The UK is increasingly becoming like the US, where ‘big data’ has revolutionised insurers’ underwriting and fraud-busting capabilities. Companies have to work hard to keep abreast of evolving practices, and must make shrewd assessments over their investment in any new venture.

In a series of insights into the technology that is changing the industry, Insurance Times takes its first look at the key developments that will affect the market in the year ahead.

DVLA database developments

The insurance industry is on course to ramp up its use of third-party data in personal lines business. The biggest project currently in the pipeline is the arrival of the Driver and Vehicle Licensing Agency (DVLA) database.

Funding disputes with the ABI last year have been ironed out, and the project is on schedule to be delivered in Q1 2014. Once accessible, the database will provide the industry with valuable conviction data from a trusted partner, rather than depending on information from policyholders themselves.

Sabre chief executive Keith Morris says: “We’ve got all the approvals we need now, and I expect the thing to go ahead.

“It’s going to become core data that will be required for the foreseeable future, and we will eventually migrate to getting all data from trusted sources.”

Telematics standards on the way

Polaris, the insurance standards developing agency, has completed a process of creating telematics standards for the ABI. Consultation with most of the main telematics providers has informed the project and will set driver profile standards for the first time.

The standards issue remains contentious within the telematics fraternity, as some companies see the imposition of standards as effective limitations to their technology and its continuing development. The emergence of industry standards, however, will allow consumers to compare telematics providers and give brokers a framework for adding telematics products to their offering.

Wunelli IT and innovations director Paul Stacy says: “A lot of our partners are insurers that would quite fancy putting their telematics scheme on another broker panel. Polaris invited all our competitors for comments. Some came forward. Some didn’t.”

While Polaris is working on a set of data standards, accident and insurance specialist Thatcham is working on setting hardware standards for telematics technology.

In 2013, we are going to see both a larger volume and variety of data available for insurers’

Allison Nau, Lexis Nexis

Real-time pricing

Personal lines broking looks set to undergo an overhaul, with several insurers sponsoring the development of a real-time pricing hub for personal lines brokers.

Headed up by LV= director of broking, general insurance Phil Bunker, the project is known as iParc and aims to give brokers up-to-date prices on personal lines business. Initially focusing on the motor sector, iParc will be a hub allowing brokers to connect with insurers through their system providers. It will offer real-time pricing and connect to third-party databases, such as the DVLA.

At the moment it can take insurers about six weeks to change a product price available through e-trading software platforms.

Polaris sales and account manager Phil Nunn says: “At the moment we think we have a viable project. We know we have integrators - people who’ll connect to it like third-party data providers - and it’s really just a case of trying to pull the pieces together over the next few weeks.”

SSP is not involved with iParc. They have their own plans to set up real-time pricing with insurers.

SME inches online

While data enrichment is dominating the future of personal lines, in commercial lines, a push towards e-trading is underway to provide brokers with the tools to place more small and medium-sized (SME) business through e-trading software.

Software house Open GI was the last of the major e-trading platforms to integrate with i-market, and as brokers become increasingly aware of the opportunities in commercial, a move towards online facilities for commercial lines consumers looks likely to hit the SME market.

Nunn says: “What we’ll see is the broker encouraging consumers to come after some of the smaller products themselves. Small businesses are more technology-savvy, and they’re also always looking for a bargain. I think those things will drive their interest in what they may be able to purchase online in a commercial space.”

Aviva has made rapid progress in the SME space with their latest iPad technology. Their Fast Trade app, which launches this month, gives brokers access to quote-and-buy facilities when they’re out with clients in the field, providing full-cycle trading on a range of products with the relevant documentation.

The move is an innovative one from the insurer, and could precipitate a major step forward in commercial brokers’ quote-and-buy speeds should other insurers follow suit.

Records management revolution

Software house Acturis has unveiled new technology for examining business performance in the form of the company’s new ‘dashboard reporting tool’.

Aimed at giving broker management teams a bird’s eye view of their business, the technology takes the data that Acturis users upload on a daily basis, and presents it in a highly visual manner that allows managers to examine performance across a plethora of areas.

Managers can glean an understanding of relationships between colleagues within regional offices, or even between account executives and insurers, without examining labyrinthine raw-data records.

Data overload

Point-of-quote data checks have become increasingly common over the past year. Credit checking and claims history are now part of the arsenal available to underwriters, and this trend is set to boom as data providers are driven to exploit more data sources for their clients.

Lexis Nexis market development manager Allison Nau says: “In 2013, we are going to see both a larger volume and variety of data become available to insurers for use at point of quote.

“The main challenge of 2013 is not going to be accessing these data sources, but having the skills, capability and technological capacity to use them most effectively in order to outperform the competition.”

Technology news

TheHub launch
NIG has launched a new full-cycle e-trading platform called TheHub. The service offers quote, buy and renewal facilities to commercial brokers and replaces nignetwork.com. Products available on TheHub include residential landlords, commercial landlords, tradesman and professionals, with more products in the pipeline.

Claims portal
The planned extension to the Ministry of Justice’s road traffic accident claims portal may not be ready by the planned start date of 1 April 2013 owing to legal wrangles. The portal will extend into employers’ and public liability, and include road traffic accident claims up
to £25,000.

Black box
New telematics insurance provider Carrot Car Insurance is offering young drivers the chance to earn back up to 15% of their insurance premium through safer driving. In a similar scheme, InsureTheBox has launched a clever marketing play on the EU Gender Directive with a telematics-based reward system called ‘Drive Like A Girl’, where 17- to 25-year-olds can recoup up to 18% of their premiums through careful driving.

Whiplash bust
Thatcham, the accident and insurance specialist, is considering bringing telematics data to its whiplash verification software called Witkit. The addition of impact velocities and GPS information available through telematics data could significantly cut bogus whiplash claims.