Wooing the customer to provide data that is valuable to all parties
Hogan Lovells partner John Salmon presented the leadership briefing for the second session of this week’s InsurTech Rising event in London.
Introducing Competing for a place in the connected word – gaining the edge with the Internet of things, he told delegates insurers had been interested in IoT for a number of years but were only now starting to see a sharp growth in that interest.
IoT can help marketing, underwriting pricing, claims, automated processing and customer services. “It’s about being very clear with customers what data you are using and the reason behind your pricing, providing them with the transparency they need,” he said.
Reflecting the point about data protection raised in the morning session by MetLife distribution and digital director Francoise Lamotte, Salmon said: “Transparency to customers is going to be very important. It is also important to get our head around automated processing, because people can challenge it. All of this is completely doable, but you need to be clear what you tell the customer.
Salmon then opened up the panel of five insurers by asking what they see a customer wanting from IoT. Ageas director of planning and strategy Matthew Thomas said that through the use of behavioural monitoring technology devices, giving data to customers had been enlightening. “We’ve seen real changes in opportunity from that insight.”
RAC managing director Telematics Nick Walker said if you ask any customer whether they would like box in their vehicle to monitor their car and their driving the answer would be a resolute no. But he said: “When those customers that take it do have it they change their behaviour. For example, the technology can tell you when you are about to break down. Data privacy is king, but if you can show the benefits for the customer all of a sudden they will take it.”
More Th>n head of innovation Steve Jay said a partnership approach I helpful in this regard. “That is where InsurTech partners will help,” he stressed.
Vitality global business development lead Andrew Scott said: “From a behavioural perspective, If we can change customers’ behaviour - for example persuading them to give up smoking - then there is a benefit in it for us all: the policyholder, the insurer and society at large.”
Ageas’ Thomas said the use of IoT technology was very effective but one of the challenges has been using the data gained to tackle fraud. “The risk is we are missing customers who cannot get access to use the technology we provide,” he said.
Scott suggested: “If technology is used in a way that is fundamental to how it is offered to the customer then the less incidental and, crucially, the more valuable it will be to the customer. Old risk assessment methods are becoming outdated and now technology is a catalyst to new business.”
The session ended with a discussion relating to a question from the audience concerning to use of IoT to focus on commercial as opposed to general lines of insurance risk. The panel concluded that while there is still a huge challenge to understand the eco-systems that need to be engaged with, businesses tend to be much less emotional in regard to IoT and behaviour monitoring, and they also tend to see the business benefits.