Big Data & Automation: when less means more for customers

Cheryl Agius, CEO General Insurance, Legal & General 


Traditionally the role of the home insurer was simple; protect customers’ homes and their contents, and return them to their original state should an unfortunate event occur. Insurers would ask customers a set of questions and in return, if suitable, would offer customers a premium for an annual policy.

How we buy home insurance is changing. In the age of digital disruption, businesses are offering customers experiences way above and beyond what they have traditionally come to expect from insurers. Meerkats, opera singers and now Skeletor offer services to help consumers save money. However, the tediousness of obtaining a home insurance quote has not changed at all, in some cases, the process has become longer. Customers today still need up to 30 minutes to answer often 40 questions or more, and in an age when consumers are conducting much of their transactions on mobiles, the industry needs to move forward.

Gone are the days when it was acceptable for customers to answer such long question sets, and then for them to have validated that their own answers are accurate if they ever had to claim. Failing to answer questions correctly could lead to a claim being refused at a critical time to the customer. The current process is typically slow and a huge source of customer frustration and confusion.

Retail brands are elevating customer experience and setting expectation levels for other industries to follow. Customers now expect simple, easy to use processes from their insurer, and they expect the journey to work on any device, anywhere, at any time, day or night.

Using the data available already. Insurance companies are awash with data. The data is often segmented and used for setting prices for customers, but it stops short of determining a true underlying value for the customer experience as well as the insurer. More often than not, insurers have built a centralised, impenetrable black box that makes decisions on prices. Opportunities are being missed to help customers have better customer journeys, and allowing customers to focus more on what they are buying, rather than whether they have disclosed the correct information.

In theory, deep insights from customer big data should enable insurers to be more creative, and free up time to connect with customers in new ways that add value. In practice, however, many insurers continue to ask more and more questions to gather more and more data to continue to refine their prices for customers.

There is a way to use all the available data on household properties to strengthen, rather than weaken, connections to customers. We have observed in retail businesses big improvements when businesses strike a balance between the creativity of their people and data and the science of sales. What makes insurance different?

The industry needs to move from requesting property data from customers to the insurers collecting the data available in the market and having it work for customers rather than against them, such as the risk of providing incorrect information. Insurers have access to all sorts of data on household properties. In some cases, insurers know more than customers do about their own properties. Insurers can improve the customer experience by focusing on collecting exactly the right data including their own and other focused insights to set the price of insurance. Ultimately the aim is to deliver an enhanced and superior customer experience.

Design “with the customers, for the customers” Legal & General have recently launched SmartQuote, home insurance quotes to customers using just five simple questions. One of the questions asks for the postcode of the property the customer wants to insure, and the hardest question asks “in the past 5 years, how many claims have you or anyone living with you made?”.

Big Data and automation are at the heart of SmartQuote. Legal & General have access to about 400 data points about an individual property, where it is located, the roof construction, proximity to trees, all the information an insurer needs to understand the risk. These come from a variety of sources such as property surveys, flood information and claims data.

As well as an easy, convenient upfront quote journey, customers will also experience more certainty if they need to make a claim, as the difficulty and responsibility of providing the complex details about the property has been taken away. This averts a situation where a customer may unwittingly provide incorrect information about certain aspects of their property, which could mean a future claim is rejected.

Customers don’t love technology. Customers are looking for solutions to make their life better.

Less means more. The insurance industry must continually review the data that is available to them and resist the temptation to request more and more data from customers just because they can.

An effective journey is one that is short and leads to measurable customer experience, whilst at the same time providing a service. Using that lens, the industry will start to change how customers interact with insurers and the perception of insurance being confusing, when it should be very simple.

Insurers have been putting huge efforts into building their own customer insight and analytical organizations for years. They should be creating “digital centres of excellence in data,” to help bring new approaches to customers. When the right data analytics are used with technology, the results can be truly transformational.

Cheryl Agius, CEO General Insurance at Legal & General said: “We firmly believe SmartQuote will revolutionise the household insurance sector. Obtaining a household insurance quote by asking five questions is just the start of a simple and easy customer journey that can be completed on your mobile. Big Data analytics and automation are transforming the way we interact with customers so that we can, quite literally, offer them insurance in minutes.”


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