Skip directly to search

Skip directly to content

 

The 3 Big Ps in Modern Insurance: Personalisation, Prediction and Prevention

 
 

Insights Through Data | Jay Chitnis |
19 January 2022

Society’s obsession with owning more and more possessions has dramatically increased over the last 5 years. For example, in 2020 13,000 more people in the UK owned a car compared to 2015, and almost 15,000 more people owned 2 cars within the same period. Increased ownership has inevitably led to a greater reliance on insurance and created a schism between insurers and their customers, with the latter often viewing the purchase of a policy as a ‘necessary evil’. This in turn has translated into a rather mechanical digital experience for customers, where the “personal” aspect of personal lines insurance has been replaced by a factory style with mass-produced policies. This experience is lacking the sophistication and innovation customers have come to expect from other industries, such as healthcare and retail.

The insurance companies that are succeeding are those who are evolving their digital operations to accommodate more than just the ‘premiums for protections’ mentality and who use data-driven experiences to personalise, predict and prevent. There is such potential for carriers to promote their products as more than just ‘grudge purchases’ if they harness the power and possibility of existing architecture as well as borrow innovative enhancements from other industries. The insurance industry should challenge itself – and be challenged! – to offer a ‘policy+’ experience for the benefit of its customers and the industry as a whole.

In 2019, the German Insurance Association (GDV) stated that on average around 80% of insurance products were still sold offline. Inevitably, this figure will have changed since then, with the effects of a global pandemic changing customers’ expectations of digital interactions regarding simplicity, convenience and efficiency. This pressure to meet customer expectations, similarly to the experiences in other industries, has dictated a more automated service offering.

But does automation always mean success? Of course, automation helps realise changes to cost structures and, one hopes, offer competitive pricing, but it still produces a one-dimensional vision of Insurance. In order to truly satisfy contemporary customers’ expectations, insurance companies should also consider the following aspects when developing their products.

PERSONALISATION

The insurance industry that we all know (and love!) can be difficult to get excited about, with its complex series of wordings and clauses leaving many perplexed or mistrusting about what they are actually purchasing. By personalising that experience for a customer, an insurer can enable a simpler interaction, removing the ‘gotcha’ aspect of policy wordings and aim to provide a more relevant experience for insurance customers.

Like in any other industry, the mantra that should dictate the development of any digital system should be giving the customer what they want when they want it – within reason. After all, they are paying for it! Amazon had this vision when introducing the one-click buy approach, and, similarly, Apple Pay gave customers the ability to complete a transaction in the simplest way possible. Utilising similar strategies and concentrating on customer-centricity, it is absolutely feasible for insurers to employ the same techniques for their product offering.

One strategic way to approach this is to take advantage of the homogenised nature of insurance products, combined with the ingenuity of data-driven AI (artificial intelligence) and machine learning capabilities. A well thought-out and constructed insurance engine can exploit the vast amounts of data known about the customer to analyse and evaluate each individual customer’s needs.

Personalisation measures can feed into more appropriate cover terms or recommendations, fuel more intuitive chatbots, prevent potentially fraudulent behaviour, limit the danger of mis-selling or help prioritise agents for more vulnerable customers.

PREDICTION

Travel insurers have been forced to re-think and re-purpose their infrastructure to cater for a post-COVID society where the value of an insurance policy is seen in its ability to react as or even before something happens. Many ‘digitally native’ travel insurers retained or won customers during this period by directly reacting to incidents and offering things like food vouchers in their inbox as soon as a flight was delayed or automatically booking hotel rooms or alternative journeys when restrictions changed travel plans. They delivered great benefits to customers by utilising relatively simple integrations with open-source data points like flight timetables and booking sites.

Even specialised insurers within the Lloyd’s market have realised that predictive analytics helps reduce issues and underwriting expenses, with 3 out of 5 reporting that the data has increased sales and profitability.

Predictive analytics has been table stakes for many years to help insurers with pricing and risk selection. However, what has changed is the variety of data made available by the wealth of new technology. In highly developed countries, IOT-enabled (Internet of Things) devices are now as prevalent as mobile phones, with insurers already harnessing this data to keep customers safer and their pricing algorithms more accurate.

Considering that in 2020 individuals created 1.7MB of data every second, the wealth of data will only increase, and successful insurers will be the ones who can effectively use this data to feed their predictive analytic tools.

PREVENTION

Helping to prevent losses and therefore potential claims makes business sense, but with recent events, it became less about the business implications of data-led prevention and more about the humanitarian consequences of such innovation.

The wildfires that devastated Australia over the past 3 years resulted in tragic loss of life, property and livelihoods and underlined the importance of insurance as well as the carriers’ responsibility to do what they can to prevent such losses. In California, insurance carriers reacted to their local wildfire risk by funding and organising teams to clear forest areas and in some circumstances spray policyholders’ homes with flame-retardant foam.

From a digital perspective, ever-more intelligent AI solutions will allow insurers to better predict such disasters and to actively lead and influence preventative measures, demonstrating their responsible and human side.

INSURANCE BECOMES TRULY PERSONAL

For insurers, the most important aspect of any digital product within the rapidly changing environment will be its flexibility to react and adapt, enabling the carriers to continue to offer products that provide protection while remaining an efficient business operation. Even more prevalent will be the social responsibility insurers have to share anonymised data as well as their expertise to offer predictive analytics and shift the traditional focus on protection more towards prevention.

At Endava, we are continuously challenging each other to be the best we can be, and this challenge extends to our customers who we work with to build and evolve digital solutions that can withstand in an ever-changing world. Technology is infinite and can be very exciting, therefore so should be our digital solutions.

Jay Chitnis

Industry Consultant

Jay has been working with Endava for almost 7 years and considers himself a bit of a “Swiss Army knife” within the organisation. Despite his experience and focus being within the Insurance space, both the London market and General Insurance, Jay still has a love for rolling up his sleeves and getting involved with delivery. He currently concentrates on scoping and sculpting delivery strategies, often being the glue that holds it all together. Jay very much works to live and is a keen triathlete, and him completing several endurance events in a year is not uncommon.

 

Related Articles

  • 06 April 2022

    ESG Data Architecture is a Business Imperative – How to Get Started

  • 19 January 2022

    The 3 Big Ps in Modern Insurance: Personalisation, Prediction and Prevention

  • 02 November 2021

    Leveraging ESG Data to Grow Your Business

  • 28 September 2021

    Data-Driven Insurance

  • 04 June 2019

    Insight as an Accelerant to Change

 

From This Author

  • 03 December 2021

    Evolving Digital Self-Service in Insurance

Most Popular Articles

Current Challenges in the Transportation & Logistics Industry
 

Transportation & Logistics Insights | Brian Estep | 22 March 2022

Current Challenges in the Transportation & Logistics Industry

AI Art in Game Production – an XDS 2022 Table Discussion
 

AI | Thomas Bedenk | 27 September 2022

AI Art in Game Production – an XDS 2022 Table Discussion

Payments Data Monetisation is Key to Driving Sustainable Growth
 

Payments | Annmarie Mahabir | 20 September 2022

Payments Data Monetisation is Key to Driving Sustainable Growth

4 Buy Now Pay Later Trends Set to Disrupt the Industry
 

Payments | Annmarie Mahabir | 22 February 2022

4 Buy Now Pay Later Trends Set to Disrupt the Industry

Buy or Build? A Game-Changing Question in Insurance
 

Next Gen Insights | Robert Anderson | 12 January 2022

Buy or Build? A Game-Changing Question in Insurance

The New Ways of Issuing Cards
 

Payments | Peter Theunis | 19 July 2022

The New Ways of Issuing Cards

The Metaverse Evolution and Learning from the Games Industry
 

Next Gen Insights | Thomas Bedenk | 30 March 2022

The Metaverse Evolution and Learning from the Games Industry

Top Challenges in Warehouse and Distribution Centers
 

Transportation & Logistics Insights | Brian Estep | 01 March 2022

Top Challenges in Warehouse and Distribution Centers

Buy Now Pay Later: Will Regulation Burst the Bubble?
 

Payments | Annmarie Mahabir | 01 February 2022

Buy Now Pay Later: Will Regulation Burst the Bubble?

 

Archive

  • 27 September 2022

    AI Art in Game Production – an XDS 2022 Table Discussion

  • 20 September 2022

    Payments Data Monetisation is Key to Driving Sustainable Growth

  • 13 September 2022

    Navigating the Healthcare Ecosystem

  • 30 August 2022

    hey y’all! I’m Ashley Grant

  • 23 August 2022

    5 Ways to Fix Your Data Spine in Banking

  • 16 August 2022

    De-risking Digitalisation

  • 09 August 2022

    hi, I’m Brian Estep

  • 02 August 2022

    hey! I’m Lia Rollman

  • 19 July 2022

    The New Ways of Issuing Cards

  • 12 July 2022

    Scores on the Door: Rating Autonomous Vehicles

  • 06 July 2022

    Data-Driven Impact: Don’t Settle for Less

  • 06 July 2022

    We’re in Nottingham – a Q&A on Endava’s New Delivery Centre in the UK

  • 05 July 2022

    hey, I’m Chris Hart

  • 28 June 2022

    Platforms: a Blessing or a Curse?

  • 23 June 2022

    A Payments View on Marketplaces – How to Be(come) Successful

  • 21 June 2022

    Intelligent Commercial Underwriting

  • 14 June 2022

    The Future of Supply Chain: What’s Next?

  • 31 May 2022

    The Future of Autonomous Vehicles in T&L

  • 26 May 2022

    hello! I’m Hannah McCarthy

  • 24 May 2022

    Going Native: Why Cloud-Native Services are Essential

  • 19 May 2022

    How to Tackle Legacy – Breaking Down Walls Between Change and Run

  • 17 May 2022

    Advantages of a Yard Management System

  • 12 May 2022

    Are Phones About to Become the New POS Terminals?

  • 10 May 2022

    The Digital Economy is an Upgrade of Smart Cities and Communities

  • 05 May 2022

    hello! I’m Sumita Davé

  • 03 May 2022

    Physical Automation in the T&L Industry

  • 28 April 2022

    zdravo! I’m Andrej Kotar

  • 26 April 2022

    Open Banking in the US

  • 20 April 2022

    hello! I’m Paul Maguire

  • 19 April 2022

    Digital Automation in the T&L Industry

  • 12 April 2022

    How Do Banks Embrace Embedded Finance – Have the Fintechs Already Won?

  • 06 April 2022

    ESG Data Architecture is a Business Imperative – How to Get Started

  • 05 April 2022

    hi! I am Roy Murphy

  • 05 April 2022

    Modernizing the Shipping and Cargo Process

  • 30 March 2022

    The Metaverse Evolution and Learning from the Games Industry

  • 29 March 2022

    Do Androids Dream of Trading Electric Sheep for Digital Wood? An Introduction to Automated Game Design

  • 23 March 2022

    Real-Time Payments in Australia – Why Corporates Should Get on Board

  • 22 March 2022

    Current Challenges in the Transportation & Logistics Industry

  • 16 March 2022

    bok! I’m Sanja Cvetkovic

  • 15 March 2022

    Rapidly Transforming: Healthtech Trends in 2022

  • 08 March 2022

    How to Digitize Warehouses and Distribution Centers

  • 01 March 2022

    Top Challenges in Warehouse and Distribution Centers

  • 28 February 2022

    Tackling CIB Legacy at its Core

  • 23 February 2022

    salut! I am Isabela Buhai

  • 22 February 2022

    4 Buy Now Pay Later Trends Set to Disrupt the Industry

  • 15 February 2022

    salut! I’m Natalia Ciobanu

  • 14 February 2022

    Product-Led Innovation – a Q&A with Joe Dunleavy

  • 01 February 2022

    Buy Now Pay Later: Will Regulation Burst the Bubble?

  • 31 January 2022

    Innovation Will Spur Ireland’s Race to the Top

  • 28 January 2022

    The Value of Digital and Automation in the Product Returns Process

  • 26 January 2022

    Virtually Disrupted? Keeping Pace with Accelerating Customer Expectations

  • 19 January 2022

    The 3 Big Ps in Modern Insurance: Personalisation, Prediction and Prevention

  • 18 January 2022

    An Introduction to Mobility as a Service in the US

  • 12 January 2022

    Buy or Build? A Game-Changing Question in Insurance

  • 12 January 2022

    hello! I’m Paul Willoughby

  • 11 January 2022

    Payment Service Providers 2.0

  • $name

We are listening

How would you rate your experience with Endava so far?

We would appreciate talking to you about your feedback. Could you share with us your contact details?