The protection application form is over 250 years old. But is there cause for celebration? While the application is now online, it is still a single distributor/single insurer process, causing significant cost and frustration to distributors having to contact multiple insurers to compare terms.
But today’s technology can deliver the connectivity of a single distributor/multi-insurer transaction platform with the distributor at the centre, so is it time to say goodbye to the application?
According to research by Lloyds Bank, which found 81 per cent of UK consumers use the internet to shop around, with 79 per cent citing saving money on insurance as a reason for doing so, our target market is ready for a digital step change. In designing a new digital experience, there are five must-dos:
Make it a “1:many” transaction platform
The Treasury’s Insurance Fraud Taskforce final report highlighted the importance of an effective application process to prevent fraud before policy commencement. It found price comparison websites were uniquely positioned to detect suspicious behavior, yet have not shared intelligence with insurers as effectively as they could.
Among its recommendations is the more effective sharing of application data between the two. I refer to this as 1:many connectivity. The 1:many platform will also mean a distributor can use a single interface to directly engage the underwriting engines of multiple insurers to deliver “buy now” terms and purchase. The direct connection enables insurers to independently consider all responses, with no loss of data.
Make it distributor-centric
This user interface should reinforce the distributor brand and its customer value-add. It should also deliver the next gen menu, where the adviser can recommend across multiple covers and insurers with no re-keying and without leaving the site.
Buy now trumps buy later
The insurers’ underwriting rules should optimise immediate decisions. For lower premiums, a more conservative immediate decision would avoid the cost, uncertainty and delay of requesting additional information.
Make the data gathering intelligent
Every data item should be necessary for the cover, age, sum insured and previous disclosures. Pre-population and use of multiple data sources, with permission, should replace questions. Customers could input product-agnostic data in advance of the advice process to ensure there is no bias in the advice.
Make it rewarding
For self-serve customers the data gathering should have a value exchange (for example, show the impact of answers on terms). We should learn how to improve engagement from game-design principles.
It is time to replace the application form with a digital transaction platform. Technology can transform a 1:1 to a 1:many buying experience, with a dashboard of information to make a purchase decision on and then buy. Analytics will allow distributors to evidence their regulatory responsibilities and better understand customer behaviour.
Larger distributors can design the user interface to deliver a consistent brand experience and restricted panel distributors can work with insurers to streamline their questions without material anti-selection.
Martin Werth is chief executive of UnderwriteMe