Insurer's pilot scheme will study cost-saving high-tech card system for personal lines

Personal lines customers will be able to manage their own claims and shop for replacements with a 'smart card', under a pilot scheme to be started by a "major UK insurer".

Consultancy firm Steria is to begin a pilot project with the insurer on the use of smart card technology in October.

Justin Balcombe, head of UK insurance consulting at Steria, claimed the use of smart cards for motor and household policies could improve claims handling and customer service and reduce overall claims costs.

A smart card is the size of a credit card, embedded with a microprocessor and capable of storing 80 times more information than a magnetic-stripe card. It can send data via a reader to a workstation or network.

Balcombe said: "In the case of a simple motor insurance claim, a smart card could significantly reduce the administration, complexity and costs of a claim. Personal data could be centrally held and managed, reducing time spent on claims administration.

"A smart card could also enable claimants to manage their own claims through a self-service process, as the unique user information stored within it could also allow a protected log-on to an insurer's website to manage a claim."

On household claims, Balcombe said: "These will be made far simpler, as smart cards will also be able to perform an e-wallet function: a settlement can be placed straight onto the smart card."

He said the cards would allow policyholders to buy substitute goods or parts.