68% of homeowners in study say it’s acceptable to omit or adjust application information to keep costs low

19/02/2018

LONDON – A detailed study of the home insurance market by LexisNexis Risk Solutions UK¹ has underlined the need for home insurers to strengthen their validation processes and improve their customers’ experience by leveraging prefill at the application stage. In the study, 68% of 1500 homeowners said they believe it is acceptable to omit or adjust information in their application to keep their insurance premiums low. At the same time, 61% worry they might accidentally omit something in their application, and 25% believe that their claim should be covered, even if the information they provided when they applied was not completely accurate.

Strengthening the validation process will help tackle the problem of misrepresentation and fraud and speed up what is commonly a lengthy question process to obtain an accurate quote.

The number of questions asked at point of application means drop-off rates can be high, especially when customers find it difficult to answer certain questions. As a consequence, 64% of home insurers surveyed by LexisNexis Risk Solutions said they believe that automatically prefilling key property data during the application process is extremely or very valuable. 

Insurance customers overwhelmingly support this idea – with 85% of homeowners in the study saying that they would like to see information on their property pre-filled when they apply for home insurance, to make the process easier. Also, 87% said the application process would be improved if the number of questions asked were reduced, with ten questions as an ideal number. Most importantly the majority of respondents said they were willing to share their property data to enable prefill.

Jay Borkakoti, Director of Home Insurance, UK and Ireland, LexisNexis Risk Solutions, said: “Clearly, the more data that can be prefilled at the point of application, the fewer questions consumers need to answer, which improves their experience with buying home insurance.”

In the LexisNexis study, when home insurers were asked to rank in importance the data sources that would be most valuable in assessing risk at the application stage, unsurprisingly, past claims data ranked first.  Interestingly, data on other occupants in the home ranked almost equal in importance to personal data on the homeowner.  This points to the fact that some of the sector’s most significant losses can stem from incidents caused by the home occupants.

Most important data sources of the future according to home insurers

1. Past claims 75%
2. Other occupants in the home 65%
3. Personal data on the homeowner 64%
4. Other perils 62%
5. Flood data 59%
   _{Source: LexisNexis Risk Solutions}

Jay Borkakoti continues: “Given the appetite from consumers for prefill, coupled with the insurance provider appetite for improved data sources, such as better past claims data, information on occupants and the home owners, we believe there is a strong opportunity for more market-wide contributory datasets to help assess risk.

“This is certainly a development that LexisNexis Risk Solutions is keen to support. The apparent willingness of consumers to share their data in exchange for more accurate premiums and an enhanced application experience, means there is a clear competitive advantage to be gained by leveraging data in prefill and risk assessment at the application stage.”

About LexisNexis Risk Solutions

LexisNexis® Risk Solutions harnesses the power of data, sophisticated analytics platforms and technology solutions to provide insights that help businesses across multiple industries and governmental entities reduce risk and improve decisions to benefit people around the globe. Headquartered in metro Atlanta, Georgia, we have offices throughout the world and are part of RELX (LSE: REL/NYSE: RELX), a global provider of information-based analytics and decision tools for professional and business customers. For more information, please visit LexisNexis Risk Solutions and RELX.

 1 Research Methodology:
In January 2017, LexisNexis Risk Solutions completed a comprehensive study on how digitisation is affecting UK home insurers. Using a mixed mode of online panel and telephone interviews, we collected data from 52 personal home insurance professionals. To take part in the survey, they had to spend at least 30% of their time in underwriting-related activities. Where appropriate, we compared home insurer views with those of 1,500 UK homeowners who were surveyed separately by LexisNexis Risk Solutions between 25th January and 1st February 2017. In both studies, LexisNexis was not identified as the sponsor.