How can improved data access enhance insurance experiences for consumers

Partnering with companies in all industries can give insurance firms more in-depth data which will help to enhance customer experiences, according to Milan Sud, head of Innovation at AXA Partners UK.

The financial market’s shift towards a more partnership-filled model is a little of a surprise, given that previously the traditional institutions preferred a go-it-alone approach. As technology has created mountains of data around consumers, behaviours, markets and much more, companies are seeing a host of opportunities available through a more collaborative world. Recent regulations like PSD2 and GDPR have helped to nurture and protect the increased usage of interchanging data. However, this is just one side of the coin. On the reverse, consumers are still relatively unaware of the prospects available to them if they are willing to let go of some of their information.

Changing this simply comes from reassessing how firms look at data. Sud believes it all boils down to the fact that ‘data exchange is fundamentally a value exchange.’ Proving this to the consumer will not only revolutionise insurance, but the whole of financial services, and permit more personalised experiences. An example Sud gave was when a consumer gives over some personal information, like an email address, to login into a public wi-fi. There is an obvious benefit to the user if they provide this information, and it’s about offering the same clarity when it comes to offering financial data.

Sud said, “If organisations can genuinely prove that they are offering value to the customer, then I do believe the customers will be more receptive to sharing the data. There will always be a population of people who are less open to sharing their data with organisations, and things like the GDPR regulations which might make it more difficult. I do truly believe that if you can prove that your either adding value to your customer’s life, through pushing them to the right services at the right time and make their lives easier, then customers are far more willing to engage with you as an organisation.”

By opening up the use of data, insurers will be able to keep up with the customer’s rising preference of getting everything in real-time. On-demand services, like uber, have begun popping up around the world, but they are typically under-used by older generations or those living in less urban locations. This is a similar theme with other forms on-demand services. Naturally, on-demand insurance is also beginning to take more form, with InsurTechs and insurers alike beginning to make their plays in the field. AXA has been one of those at the forefront of the space, having formed a partnership back in 2016 to underwrite on-demand insurance policies for Trov. Through Trov, consumers are able to turn on/off protection for a variety of their products ranging from electronics to bikes.

Combining on-demand insurance policies with increased access to data can help insurance firms take a more personalised and proactive mentality to covering their customers. Instead of a customer taking out an insurance policy for a long-weekend trip, the insurance firm may access location of their customer and realise they did not take out cover. They can then simply inform the customer of a short coverage which can be activated through a simple click of a button, instead of heaps of paperwork.

He added, “Fundamentally, it creates a huge opportunity for organisations to be more engaged with our customer base, but it really relies on a cross sector collaboration approach. So, we recognize that organisations outside of the insurance sector may well be the data owners. Whether that’s original equipment manufacturers in the mobility space, and the car space or telecommunications providers in the mobile space, they know a lot of information about where a customer is and what they’re up to and now therefore we can make sure that they’re covered in the right way.”

While there is a huge field of potential opportunities spanning all types of industries, insurance firms need to understand what customers are actually looking for. Developing a new and improved insurance integration for areas such as water damage could be a great idea, but unless this is something consumers are actively seeking or thinking about, customers may not acknowledge the full benefits it would give them.

Sud said, “Sometimes organisations are not customer-centric enough, and they look at the problem from their own hilltop. For example, if we look at the connected home space in the insurance market. A couple of years ago, many large insurers were looking at how to solve the problem of water leaks, stopping leaks from coming in people’s homes. It was the natural place to start because it’s the biggest cost to us as insurers, but actually we spoke to customers and unless they’ve had a leak, they don’t believe it’s going to happen to them. And even when they do, they state that’s what home insurance is there for.”

Instead, AXA is looking towards what the ‘real problems’ are which customers want to be solved, rather than innovating and trying to find a problem. Sud described a potential area people are concerned is their home security. Maybe they want to install cameras so they can check in on their home while they’re on holiday and are concerned about someone breaking in. Or, they could just want to be able to check their children got home from school safe or the dogs aren’t ruining the furniture. These are areas where improved data and more collaborations can really help the customers.

AXA partners is seizing these new types of value-add services to help enrich the customer’s experiences. Recently, the firm launched a service with one of its big clients for a MOT service. A gap in the market which AXA noticed was that there are a large proportion of drivers in the UK which do not have a valid MOT, which means they are not insured. This is not necessarily down to consumers trying to avoid getting one or misinforming an insurance company, it could simply be down to people forgetting a renewal is even due. By leveraging publicly available data, the firm is able to see when its customers MOT is expiring or if it has already expired, and proactively inform the consumer. Working with garages, AXA can help to arrange the car is picked up, serviced, and then dropped back off, providing consumers with new on-demand, convenient services which were previously not available with less data.

Sud added, “The sharing of data, open banking and transactional data holds huge value across a whole variety of sectors because regardless of whatever space you’re in people are still spending money. How the banks go about making that customer friendly, and it doesn’t end up becoming a nuisance to customers I think is going to be the most important thing.

“Opportunities are there for banks who do it well and are partnering with organizations who really offer paid services relevant to the client, versus those who are a bit scattered and don’t quite know what to do with data. If you talk about that handling of data, when it comes to transactional data, the variety, the velocity, the veracity of all of that data is a huge amount of data to handle, but if they can get it right the opportunities are absolutely massive.”

Changing customer perceptions

There are obvious risks associated with the proper use of data, Sud explained. The key one is ensuring that institutions are protecting the data and are not misusing it in any way. GDPR, which was deployed almost a year ago, has set up safeguards for consumers and their personal data. It’s still in the transitional period, with regulators handing out select fines, but as the years pass, regulators will become stricter with the enforcement. Furthering this, the second challenge is legacy systems making it hard to even collate all of this information from the isolated systems and infrastructures.

Sud added, “The third challenge is customer perceptions on the use of data. Things like being hounded for PPI claims or cold calls from legal companies claiming that you had crash, has negatively affected the ability of organisations to market to their customer base. Customers now just have a perception that organisations are a nuisance marketing them or recommending products not relevant to them. Cutting through that is going to be really important in proving that you are using the data to offer the customers the right product or the right service at the right time and not spamming them, but it is going to be difficult.”

AXA Partners is establishing itself as the innovation centre of excellence for the global organisation. The division was formed through the merger of AXA Creditor and Lifestyle Protection with AXA Assistance. It is responsible for the co-creation of offers and distribution agreements when AXA insures or delivers a service for private individuals and SMEs through a partner. Its role involves designing, implementing and managing partnerships, and supporting AXA entities with developing local partnerships. The group has been working to create an ecosystem which fosters collaboration with other insurers or even organisations outside of the insurance sector.

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