Archive

For November, 2011

Nov 28

50,000th Insured Saves ‘Crate-Loads’ of Money with Telematics Policy in UK

By Insurance-Canada.ca BlogEditorNo Comments

Pay-As-You-Drive pioneer, UK motor insurer insurethebox, hit a milestone recently, selling its 50,000th telematics-based policy in just 16 months.  The insurer has plans to double this total during 2012.

According to an article in the online automobile news source, Honest John, Elizabeth Ngulube from Stockport, Greater Manchester purchased the policy.  Elizabeth says that she is saving “crate-loads of money”.  The insurerthebox quote was £2,000 cheaper than other quotes she obtained.

The ‘policy’ has interesting wrinkles (at least to the Canadian eye).  According to the Honest John article:

Policyholders buy an initial 6,000 miles of cover.

A ClearBox, installed behind the dashboard, monitors their driving.

Data sent via satellite assesses their performance by five different criteria.

Good drivers receive up to 100 bonus miles per month.

Each policyholder has their own portal where they can check how well they have driven and how many extra miles they have earned.

According to Mark Grant, business development director at insurethebox, pioneering a new insurance scheme was an ‘act of faith.’  However the results have been gratifying.  “We expect to reach 100,000 sales during 2012,” Grant said.

According to Honest John, savings to the insureds using telemeatics-based policies extend beyond the first period.  The article states,  “around 60% of insurethebox customers receive discounts on renewal at a time when motor insurance prices generally have risen by 30%.”

Note: The 2012 Insurance-Canada.ca Technology Conference will feature a panel presentation on 2012 Insurance-Canada.ca Technology ConferenceUsage-Based Insurance using Telematics.  Stay tuned for details.

 

 

Nov 25

DIY Claims: Tools and Analytics Support Innovation

By Insurance-Canada.ca BlogEditorNo Comments

From home improvements to financial transactions, ‘Do-It-Yourself’ has become a trend for consumers.  A recent article by a noted industry consultant suggests the DIY philosophy might well be carried forward to claims handling, with benefits to all concerned.  Like other DIY projects, the right tools, and skills, are keys to success.

Christopher Tidball, who authored “Re:Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary To Extraordinary”, wrote recently in Property Casualty 360: “Just as we shop, fly and communicate virtually, so too can we adjudicate claims. While not every claim will meet the model, many claims will; which in turn enables insurers to redeploy staff to more complex situations.”

Tidball gives the example of an automobile insurance claim where the insured contacts the insurer who applys criteria, and then determines that the  claims can be handled by the insured without adjuster intervention.  The insured takes the car to a repair shop which works directly with the insurer to effect the repairs and service the customer.

The process benefits all. The insured doesn’t have to wait for an adjuster, and feels empowered.  The insurer doesn’t have to incur additional expense, and can focus efforts on more complex claims.  The insurer also sees increased loyalty from the empowered customer.  According to Tidball, “Carriers currently using this process are seeing dramatic improvements in across the board metrics.”

So what is the stumbling block to wide implementation?  Put simply, carriers need the right technology to manage the communications with the insured and the repair shops (and detect/prevent abuses and fraud).  More significantly, the carrier needs modern back office technology to support the communications in real time and  to help determine which claims are amenable to the self service model.  That requires both processing and analytic tools.

We continue to see movement to modern core technologies, including claims administration systems.  However analytics seems to be less mature, both from an implementation and corporate positioning perspective.  While not focusing on insurance specifically, a recent report from Deloitte, entitled ‘Real Anlaytics’ articulates the issue well:

While getting the right answers is critical, many organizations don’t normally know the right questions to ask to get there. Powerful new tools and supporting infrastructure have removed most technical constraints, but analytics initiatives continue to suffer from the lack of a clear vision and commitment to embed analytics-based approaches into how work is performed. Real analytics can add knowledge, fact-based predictions and business prescriptions – but only if applied to the right problems and only if the resulting insight is pushed into action.

There’s an old saying that goes:  ‘When the only tool you have is a hammer, lots of things look like nails.’ Unfortunately, performing surgery with a hammer doesn’t do much to improve claims ratios.

Nov 21

Rapid Adoption and Evolution Continue as Hallmarks of Mobile in Insurance

By Insurance-Canada.ca BlogEditorNo Comments

Implementers are advising that mobile technology continues demonstrate two characteristics:  First, its use is growing rapidly among business users, and second,  the raw technology and the applications continue to evolve with equal speed.  The message to insurance IT professionals:  Stay flexible and nimble.

An informal survey of conference attendees,  conducted by FirstBest Systems, Inc., and reported in Property Casualty 360, found that half of the carrier/MGU respondents already had a tablet device (usually an iPad) and virtually all respondents had a smartphone (some more than one).

In terms of preferences, 46% of the survey respondents indicated that while away from the office, the tablet was the preferred device, versus 23% who preferred a laptop.

Use of mobile devices was both proactive and defensive.  Of the 85% who indicated they would benefit from mobile access, 75% felt that mobile devices would allow them to provide better and faster service to customers, and 87% indicated it would allow them to take care of work that would cause a build up on return to the office.

While mobile continues to penetrate, it is also evolving, and evolving rapidly. As reported in Insurance & Technology, Michael B. Yetter, director of eBusiness Development, Independence Blue Cross (IBC), speaking in the session “Mobile Game Changers,” at the 13th Annual Insurance & Technology Executive Summit advised: “You can’t just deploy your mobile platform and say, OK, we’re mobile, now we’re done.”

Yetter’s organization has developed mobile portal applications for its members (customers) to find doctors, verify referrals, compare prices of drugs, track spending accounts, view health history and apply for a temporary ID card.  But this is only the beginning.  Yetter sees applications which will involve ‘gamification’, which Yetter indicated was the application of game theory to products.  “It embodies several concepts, including the idea that it’s a process, not just a product” Yetter said.

In regards to the competition among mobile devices and platforms, Yetter didn’t see a single standard arriving any time soon, and advised IT colleagues: “You’ll have to develop [applications] based on customer need, and meet the platform where the customer happens to be”.

I guess we’ll have to use mobile location applications to find out where the customer happens to be.

Nov 18

Putting Agency Connectivity to Work: Best Practices and Implementation Strategies

By Insurance-Canada.ca BlogEditorNo Comments

Sometimes it seems that most of  the attention given to agency/broker connectivity focuses on what is the ‘perfect’ connectivity method and when (or whether) it will happen.  The reality is that industry standard interface is happening now and some agents/brokers and carriers are seeing real benefits by using it to improve workflow and customer service.  A recently released report by a group of such practitioners in the US provides solid advice to those interested in taking advantage of the possible while waiting for the perfect.

The report “Agency Real‐Time ‘Best Practice’ Workflows And Implementation Strategies”, was produced by the Agency Real‐Time Experience Work Group under the auspices of the Realtime/Download Campaign, a federation of independent agents, carriers and industry bodies in the US.  The report can be accessed through the Independent Insurance Agents and Brokers of America website.

The intent of the report is to provide real advice on best practices and implementation strategies based on real life experience, using currently available technology.  A major objective is to provide vendors and insurance carriers guidance to allow  “more consistency in the real-time transactions that are offered to agencies and better performance in those transactions”.  To get information, the working group surveyed and interviewed agencies, carriers, and vendors that are actually involved in using the current technology.

The sections of the report are functionally oriented.  The first addresses ‘Credentials Management’ (security and access control).  Practical advice is provided, and alternatives are offered to insurers based on current practices.  For example,

“The security team at another carrier determined that since agents using the realtime capabilities of their agency management system had authenticated to get into that system, they were comfortable with allowing trusted source status to those agents. When an agent first completes a real‐time transaction through the management system and goes through the normal authentication process, from that point forward, the carrier attaches a temporary token to that agent. All future real‐time transactions do not follow the normal authentication process and instead directly enter the carrier’s system. This entire process is invisible to the agent and the response has been extremely positive.”

Pretty dry stuff, but a practical approach that will save agents real time in logging on.

Other sections of the report focus on Service Transactions (Inquiries, Endorsements, etc.) and Sales Transactions.  The last section lists techniques to effectively roll out functionality to the agents.  For any carrier (or vendor) that has not implemented broker facing technology, this is invaluable.

The industry owes considerable thanks to a group that strives to make the best out of the possible now.

Nov 14

Predictive Analytics Hits the Road: Telematics in Action

By Insurance-Canada.ca BlogEditorNo Comments

We have noted that the use of new technologies is creating huge pools of data that can, if analyzed using sophisticated predictive tools, assist in a number of disciplines including marketing, claims, and underwriting (see, e.g., our post on Managing Data for Profit and Growth).  Much of this work is still in the lab and results are still somewhat theoretical in the insurance community, with one exception:  Telematics.

At a recent Insurance Bureau of Canada Regulatory Affairs Symposium in Toronto, Darren Godfrey, senior vice president of personal lines at Intact Financial Corp., noted that the use of Predictive Analytics has the potential to allow insurance carriers to create competitive advantage.  “To get ahead of the industry from a growth standpoint, you have to be looking at (predictive analytic) techniques,” he was quoted as saying in CITopBroker coverage of the event.

However, these have not been tested to any great degree, resulting in serious, but still theoretical concerns regarding transparency and availability.  Godfrey noted, “If you take predictive modeling to the nth degree, you can end up in scenarios where you have availability issues because the price point gets pushed too far.”

Telematics, which is being used to support pay-as-you drive, or usage based insurance,  is an example of how data  can be used for predictive modelling of driving behaviour.  A major difference is that Telematics has matured significantly in a number of jurisdictions and has been tested by regulatory bodies.

In July, we posted on the confluence of business and regulatory factors  that are  driving adoption of Telematics in a number of jurisdictions including the US and Europe.  We noted further in August that Telematics are offering opportunities to meet consumers demands for lower costs through improved underwriting.  Quoted in Canadian Underwriter, Brian Stoll, director at Towers Watson, who spoke at the IBC Symposium made a similar point, “You get price accuracy, reduced accident frequency and the reduced accident frequency comes from providing scores back to drivers, telling them when they drive well and when they drive poorly.”

Stoll also noted the maturity Telematics has in meeting regulatory concerns, “From a regulatory standpoint, telematics has been received very favourably in the United States to the extent that it really represents driving behaviour and driving experience. It replaces the proxy that is credit score and other tools that have historically been used to differentiate risks that relate less directly to the exposure of individual people driving their vehicles.”

It seems that Telematics might be the place where the Predictive Analytic rubber is first meeting the P&C insurance road.

 

Nov 11

Creating, Leveraging Engagement and Loyalty with Social Media

By Insurance-Canada.ca BlogEditorNo Comments

In our last post, we noted that leading independent agents and insurers in the US are finding real value in creatively using social media.  Two recent articles underscore the characteristics that create the real value:  Engagement and Loyalty.

Engagement

eMarketer posted on work done by Digital marketing agency Web Liquid which found that photos on Facebook posts had the highest engagement rate (measured in ‘likes’ or comments), followed by those with video , links, or text only.

Additional research also indicated that “requesting the engagement activities” actually led to engagement. Momentus Media, which provides marketing software for use within Facebook, noted that “Facebook status updates that contained the word ‘like’ saw a 0.38% engagement rate and those that said ‘comment’ saw a 0.14% engagement rate. Text updates without either ‘like’ or ‘comment’ saw a lower 0.11% engagement.”

Loyalty

At the ACORD Implementation Forum we covered in our last post, Angelyn Truetel, an independent agent from Florida, noted that Twitter was especially useful for retention.  Research from Constant Contact and Chadwick Martin Bailey also reported in eMarketer, supported this, noting that Twitter users tend to follow a small number of companies, but when they did,   “50% said that after following a company’s tweets they were more likely to purchase from the firm, and among men the share was 55%. An even stronger majority said they would be more likely to recommend the brand to others.”

So what are the take-aways?  Use images in your on-line postings, ask for comments and ‘likes, and use Twitter to become a brand your customers follow.

And what’s your experience? Do you use Social Media for Engagent?  For Loyalty?

 

Nov 07

Get Naked and Prosper, Social Media Implementers Suggest

By Insurance-Canada.ca BlogEditorNo Comments

Social media marketing and service implementations are producing impressive results with modest investment for US insurance companies and independent insurance agents, a panel at the  recent ACORD Implementation Forum reported.  Being transparent with genuine personality seems to be a common denominator for success.

Angelyn Truetel, president of SouthGroup Insurance Gulf Coast in Florida has been actively using social media in her agency for less than a year, but has found that an investment of 15 minutes per day per staff member can result in impressive results when there is an opportunity to offer services.  For example, Truetel reported a 90% conversion rate for quote requests on LinkedIn.

The key, according to Truetel, is to be consistent and offer ‘interesting and helpful’ suggestions at the community level.  “You have to be where the customer is, and show your personality,” Truetel said.

Arron Lamp, vice-president – market management at Foremost Insurance Company, noted that his approach is to be a bit skeptical, but focus on helping agents. Lamp believes that video is becoming the “crushing app” in social media, and points to the success the company has had with The Foremost Insurance Guy  and the short video clips that mix information with self-deprecating humour.  The Foremost Insurance Guy is is  actually Jeff Blair, a member of Lamp’s team.

Lamp concurred with Truetel that a genuine personality is required, and advised that an attitude of “complete, selfless attention and promotion” is the magic ingredient.  Lamp said that the company’s investment in social media is ‘peanuts’ in comparison with traditional advertising.

The panelists agreed that it is still early days for social media, and the landscape is continually changing, however metrics are available from the social media (Facebook, LinkedIn, Twitter), and from other sources (e.g., Google Analytics) to help guide strategies and focus.   For example, Truetel says her experience suggests that Facebook is helpful for lead generation and Twitter is helpful for retention.

The panel, chaired by Mark Westin, Manager of Communications and Interactive Media for ACORD, noted that the social media space is very cluttered and requires creativity to attract mindshare.  Again, showing genuine  personality is key, in Westin’s mind.  In two words, Westin’s advice was, “Get Naked.”

Nov 03

Insurance Circa 2020: ACORD Members Prepare

By Insurance-Canada.ca BlogEditorNo Comments

In addition to discussing current issues, participants at the ACORD Implementation Forum in Fort Lauderdale, including insurers, agents, suppliers, and ACORD staff,  are  preparing themselves, and the industry organization itself for the year 2020.

A panel, moderated by ‘practical futurist’ Michael Rogers, looked at some of the characteristics of the new world and how organizations could prepare.  Gray Nester, MIS Director – BB&T Insurance Services,  representing the distributor community, set the stage with a recent experience.  He noted that in a recent trip to a pet store, as he was checking out with his dog food, a prompt on the point of sale terminal read “Apply for Pet Insurance?  Press 1 for application, 2 for no.”  Nester believes that this type of automatic, cross-marketing will become the norm  as we move forward.

John DiBuduo, Senior Vice President and CIO, Partner Reinsurance Company, believes that the major driver for insurers and reinsurers to innovate will be the need to seek new revenue sources in an ever increasingly competitive environment.  Monique Hesseling, Chief Marketing Officer and Head of Branch Operations for Zurich Global Energy, noted that increasing regulation will also force change in insurance operations.

Ed Skoviak, Architecture Services, Mass Mutual Financial Group, believes that technology will drive product change.  In the past, there have been attempts to build new products by combining features from existing products.  As technology and data management become more integrated, there will be an opportunity for insurers to link disparate elements that are called up as needed, rather than packaged completely at time of issuance.

Hesseling noted that new data sources would drive the need for some products.  As an example, she noted that some organizations are offering ‘reputational insurance’ for people and companies who have concerns about their names and reputations being negatively referenced on social media.

These changes will have profound impacts on technology departments. DiBuduo noted that the rapid changes in technology, and the proliferation of ‘Big Data’ (we posted on Big Data in June) will force insurance IT departments to move away from development and coding, to more integration of package technologies.  He noted that the primary strategic skill requirement was for IT to be an effective ‘technology broker’, linking needs to products and services.

Nester noted that technology would also force and allow the distributors’ roles to change.  He used a bundled product as an example .  Nester said consumers will want a ‘bundle’ of products tailored to their specific needs, which might include home insurance from one carrier, auto insurance from another, and life insurance from yet another.  This is traditional for an independent distributor.  However, he also noted that the consumer would want convenience that demanded that making application for, or making changes to, or paying for this product would be done with a single transaction, likely taking data from the consumer’s mobile device.  This requires close linkage among all of the providers of the underlying products.

Spero Zacharias, Senior Vice President – International Field Operations Services Manager for Chubb, noted that ACORD 2020 is an initiative by ACORD to continue to develop standards, but pay significant attention to the implementation of the standards to meet the needs of insurance practitioners.  Zacharias chairs the ACORD 2020 Advisory Committee charged with overseeing this initiative.

 

 

 

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