I had the pleasure to attend the Intelligent Insurer Underwriting Innovation Europe event. One of the themes that ran through the whole event was that it’s great to have all the data, models and software in the world, but ultimately the question came back to, how does this serve the customer? The real customer, the one who pays for the insurance.
An insurer having extra insight to make a better decision is one thing, but how can we as an industry support brokers and customers better using the information? If the insurer could share the information with a broker, or with a customer to help them understand their exposures better, they can ultimately get the right insurance program for them.
Or if there are changes in the business, can the insurer and broker pro-actively reach out to the customer to make sure that the program continues to perform in light of the changes.
What’s going on behind the policy request?
Here are two experiences I had as an attacking broker that highlight, in my opinion, the need for insurers and brokers to work more closely together to better serve the customer.
Firstly, the case of a water jetting company. Not the sort of water jets you clean the driveway, patio or the car with but specialist stuff that is powerful enough to cut concrete. As I undertook my discovery conversation, I found that they worked on railway sidings, mines and even put equipment on the inside of the pipe between the oil rig and land to clean it.
They were insured for just over £2,000 a year with a major UK insurer. I can recall, standing in their office with their policy and their schedule, pointing out each specific exclusion for these activities.
On another occasion, I was visiting an engineering firm who provided machines that handled plastic. It was a similar story, where they were putting the machines in places where there were standard high risk exclusions. This time, laying pipes offshore and even a machine in the hot zone helping to process nuclear waste! The underwriter on this occasion clearly did not understand the risk.
Providing adequate coverage
Why do I bring these examples up? In both cases they were not adequately insured, and were labouring under the misapprehension that they were. I think they perfectly illustrate the point being made at the conference. There is ample information in the public domain to be able to profile a business.
Combining this information with the broker presentation helps an underwriter form a better understanding of the risk. If the data publicly available highlights a discrepancy, the insurer and broker can work together to make sure the customer is protected.
A great example of this was presented by Tony Dingemanse, Chief Innovation Officer of Risk, a Dutch MGA and Insurtech. Risk use technology and data to improve the process for the broker and the insurer, which ultimately provides a better outcome for the customer.
At FRISS our mission is to make insurance more honest. Honest insurance is not just about preventing fraud, it is about a transparent understanding of the risk too. Ultimately, in the examples above, the customer was not protected by their insurance, and it is this type of situation we should all be striving to avoid. After all, insurance is a beautiful thing.