Roland O’Neil, Cazana’s strategic partnership manager, tells Insurance Times how using insurtech can help insurers treat customers fairly while embracing digital transformation
The FCA deadline for motor insurers to implement fairer pricing and auto-renewal remedies is rapidly approaching – but how can knowing more about the vehicle that is being insured guarantee that the customer and insurer are both being treated fairly?
For the regulator’s pricing reform to have the desired impact on the industry, it’s important that it works for everyone.
It goes without saying that the changes will have an industry-wide impact on how insurers write and renew their motor insurance business. But this doesn’t mean the reform must have a negative impact on writing profitable business. It’s not just about reducing premiums. It’s about having enough information about the risk to adequately assess and accurately price. Accurate pricing is fair pricing after all.
Recently, many insurers have seen the value of digital transformation. Thanks to the Covid-19 lockdowns, the value of digitisation was seen before the FCA published its new rules.
Tools typically used by insurtech businesses, such as application programming interfaces (APIs) and software as a service (SaaS), can help complete the journey of insurance customers while pricing risks fairly and accurately.
Many products can also assist with fraud and identifying anomalies that may require further inspection.
In the past, additional vehicle data that would strengthen underwriting would have been manually searched for and was often overlooked as a result. This process can now be accessed through APIs at point of quote, hundreds of thousands of times per day.
Data that can form valuable insights is proving to be the best path towards combating the new challenges insurers face.
Being able to see the full picture of risk while maintaining customer-centric strategies is where the money is – this approach is proving effective for both the customer and the insurance business.
Integrating systems with powerful APIs will provide insurers with 24/7 access to hundreds of data fields, including real-time valuations, market forecasting and rich vehicle history.
Digital tools to support new rules
There are many insurers that will have no real issue with implementing the FCA’s new rules and meeting deadlines as a result of insurtech tools already in use.
However, there are some that haven’t started using digital tools in the most effective way and may not know the barrier they are creating toward generating attractive returns. Simply stated, those that join the insurtech revolution will thrive and those that don’t could suffer insurmountable loss.
Using insurtech, like APIs and SaaS tools, will result in higher growth, lower costs and - more importantly - satisfied customers.
To meet the FCA requirements, the overall goal of all insurers must be to meet customer expectations while sustaining business growth.