written by James Baldwin

I have a friend, who we shall call Harry for no other reason than I just saw the Harry Potter books in the bookstore.

18 months ago, Harry was in a minor car accident (in which no one was hurt). Harry was insured with Company A, who covered his repairs and the third party claim.

6 months later, Harry’s policy was due for renewal, but apparently, due to the recent accident on his record, Company A doubled his previous premium.

Being a savvy shopper, Harry began shopping for new insurance and within a short time found the same coverage for a lower price from Company B.

A few months later, Harry, who likes new things, decided to purchase a new car. However, A new car meant new insurance. Harry asks the dealer to try Company B as they are his current insurer. Alas (there would be no story without this obviously little twist), for some reason Company B came back with a much higher quote than he had on his old car.

Harry whips out his smartphone and within minutes gets a lower quote from, but of course, Company A – the same company that had raised his premium a few months earlier! Of course Harry decides to go back to Company A for his new car insurance.

That same day, Harry contacts Company B for a refund on the remaining period of the old insurance, as he no longer has the old car. Company B processes his refund request, and at the end of the call they ask him if his refund was because he had a new car. “Well yes, indeed it is”, says Harry, waiting for the inevitable and imminent “Have you considered insuring your new car with us?”. Harry explains that the quote he got from them at the dealer was simply too expensive.

To close the story, fast forward to only a few weeks ago and Harry receives a renewal notice from Company B for the policy he had been refunded on a few months ago!

I am sure most of you can recount a similar, seemingly illogical, insurance story (mine is around a broken iPhone and my house insurance).

What had happened at both insurance companies was a failure to understand Harry as an entity and translate that knowledge into a “saleable” proposition. They lacked the holistic view to their complete relationship with Harry. To get to that, they needed to quickly draw meaningful analytics on not just Harry’s present but his past as well. While much of this relates cross-industry, insurance is particularly interesting because the product offered is unique – the entire position is based on evaluating risk and executing on a contract or guarantee of protection if the need comes.

In the current market where a comparison is a few short clicks away, the only way to remain profitable and competitive in premiums is to be able to make policies more and more of an exact fit around a customer. Throw in the sheer blitz of data from Internet of Things (in-car sensors, phone sensors, smart watches, dash cams, etc.) and you can begin to tailor even more. You don’t have to be Big Brother to do it – I for one would be happy to (securely) provide my exercise habits if it meant a lower life or health insurance premium.

How about being able to publish claims bulletins to Claims handlers so they have access to the info without having to search/check if it exists? What if an underwriter could pull a claim summary record without claims staff collating it for them? Imagine sanctions checking being possible in the same system as Underwriting and Claims with the status of the check being visible to those same Underwriters or Claims processors.

To create this vision, insurance companies should be moving towards Systems of Engagement – merging acquisition, claims and policy data into a simple view for an underwriter or agent. This would not only help with smarter renewals, but also in “Next Best Action” scenarios – where a more suitable product can be recommended to a customer who has just made an unsuccessful claim all as part of the claim lifecycle!

I suppose what Harry should expect from his insurance company could be as simple as a unified, holistic view of his history available to anyone he talks to at their company, regardless of motive. It doesn’t seem like he should need magic for that…