A look at UK home insurance in 2022 and beyond — Part 2
A recent white paper released by Bdeo explores changes and challenges in the U.K. home insurance market.
Editor’s note: Part one of this story was published on PropertyCasualty360.com Tuesday, January 25, 2022. You can view it here.
Big changes are on the horizon for the home insurance market in the United Kingdom, and a white paper authored by Sabine VanderLinden and released by Bdeo explores challenges in the market and what it will take for the industry to continue to evolve beyond 2022.
Introducing automated underwriting, the paper says, could help P&C insurers expand the range of risks they write by utilizing data from real-time sources. This influx of current, real-world data will provide more accurate information for insurers to use to examine risk around things like weather and crime.
As discussed in part one of this story, undercharging for premiums is a widespread problem in the U.K. home insurance market, and having up-to-date, concrete data about risk could ensure insurers aren’t overcharging those in low-risk situations or undercharging those who present a higher risk.
Embedded insurance is another emerging trend in the U.K. market, and can offer customers more personalized coverage options and a streamlined purchasing process. Embedded insurance expert Simon Torrance, the white paper states, estimates this market will grow to $3 trillion globally by 2030.
“Rapid developments in financial technology mean that any company – big or small – can now integrate financial services and insurance into their propositions and customer experiences,” Torrance, founder and CEO, Embedded Finance & Super App Strategies, said in the report. “What was technically and operationally difficult and expensive in the past and out of reach of all but the biggest companies is now thirty-times easier and cheaper for innovators to test, iterate and scale. The potential tangible benefits for any brand are new high margins revenues, greater customer loyalty and higher customer lifetime value – if you do it right.”
All of this new technology and innovation isn’t worth a thing if companies aren’t willing to evolve their culture and actually implement changes. According to an article from Harvard Business Review, which is referenced in the white paper, “More and more companies realize they must reinvent their cultures by infusing innovation into their DNA. Unlike startups that get to shape culture from scratch, established companies must transform existing norms, values and assumptions in ways that inspire everyone to innovate — not just at the top of the organization, but at all levels.”
Change, the white paper states, must begin at the c-suite level and actually address the needs of modern insurance clients.
“The foundation of tech-enabled value generation with longevity, especially in financial services where the ‘social license to innovate’ is becoming a recognized fundamental in the trading context, is clarity on explainability, transparency and accountability,” Shân Millie, founder, Bright Blue Hare, innovation & customer lead for Greenkite and coaching director, EDII, stated in the paper. “It is the responsibility of the board to set the expectation and standards, articulate the ground rules, and enable operationalization in the business, notably fit-for-purpose reward structures. So instead of asking ‘Am I doing enough to put personalization capability into our tech stack/?’ the question for c-suite leaders should be: ‘Am I clear on how personalization capability is designed, used and accountable in our firm — and how it supports the delivery of our organizational purpose?’”
For more information about the U.K. home insurance market, case studies, suggestions for how insurers can improve the customer journey and more, you can view the white paper in its entirety at bdeo.io.