Blog: Tech partnerships help predict and prevent not just repair and replace

new-technology

Technology is changing the way insurers can access claims data and partnerships that harness this technology offer the potential to significantly improve customer experience and shift insurers' traditional focus of repair and replace onto a more proactive predict-and-prevent footing, explains Mike Webley, sales director at Horizon.

The great strides taken with technological advances in recent years, particularly in consumer retail, have inspired a wave of insurtech start-ups and huge investment in technology by insurers and brokers. For insurers, harnessing the benefits of innovative technology is driven primarily by their desire to improve performance and achieve better operational resilience and efficiency. Enhancing customer experience is also a desired goal and modern technologies are allowing insurers to achieve both.

While the US-based tech giants have blazed a B2C trail with technology-driven relationships largely in a retail setting, insurance is starting to prove the value of that concept in wholesale markets. Many advances continue to be made outside insurance, often much more rapidly, meaning there is potentially a huge opportunity for further collaborations that can bring a range of benefits to both insurer and tech provider alike, while also adding value to the end customer.

Partnerships, such as Horizon’s partnership with smart-home provider Hive, enable insurers to be much more proactive. Our industry has traditionally repaired and replaced, and it will continue to do so, but if it can also predict and prevent we can reduce the impact on clients and simultaneously improve claims performance.

For insurers or brokers looking to form partnerships to gain these and other benefits, it is important to scrutinise whether a collaboration truly has the potential to materially alter claims experience and improve a client’s risk rating. Using the example of household clients and water escape, a sensor enhances client awareness and attunes them to what is happening with something they don’t see and often can’t hear. As a society, we protect our homes from the obvious perils of fire and theft but tend not to protect our homes from water damage in the same way. This is probably why it is a £1bn-a-year problem, which technology can educate clients about to help reduce that.

Sensor technology can enable clients in multiple settings to be much more aware of all kinds of issues and dangers that are invisible to them. By putting data and analysis into their hands this can also educate them about the appropriate actions to take. With enhanced customer vigilance and the technology itself providing early warnings, sometimes even triggering a physical emergency response, this creates a platform for improved claims performance and the potential for greatly enhanced customer experience.

In embarking on any partnership it is important to understand what the measurable, tangible benefits will be for the insured, insurer and technology partner. From our experience, sensor-based technology not only heightens risk awareness and prevents damage from occurring to insureds’ homes in the first place, it also shields them from the associated stresses and inconvenience. Never have individuals felt safer being in their own homes and this technology reduces the requirement for alternative accommodation following a loss. Keeping clients aware and stress free also has obvious advantages for broker partners. Reducing claims quantum is clearly the main benefit for the insurer, and for the technology provider, many of which operate in a retail setting, such partnerships offer broader reach by allowing them to tap into wholesale markets.

Technology is enabling us to gain insight and understanding of the physical world in ways that have never been possible before. Partnerships that harness this technology offer the potential to significantly improve customer experience and claims performance, and shift insurer’s traditional focus of repair and replace onto a more proactive predict-and-prevent footing.

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