4 alternatives to long proposal forms in P&C insurance
The Louvre in Paris displays a stone 'stele' (monument) from around 1750 BC. Insribed on the stele is a set of codes including what historians claim is the earliest known written insurance policy. Stone was used to record the details as it was written about 1,500 years before paper was invented.
Cynics will note that nearly 4 millennia later, it still remains one of the few written insurance policies in existence that has not generated some type of paperwork.
Today, paper proposal forms have largely been replaced by electronic versions (at least for car and home insurance). However, while the medium has changed, the process of filling in a form to get an insurance quote has been with us for hundreds of years.
Generally, people dislike filling in long forms but there is no real alternative when looking for an insurance quote. You can either do it yourself or speak to an agent who will then fill in a form on your behalf.
Insurers and brokers know they can gain a competitive advantage by reducing or even replacing proposal forms in the process. Less questions mean more completed quotes and more new customers. But what are the options? Below are four ways technology can help.
1. Pre-fill solutions
The majority of information needed for car and home insurance is available on official documents the car/home owner possesses. Gatepost provide a mobile first solution that enables consumers to create a'digital identity' using data extracted from their documents. This verified information can then be used to pre-fill the insurance proposal form and reduce the question set by over 50-80%.
There are also a number of data enrichment providers that can provide information on a person, their car or property based on a key piece of data being submitted.
For example, car insurers and brokers need to know the vehicle make, model, engine size etc. so they can calculate the premium. By integrating with a data enrichment provider like Verisk, the insurer/broker just needs to ask for the vehicle registration number. The registration can then be used to get the relevant vehicle details and pre-fill the proposal form. The customer simply verifies their vehicle details rather than filling in the fields.
Similar solutions for addresses and property details are available from companies like Gamma in Ireland and the UK.
2. Video and/or Photographs
Someone once said 'if a picture paints a thousand words, then a video is worth a million'.
Rather than asking on a proposal form for details of a car or home, progressive companies are now using photos or videos in the quotation process.
Originally founded in South Africa, Pineapple asks the customer to submit photo of their car when getting quote, buying insurance, making a claim or adjusting their policy. This can also be done quickly through a mobile app the customer installs.
Similar solutions are now also available for property insurance in the US. OneXperience from Verisk and Flyreel (acquired by LexisNexis) both provide video technology that facilitate 'virtual' inspection of a properties. This helps the insurer identify the unique aspects of a property for optimal underwriting.
3. WhatsApp and Chatbots
Consumers want to use mobile phone to interact with service providers like banks, retailers and hotels. Long proposal forms don't tend to work well on smaller screens and consumers are often forced to use their PC or laptop when looking for an insurance quote.
Insurance providers who make it easy to buy insurance on a mobile phone immediately have a competitive advantage when it comes to 'digital natives'.
Companies like Coverfox give customers the option to get insurance quotes through WhatsApp by asking them a set of questions or giving them numbered options to select.
Intelligent chatbots have been used for a number of years for customer support but have now been adopted by companies like Verloop to help customers get insurance quotes.
Most insurance proposal forms include questions that appear to have no relevance to the type of cover. For example car insurers commonly ask for your occupation. These questions are generally a 'proxy' that helps them determine what type of person you are and possibly how you may drive.
By having access to real driving behaviour, through the use of telematic devices or apps, a number of questions are no longer required and the proposal form can be shortened.
Companies like Tesla need to ask very few questions when providing a quote for car insurance. Tesla have the advantage over incumbents of already knowing the car spec, your personal details and your driving behaviour. There is very little other information they need to request on a proposal form to be able to give an insurance quote.
Insurance providers recognise that 'shortening the customer journey' gives them a better chance of getting new customers. A lot of time and energy has gone into reviewing the question set and making improvements so the form can be completed as quickly as possible. Often these reviews are limited in scope as it is assumed that a proposal form is the only way to get the required data.
A growing majority of consumers now expect to be able to interact with their service providers on their phone. However long proposal forms with 30 to 70 questions deliver a poor customer experience on these devices and are not fit for purpose. Innovative insurers and brokers have a golden opportunity to differentiate themselves in the market by offering mobile first solutions to prospective customers.