Taking stock of UX in personal lines insurance

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At our 12th annual Novarica Research Council Meeting, we met with a handful of technology VPs and CIOs in the industry to discuss products and technology in personal lines.

Claims Fraud Detection
Participants in this special interest group of personal lines insurers began the discussion with how technology was improving claims fraud detection. Predictive modeling and third-party data are helping carriers identify potentially fraudulent claims. By cross-referencing statements, claims notes, and other data points, carriers can find inconsistencies along the entire claims process including distribution channel abnormalities, inconsistencies in statements, and lawyers or chiropractors that pop up consistently. AI is also beginning to be seen in claims use cases. One CIO brought up implementations that are using AI to measure the stress level of a policyholder’s voice when they call in to report a claim.

Homeowner Product Trends
As with other lines of business, insurers are working to improve the policyholder’s experience. Packaging coverages to create more options, simplifying applications, and offering video chat during the claims process are just a few examples of this. One CIO brought up the topic of carriers like Geico and Progressive using their sophisticated distribution channels to sell homeowners insurance manufactured by other carriers. This just means the bar for policyholder experience is being set much higher in the homeowner’s space.

The conversation also touched on changes in product offerings. Carriers are beginning to incorporate bi-peril rating capabilities and data insights from third party sources and IoT devices in their product lines. The discussion on IoT was particularly interesting. It centered on best practices for influencing policyholder implementation. Lessons learned from telematics adoption in personal auto were also examined. Many carriers offer discounts and try other tactics to encourage people to act better. The best approach may involve partnering with companies that sell security or utilities that promote devices for environmental or cost savings. In either situation, insurance is the secondary thought when plugging in a flow meter and maybe that’s what will work best.

Auto Product Trends
For both nonstandard and standard auto, carriers are working towards more detailed price points and are beginning to leverage AI and external data when pricing risk, predicting loss, and detecting fraud. While there are obvious differences between nonstandard and standard auto, such as nonstandard auto struggling to create the product stickiness that exist between standard auto and homeowner’s insurance, there are noticeable similarities in the trends of both lines of business. The need for data is one of them. Concerns and implications of driverless cars on private passenger auto coverages was discussed. With loss costs potentially going down due to smarter vehicles, carriers are looking to add additional coverages, services, and automation in order to offset the potential loss in revenue and enhance customer experience.

For more information on trends in personal lines, see our recent report on Business and Technology Trends: Personal Lines. For more about our research and advisory services for personal lines insurers, please contact us at inquiry@novarica.com.

This blog entry has been reprinted with permission from Novarica.

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