TransUnion shares three trends in life, personal and business insurance in 2022
To provide insurers with a better understanding of these key trends,
“Our analysis of last year’s trends as well as the results of the consumer survey suggest that the insurance industry has some key challenges ahead,” said
Consumers are increasingly looking for a digital experience
The largest group of survey respondents were consumers of life and personal life insurance and auto insurance. One of the most important findings of this group was that they preferred digital channels, like email and mobile apps, to request a quote, ask a question, or discuss a policy.
The combined averages of those who prefer email (29%) and those who prefer an insurer’s mobile app or website (23%) show that more than half (52%) prefer a digital channel. In addition, the average percentage of consumers who indicated an insurer’s mobile app or web portal as their preferred communication channel was a 28% increase from last year’s survey.
The increased use of online channels will have several implications in the industry. For example, insurers will need to create transparent and secure digital experiences for consumers at every stage of the policy lifecycle. Many operators will also need to re-evaluate their channel mix and decide whether to adjust their sales strategy to better utilize direct-to-consumer websites and apps that help bridge the gap between consumers and agents.
Compared to the rate of adoption of these technologies by consumers, the digital transformation of commercial insurance is lagging behind. However, this area appears to be in the early stages of climbing the same steep curve.
“One opportunity for digitization in business lines is to take advantage of underutilized third-party data that can automatically populate much of the company’s real estate or vehicle information that customers are supposed to enter manually on an app.” , McElroy said. “The current manual process also forces insurers to verify this information, making automation a win for both parties. “
Further digitization depends on demonstrating fairness
The continued transition to digitized and accelerated underwriting is largely due to access to credit-based insurance ratings (CBIS) and other third-party data. However, in recent years, the use of CBIS in the insurance underwriting process has come under intense scrutiny by some consumer groups and regulators. It will be necessary to prove that practice has expanded the availability of insurance in many cases and often benefits consumers in all risk segments to demonstrate that CBIS is an essential part of the overall insurance underwriting process.
For example, the report explains that the increased use of expedited, data-driven underwriting has often reduced prices for customers with good risk scores who would otherwise have been unfairly disadvantaged by being renters rather than owners.
In the commercial home insurance industry, aggregate credit-based tenant scoring can lower insurance rates paid by homeowners, who might otherwise have their policy priced solely based on location and age. of a building. These savings, in turn, can allow landlords to lower rents, potentially creating more affordable housing for consumers.
Telematics proves popular with auto insurance consumers
This year’s consumer survey also found that 32% of those polled said they had received a telematics option for their auto insurance policy. These programs can use connected devices, cell phones or automotive apps from automakers to monitor and report detailed driving behavior, and 49% said they chose the program.
Insurance rates fell for almost half (48%) of those registered for a telematics program, while remaining the same for 30%. Overall, almost two-thirds of consumers (64%) were “very satisfied” or “extremely satisfied” with their telematics experience, and 26% were “neutral”. In line with the satisfaction ratings, 64% said they still use their telematics program.
Likewise, business insurance presents a significant opportunity for telematics, as many business owners may be more open to installing such tools in business vehicles to encourage employees to drive smarter. safe.
However, homeowners seemed less open to using smart devices to monitor their home or condo for fires, floods, and other hazards. When asked if they would allow an insurer to install and monitor such a device in their home, only 33% of respondents said they would, while 26% were undecided.
“The reluctance of consumers to adopt connected devices for cars and homes was an interesting discovery,” said McElroy. “I suspect this was driven by concerns about privacy, which means insurers will have to convince consumers that telematics is all about monitoring driving behaviors and the condition of home appliances, like water heaters and heaters. ovens, to ensure the safety of people, and not the collection of their personal information. “
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