Self-service apps are disrupting the home insurance market
While they can reduce costs and enhance the buying experience, self-serve apps have not eliminated the manual claims process.
A vast majority of insurance carriers, 93%, report that self-service apps are having a major impact on how business is done today as consumers can now lead inspections and take measurements on their mobile devices, according to a study by LexisNexis Risk Solutions.
Assessing damage for a claim is the most common way policyholders leverage self-service apps, the study found. Carriers reported these programs don’t eliminate manual claims processes, but they do help reduce costs and meet the increasing demand for faster service and enhanced experiences, LexisNexis reported.
Virtual inspections and home measurement for new clients, along with measuring a home for a claim, were the other most commonly used app features.
Additionally, 89% of carriers are working to improve the home insurance buying experience, and nearly 70% are doing so by making investments to change the buying process. On top of improving the customer experience, these carriers are hoping to increase profitability and reduce underwriting expenses with these investments.
“While digital disruption to the home insurance buying process was already on the horizon, the pandemic accelerated carriers’ needs and consumers’ demand for virtual interaction,” George Hosfield, senior director of home insurance at LexisNexis Risk Solutions, said in a release. “Carriers that have not already implemented investments in automation need to act now to catch up to market leaders. We see from this study and our conversations; it’s just the tip of the iceberg. Carriers have the opportunity to improve the customer experience by using the intelligence at their fingertips to reduce time and expenses, maximize efficiencies, and better know their customers, the risks, and the return opportunities.”
As a result of the study, LexisNexis is predicting that by 2022 more than two-thirds of the top 10 U.S. home insurance carriers will guide their customers through the buying process with a mostly automated approach. Further, it is projected that only 10% of these insurance companies will conduct on-site inspections for most new policies.
“Even as home insurance automation continues to evolve, the carriers that utilize quality data to optimize their customer experience will be able to offer a more consultative and trusted customer experience while positioning themselves for better segmentation and helping them make decisions faster. They will do this by both confirming data versus collecting it from the consumer and by leveraging prior policy information to guide them to the right coverages for that consumer,” Hosfield said.
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