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Would you agree that the first quote for insurance sales has traditionally relied on the principle of ‘few-size-fits-all’ ?

As the insurance application matures, this has the potential for dissatisfaction and trust erosion amongst prospects if the first quote varies from the final one. A more effective strategy involves bringing decision points forward, tailoring business rules to each transaction, and aligning quote throughput with risk appetite.

Let us delve into some of the forward-thinking strategies for better customer experience in the quotation process.

The insurance quotation process serves as a pivotal touch-point between prospects and insurance carriers across various lines of business. Post-COVID-19, the insurance porting landscape has witnessed a seismic shift, for instance the average retail health churn rates with most SAHI carriers in India soared from a humble 15% to a staggering 40% recently. This shift underscores the newfound importance of insurance porting and highlights the urgency for the optimization of the quotation and binding process. However, the prevalence of legacy practices presents significant challenges, particularly in the quotation process. This article dissects these challenges, sheds light on their impact, and proposes a forward-thinking strategy to enhance customer experience.

The Quotation Quagmire

The detailed quotation is often the primary purpose why a prospect visits an Insurer’s website / online portal / agent for portability. Often the process and the details needed for generating a quote tend to dissuade customers. Here are some elements that contribute to friction

• Personalization Predicament: Legacy processes and systems often struggle with providing personalized quotes, a crucial factor in the competitive insurance landscape. The integration of advanced tools that could understand the prospects’ history (past policies, documents or declarations) is pivotal to tailoring quotes to individual needs, thereby elevating the overall user experience.
• Protracted Turnaround Times: Legacy core and front-end systems contribute to frustratingly arduous data entry and long waiting periods for prospects before an actual quote is provided, hindering the overall user experience. These delays not only risk prospect disengagement but also jeopardize the chances of converting a prospective lead into a satisfied customer.
• Navigational Nightmares: Outdated user interfaces further compound the problem, introducing unnecessary complexity into the quotation process. Simplifying these interfaces is paramount for a smoother, more user-friendly navigation experience.
• Security Snags: Security concerns loom large with outdated practices, potentially exposing users to risks. Embracing modern security protocols becomes imperative to build trust and ensure the safeguarding of sensitive data across various lines of business.

Revolutionizing the Quoting Workflow:

The traditional quotation approach relying on a few-size-fits-all (based on optimistic risk assumptions) during the initial quote has potential for dissatisfaction and erode trust  amongst prospects. A more effective strategy would involve bringing data driven decision points forward, tailoring business rules to each transaction, and aligning quote throughput with risk appetite

Paving the Way Forward

The post-COVID paradigm shift makes the optimization of the quoting process crucial across all lines of business.

• Empowering Underwriters with Critical Data: Automation emerges as a game-changer by bringing forward critical underwriting data. This supports seamless applications, allowing users to receive instant, once-and-done quotes. This not only expedites the process but also cultivates trust and satisfaction, setting a positive tone for the entire customer relationship.

Strategic Advantages

Substantial competitive edge is waiting to be gained by some simple but effective strategies

• Bringing data and decision points forward in the application and quoting workflow: Build capability to read, understand and validate the prospects’ history right at the first contact. For Eg : a past policy document could provide almost everything that needs to fulfill a quote or even an insurance application.
• Tailoring business rules to each transaction: Load and discount quotes based on business rules using data gleamed from step above
• Aligning quote throughput with risk appetite: Allow data driven metrices to decide / predict / recommend outcomes keeping congnizance of underwriting guidelines and risk appetite

In our exploration of transforming the insurance quoting and porting processes, we have uncovered the challenges of legacy practices and proposed a modernized approach. Expert opinions throughout this article affirm the significance of incorporating advanced tools to modernize the quotation process. Such solutions not only streamline the quoting workflow but also address the complex landscape of insurance porting and access to clear and actionable quotations.

Attributum Insurtech, a pioneer in innovative automation and decision products for the insurance industry. PIVOT is an AI powered automation platform that offer the ground breaking products such as PIVOT Portability. PIVOT Co-Pilots that stands at the forefront of the evolution of Insurtech. As the industry continues to embrace transformative solutions, Attributum Insurtech sets the standard for efficiency, security, and customer satisfaction across various lines of business.

As motor insurance markets worldwide mature, they tend to progress from asset-based risk coverage, to person-based, to usage-based insurance (UBI) programmes. But Indian motor underwriters will have a unique opportunity to skip a step of market evolution. The fast advancements in technology and high adoption rates we’re seeing in India, have presented a potential opportunity for Indian motor insurers to take the leap from asset-based insurance (directly) to usage-based insurance.

The Insurance Regulatory and Development Authority of India (IRDAI) has been encouraging insurers to look more closely at UBI (usage based insurance) and it is considering freeing up the regulation, and price tariff, to allow pay-as-you-go or usage-based insurance. There is now a great opportunity for insurers in India to innovate around some of the lower-cost alternatives to conventional telematics devices – like smartphones with mobile apps, 12V dongles, black boxes, Bluetooth connections and so on.

In addition to risk assessment, telematics alerts can automatically send data to an insurance company in an accident scenario , providing the first notice of loss. By rapidly analyzing data from sensors on brakes, air bags, seat belts and other systems, the insurer can estimate the severity of the accident. Such alerts help the insurer gain control of claims costs, improve the customer relationship and can trigger appropriate actions (such as calling emergency personnel, an automobile club or towing service, or even sending a replacement vehicle directly to the scene).
The telemetry data, such as speed, impact G-force, vehicle location and direction, can also help the claims handling process and help reduce loss adjustment expenses. We can also expect to see motor insurers in India introducing the technology to track driver behaviour, and better assess risk through telematics devices, with the goal that more accurate data will help them cut insurance premiums and boost revenue.

This is of course, when drivers take full advantage of the discounts available by using telematics systems and are willing to comply with the safer driving or mileage requirements of particular products. In addition to the savings in Insurance cost, insurers have the benefit of operating in a less risky environment with the ability to price safer drivers optimally and higher risk drivers more appropriately. Technology will offer many opportunities to attract new customers, to coach their driving style and price them more effectively. It is going to be become an important competitive differentiator, once the benefits are more widely understood by consumers.

Do read an old article written by me in Deccan Chronicle on this subject a few years ago where i provide a case study with quantification of savings to consumers by adopting telematics solutions
https://www.deccanchronicle.com/business/companies/051017/telematics-can-bring-down-your-car-insurance-premium-by-30-per-cent.html

LtCdr Vijaykumar KP

CEO