Way of the future for growing your auto and home portfolio

Growing your personal lines business in the future will be increasingly tied to how you personalize your home and auto insurance products, says a global insurance report by EY. That means offering extra, supplementary services to your clients.

“True digital leadership requires insurers to enrich the core value proposition with ancillary services,” says the EY report. “They can also extend their expertise and capabilities to support new offerings.”

The report is authored by Jeff Gill, EY’s Americas insurance leader, Anita Sun-Young Bong, EY’s Asia-Pacific insurance leader and Philip Vermeulen, EY’s EMEIA [Europe, Middle East, India, and Africa] insurance leader. The authors cite several examples of personalized insurance offerings for home and auto insurance policyholders.

“Consider how: Regional carriers in Europe are tailoring auto coverage for younger drivers, with safety training and education features,” the authors state. “Bundled and flexible lifestyle packages can combine cyber, data privacy, and digital identity protections.

“Standard property policies could be supplemented with climate protections, including notifications and safety tips for policyholders in high-risk geographies.

“Sustainable services can also help reduce future risks, with claims payments providing options to rebuild better with, for example, materials that reduce flood or fire risk.”

Usage-based auto insurance, now offered by several carriers in Canada, could “include further growth of subscription models in parallel with increasing adoption of electric and autonomous vehicles,” the report points out.

Plus, in home insurance, “as smart home services become more popular, so will smarter insurance policies, including those with IoT [Internet of things]-connected sensors providing real-time data streams that alert customers and insurers to changing conditions that could lead to claims.”

Ideally, appealing personal lines offerings will be simple to understand, enrich the consumer’s experience by including some bonus offering they can use, and more flexible to the customer’s individual experiences, according to the authors.

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Open banking is yet another opportunity for insurers, the authors note.

“The evolution of data sharing and customer control under open finance legislation…means the rules around customer engagement are being rewritten,” the report states.

In Canada, the federal government passed the Consumer-Driven Banking Act last year, and sections of the law are effective today. The act establishes a framework within which consumers, including small businesses, can direct their data to be shared among participating banking and financial entities of their choice [i.e., fintechs] through application programming interfaces [APIs], while ensuring the sharing of data among participating entities is safe and secure.

One section of the act confirms Bank Act restrictions on banks “with respect to the sharing of information about a consumer with an insurance company, agent, or broker for the business of insurance” still applies.

That restriction — along with several other parts of the new act that deal with the application of the new law — are not yet in force, according to the federal government’s Justice Laws website. Currently, the law simply sets up the foundational structure for the oversight of open banking rules.

Feature image courtesy of iStock.com/Mohammed Haneefa Nizamudeen