LexisNexis Risk Solutions provides five recommendations on how to turn gaps into opportunities to gain the competitive advantage
Atlanta, GA (Feb. 4, 2019) – LexisNexis Risk Solutions, a technology, data and analytics company, has released the findings of a new commercial insurance study, which reveals the challenges small commercial insurance carriers face and how to turn these challenges into opportunities in order to maintain profitability and gain a competitive advantage.
To better understand how commercial insurers are dealing with current pressures, LexisNexis Risk Solutions surveyed over 400 insurance professionals working in workers’ compensation, commercial auto, commercial property and business owners’ policy lines, and asked their perspectives on five topics – Automation, Data Assets, Predictive Modeling, Customer Experience, and Market Trends – with direct bearing on their business, including the potential impact of future trends. The resulting report, titled A Time of Change in Small Commercial Insurance, brings to light that commercial insurers can no longer be complacent with current processes and capabilities. In today’s digital era, customers have advanced expectations for service, efficiency and innovation, and those carriers who deliver gain the competitive advantage.
“With major technological innovations being introduced and customer expectations changing, today’s commercial insurance marketplace is more challenging and competitive than it’s ever been,” said Mathew Stordy, Senior Director of Commercial Insurance at LexisNexis Risk Solutions. “It can be overwhelming for commercial insurers to know where to begin in order to keep up and gain a competitive edge. But the good news is that the carriers who identify the gaps and act now can make meaningful progress towards attaining 2019 and future goals.”
The report reveals key insights that demonstrate clear gaps within current processes and capabilities that can be turned into actionable opportunities for small commercial insurers to be successful in 2019 and beyond. Based on the study, LexisNexis identified the following insights for each of the five topics:
- Expand Automation Capabilities: Automation lags behind desired levels, and levels haven’t improved over the past couple of years. In fact, 89 percent of insurance professionals responding to the survey reported the need to manually re-evaluate insurance applications and, as a result, the degree of manual work required in commercial underwriting continues to be the leading pain point. If carriers expand their automation capabilities to include advanced use of predictive modeling and automated quoting through prefilled data, they can get closer to their efficiency goals by reducing errors and unnecessary rework on policies, improving turnaround times, and advancing their competitive advantage.
- Take Advantage of the Best Data Available: While insurance carrier respondents state that consumer credit (77 percent) and commercial credit (76 percent) information offer them the most valuable competitive advantage, only 40 percent of them have integrated these data sets into their standard workflow. Instead, they’re relying on public records and Internet searches. If carriers standardized the usage of consumer and commercial credit data across the workflow, it could help improve their profitability.
- Use Predictive Modeling Consistently: 81 percent of commercial carrier respondents believe predictive modeling is important to their commercial underwriting, pricing and rating, yet only a third currently use it consistently. And, according to the study, carriers believe predictive modeling can improve risk assessment and support more consistent decision-making. Carriers who leverage predictive modeling most appropriately gain the more near-term benefit of better scoring data that can help them make the best decisions for their business. Longer term, they can build on that knowledge to adopt predictive modeling as a consistent business practice.
- Improve Customer Experience: When quotes for personal insurance can happen online within minutes, it sets the expectation for customers that commercial insurance should be the same. But commercial carriers have typically underinvested in the customer experience, so expectations are often met with disappointment. However, adding automation can help achieve faster turnaround time, which has been cited as a top priority for commercial carriers. And, for the 85 percent of survey respondents who would like to see improved accuracy of customer data, adding predictive modeling and a streamlined process to standardize how policies are written are easy ways to help improve customer satisfaction.
- Embrace and Invest in Emerging Market Trends: There are many external factors that can impact business strategy. According to commercial insurers, telematics, Internet of things (IoT), data breaches and sharing platforms are seen to be the most likely to impact their business. Along with identifying relevant emerging trends, the study also asked commercial carriers to characterize each as a threat or opportunity. Responses reveal telematics and IoT as the two trends offering the biggest opportunities for their business. Change is inevitable and those who will be the most successful are the carriers who embrace these changes and take advantage of the opportunities that present themselves.
The research in the study also indicates that there are opportunities for both traditional and non-traditional carriers to do business more effectively. Many of the carriers recognize the importance of current and emerging market trends and understand the potential value that embracing them can bring to their business. However, few are taking sufficient action to keep up and, as a result of this, are lagging behind. Every time a carrier fails to turn an opportunity into a business asset, they risk lagging further behind changing market demands and evolving customer expectations. The report underscores that carriers should act now and not be complacent.
Access the full report: A Time of Change in Small Commercial Insurance.
About LexisNexis Risk Solutions
LexisNexis Risk Solutions harnesses the power of data and advanced analytics to provide insights that help businesses and governmental entities reduce risk and improve decisions to benefit people around the globe. We provide data and technology solutions for a wide range of industries including insurance, financial services, healthcare and government. Headquartered in metro Atlanta, Georgia, we have offices throughout the world and are part of RELX Group (LSE: REL/NYSE: RELX), a global provider of information and analytics for professional and business customers across industriesFor more information, please visit www.risk.lexisnexis.com.
SOURCE: LexisNexis Risk SolutionsTags: carriers, LexisNexis Risk Solutions, small business, survey