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    Time for UK insurers to catch up with insurtech, reveals industry study


    The insurance market is losing ground to insurtech startups and must focus on digital business to stay competitive.

    In its UK Insurance Underwriting Digitisation Study 2017, research firm LexisNexis revealed the opinions of 107 insurance professionals, most of whom spend more than 80 per cent of their time pricing and underwriting policies.

    The study examined the views of personal lines motor and home insurers on issues such as whether digitisation will create stronger business opportunities, and how their organisations are embracing new technology.

    Key findings

    • Just 4 per cent of personal lines insurers say their businesses are entirely or almost entirely digital, while 92 per cent recognise that digitisation has allowed new insurance providers to emerge and disrupt the market
    • 31 per cent of motor insurers and 25 per cent of home insurers are using mostly manual underwriting processes
    • 78 per cent believe digitisation is valuable for improved speed to market for new products 
    • 64 per cent consider policy history data as an important way to improve the customer journey 

    The need for speed

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    How technology is driving new business models for motor insurers


    The combined effect of big data, artificial intelligence and machine learning has potentially huge implications for the future of motor insurance. Hardly a week goes by without research or an industry spokesperson highlighting the demise of traditional practices and the rise of insurtech.

    For example Insurance Times recently quoted AXA’s UK technical director David Williams’ suggestion that as much as 80 per cent of today’s motor insurance market will have disappeared by 2040. That’s not a death knell for motor insurers. Instead the market is likely to change, with insurance being defined and transacted differently. Insurers have time to react, and there is huge potential for technology to benefit the motor market.

    The advent of driverless cars, continued insurtech innovation, the impact of the sharing economy, the growth of consumer power and the expectations of millennials – these are some of the factors that will increasingly shape insurance products and the relationship between insurer and insured.

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    How do you handle all the data enrichment for motor insurance?


    Profitable underwriting depends on reliable and relevant data. Today, thanks to insurtech, insurers have access to more data than ever before, which helps everyone in the insurance chain. 

    Data enrichment means that insurers need some way to store data, not only in huge volumes, but also in a secure format. The amount of data that insurers could gather about customers and their driving behaviour will grow with time as data-gathering technology use increases. Huge amounts of data are already being taken from telematics, GPS and dashcam devices. It is believed that by 2020 about 1.7mb of new information will be created every second for every human on the planet, meaning that data storage requirements are going to grow exponentially too.

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