Home insurance prefill solution eases application process and helps customers
New home insurance prefill solution eases application process and helps customers
Home insurance providers rely on customers providing a high level of detail at point of contact so that they can understand the risk and calculate the level of premium for buildings and contents insurance. This covers the structure of the home, its proximity to risks such as trees and water, the type of security measures in place, along with a whole host of information concerning the value of their possessions.
This high level of detail has necessitated a high volume of questions. The 36% of consumers who buy their home insurance via a price comparison website typically face 70 questions when they want to apply for a new building and contents home insurance policy. If they apply direct to a home insurer, the question set tends to be less – around 30 questions – but still a time-consuming process.
But the time it takes is not the real issue. If a proportion of those 70 questions could be answered easily with 100% accuracy, this could result in converting some of the 28% of household without contents cover. The type of detail requested can prove to be a point of frustration and confusion for the customer. For example, in relation to buildings cover, how do you accurately calculate how much of the roof is flat? How would you know the way the building was constructed if you have not owned it from new – or when it was built?
This can lead to assumptions, estimates and guesses during the application, as well as create feelings of uncertainty and mistrust. One insurer has likened the experience to an interrogation in a recent TV ad campaign.
From the insurance provider’s point of view, if the information provided is inaccurate they may miss vital parts of the picture, leaving customers at risk of underinsurance. This is usually discovered at the worst possible time for the customer – at the point they try to make a claim, and the impact this can have on the sector’s reputation does not need to be spelt out.
In LexisNexis Risk Solutions research, 16% of home insurance customers said they struggle to accurately answer certain questions in the application, such as the year the property was built or the rebuild cost of their home. In addition, 16% felt the insurer should already know some of the questions asked. It’s a poor customer experience from the start but also means that home insurance providers spend a great deal of time (and money) on data entry and follow-up calls to validate information. Perhaps not surprisingly, 85% of consumers in our study said they felt that reducing the number of questions would make the application experience easier.
So, improving home insurance applications has been a key focus for the industry. But as the systems for applications and quotations have advanced and become in some instances almost wholly digitised, the door has opened for data prefill at point of contact. Automatically filling in key pieces of data for the customer about their property, pulling from external datasets in a fully compliant manner, is supporting a quicker, smoother, more accurate process for home insurance customers and providers.
Prefilling to simplify and improve applications
Much of the data needed for pricing, risk assessment and underwriting is already stored in the insurance ecosystem or in other datasets. Prefill is about using this data to improve the application process.
Using property attributes like bathrooms, bedrooms and year built can reduce the number of questions by up to 15%[iv] once the personal and address details have been confirmed. The insurance provider can then just ask the applicant to confirm if anything has changed.
Enhancing the data validation process with the addition of this information can also reduce deliberate or accidental mistakes at application stage – highlighting potential fraud and protecting innocent applicants from underinsurance.
Going into the future, building data, environmental data, previous insurance policy information and claims can come together to prefill part of the application on behalf of the consumer applicant, saving time, improving the customer journey and reducing the number of applicants who drop out. Prefilling this information also helps ensure the data is correct and the insurance offered reflects the risk.
The prefilled future
Home insurance should reassure homeowners that they are protected, not create a cause for anxiety. The challenge is to deliver a seamless digital application process which reduces the onus on the customer to provide detailed information they may find difficult to confirm.
In our study, 95% of consumers told us they are happy for their property information to be used in prefilling the application form, and 88% and 61% are happy for past claims data and personal credit scores to be used, respectively. With consumer appetite high, and quality validated information available, it is time for home insurance applications to become streamlined and leverage the benefits of data prefill.
Jay Borkakoti is director of home insurance, UK at LexisNexis Risk Solutions
The Chartered Insurance Institute (CII), the leading professional body for the global financial services profession, exists to promote higher standards of integrity, technical competence and business capability. With over 115,000 members in more than 150 countries, the CII is the world's largest professional body dedicated to insurance and financial services.
Our membership covers all disciplines within the insurance industry (claims, broking, underwriting), those working in the life and pensions sector, the mortgage advice market and financial advisers (under the Personal Finance Society brand).
Our Royal Charter requires us "to secure and justify the confidence of the public" in our members and in the insurance and financial services sector.
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