. When we asked this sample of leading motor, home property and commercial property insurers 47% of them said their current underwriting processes are all or mostly digitised. Applications are currently the most highly automated part of the process, particularly for home insurance. Quoting and property surveys (where relevant) are the least automated overall.
The responses show there is no marked difference in the level of digitisation between insurance lines, although motor insurers considered themselves the most automated sector in quoting, and they plan to digitize further in the most new areas.
The findings also shine some light on where insurers feel they stand in relation to their competitors. Showing an element of confidence, or even over-confidence, a greater proportion of insurers feel they are operating with a higher degree of digitisation than competitors, compared to insurers who feel they are operating with a lower degree of digitization relevant to competitors.
For all types of insurers we surveyed, applications was the process most of them said they plan to automate further. But around half of insurers said they also have plans to automate other aspects of the customer lifecycle such as quoting, claims, underwriting and surveys (in the case of property insurers).
Aspects of the insurance process currently dominated by manual processes
- 30% of insurers said the application process is currently all/mostly/half manual
- 53% of insurers said the underwriting process is currently all/mostly/half manual
- 54% of insurers said the claims process is currently all/mostly/half manual
- 72% of insurers said the quoting process is currently all/mostly/half manual
- 77% of insurers said the survey process is currently all/mostly/half manual (personal home and commercial property only)
- Only 4% of insurers said none of these processes are currently all/mostly/half manual.
Aspects of the insurance process insurers plan to digitise/automate further
- 73% of motor insurers plan to further automate applications (compared to 58% of personal home and 60% of commercial property)
- 58% of motor insurers plan to further automate claims (compared to 48% of personal home and 44% of commercial property)
- 49% of motor insurers plan to further automate underwriting (compared to 40% of personal home and 48% of commercial property)
- 49% of motor insurers plan to further automate quoting (compared to 58% of personal home and 48% of commercial property)
- 52% of personal home and 35% of commercial property insurers have plans to further automate surveys
- Only 6% of motor insurers, 2% of personal home and 5% of commercial property said they have no plans to further automate these processes.
Aspects of the insurance process where data and analytics could be better utilised
Insurers think that data and analytics could be better utilised in a variety of areas, primarily marketing, underwriting, claims and compliance. Relative to commercial insurers, personal lines are more inclined to see marketing and customer on-boarding – with automated form pre-fill for example – as a priority area where data and analytics could be better deployed.
Most motor insurers (74% of them) think that new digital selling channels will allow access to better data in some form, although a smaller number (11%) of them believe this will definitely happen.
- 69% of motor insurers believe data and analytics could be better utilized in marketing (compared to 60% of home insurers and 41% of commercial property insurers)
- 55% of motor insurers believe data and analytics could be better utilizsd in compliance (compared to 58% of home insurers and 43% of commercial property insurers)
- 51% of motor insurers believe data and analytics could be better utilized in underwriting (compared to 60% of home insurers and 56% of commercial property insurers)
- 49% of motor insurers believe data and analytics could be better utilized in claims (compared to 56% of home insurers and 52% of commercial property insurers)
- 42% of motor insurers believe data and analytics could be better utilized in applications/the point of customer contact (compared to 40% of home insurers and 29% of commercial property insurers)
- 40% of motor insurers believe data and analytics could be better utilized in renewals (compared to 35% of home insurers and 48% of commercial property insurers)
- 31% of motor insurers believe data and analytics could be better utilized at the point of quote (compared to 33% of home insurers and 33% of commercial property insurers).
It is interesting to note that motor insurers, the sector already dominated by sharp profit margins and price comparison sites serving millions of quotes by the sub-second every day, are also the sector preparing the way for even greater digitisation, both for sales and for other parts of the operation.
*LexisNexis Risk Solutions carried out an anonymous survey, the UK Insurance Underwriting Digitisation Study, 8 December 2016–9 January 2017. Mixed mode of data collection: online panel and telephone interviewing. The sample was 170 insurance professionals, 55 personal motor, 52 personal home and 63 commercial property. The respondent must spend 30% of their time in underwriting-related activities for a given line to be assigned to answer questions specific to that insurance line.
This article is care of LexisNexis, this article and others like it can be found here.
