At a glance
- Data allows brokers and insurers to evolve their ways of working, but accurate collection of this information is of paramount importance
- Inaccuracies in the data rapidly adding costs to the insurance industry
- Small pieces of information can make a big difference
Most industries would give their right arm for the kind of data brokers and insurers hold on their customers.
With brokers now harnessing the power of technology in the personal lines space by using the vast reams of data kept on customers to good effect – allowing for better customer acquisition and retention – it is of paramount importance that this data is also collected as accurately as possible.
This ensures customers receive the most accurate premiums and that nothing disrupts the customer journey post sale, particularly at the claim stage where non-disclosures inevitably cause delays and enquiries.
“If the data’s right when the policy information comes to us, there is no frictional cost to the relationship,” said Ian McManus, Head of Personal Lines Broker at Zurich. “But the responsibly for getting the information right sits with all parties, not just the broker.”
In reality, most inaccuracies are innocent or inadvertent, but insurers and brokers must work together to get the data right from the start to eradicate deliberate misrepresentation and fraud.
“It’s about simple checks, good quality data and collaboration between brokers and insurers so we provide the right price for the right customer,” said Alanda Reynolds, Head of Underwriting Fraud at Zurich.
As always, it is the simple things that will make the difference.
Risk validation in the broker channel
Last year, Zurich extended its risk validation processes into the broker channel following great success in its direct business. Zurich was keen to build upon and share its point of application expertise with brokers to reduce the amount of customer contact required for validation. Since the launch, Zurich has seen some surprising results.
What is clear from analysing Zurich’s activity to date is that there are failings on all sides. Certainly, customers make mistakes as do brokers and insurers, but the error rate is too high on some of the basics: 25% of those cases failing ID verification do so because the date of birth is incorrect
Ian McManus, Head of Personal Lines Broker at Zurich
“What is clear from analysing Zurich’s activity to date is that there are failings on all sides. Certainly, customers make mistakes as do brokers and insurers, but the error rate is too high on some of the basics: 25% of those cases failing ID verification do so because the date of birth is incorrect,” said Ian.
Risk validation in whichever form is rapidly adding cost to the insurance industry. So, the more that is fixed at the outset, the less that is needed to be fixed later on.
Zurich has produced practical tools to support brokers with policy validation including a ‘Tips to reduce validation and get accurate quotes’ BrokerBox insert and a dedicated policy validation website.
Thus, brokers and insurers all agree that it is vital to get customer data right.
“Policy validation should not drive a wedge between the broker and insurer, but strengthen relations,” added Ian.