LONDON — Motor insurance providers urgently need to create greater clarity and trust around the use of accident and claims data in pricing motor insurance policies. After conducting a study of 15001 UK motorists regarding claims reporting, LexisNexis Risk Solutions found that - 58% of responding motorists said they would not inform their motor insurance provider about a minor accident if repairs cost less than their policy excess, with 60% of those surveyed thinking this would lead directly to a policy price increase. In addition, consumers are now less willing than they were three years ago for their full claims history to be used for pricing.
The study found only 21% of consumers would ‘definitely’ or ‘probably’ report a minor incident to their motor insurance provider. In addition, only one in three (33%) would report a minor, non-claim incident involving another vehicle.
The older the driver the less likely they are to report the incident - almost three quarters of older consumers would not report such an incident.
Although 87% of consumers think the number of accidents in which a driver has been involved during the previous three years should have an impact on the price of their insurance, consumers are now less comfortable about disclosing information on the number of claims an individual has ever made to help pricing. The proportion of respondents in favour of using this information has fallen from 82% in 2013 to 62% today.
LexisNexis Risk Solutions also found that while the vast majority (85%) think loyalty should be rewarded, 61% thought discounts could be offered to consumers buying directly from the provider, rather than via price comparison websites. Consumers in the youngest age groups are particularly keen for direct purchasing to be rewarded; 62% also felt motor insurance providers should offer discounts to consumers who they think are likely to buy multiple products from them.
James Burton, Product Director for LexisNexis Risk Solutions, said: “Motorists are on guard and reticent to share accident information, no matter how significant, which is often a requirement of the policy. This is creating a cover-up culture that insurance providers need to address. First, by providing much greater transparency over pricing, such as when claims actually cause premiums to rise, to help build trust with customers. Additionally, consumers would like to be rewarded for sticking with a provider. This environment highlights the importance of applying accurate data at point of quote and renewal to build the fullest picture of the customer to improve pricing accuracy and competitiveness, as well as, to appeal to consumers’ expectations that their loyalty should be rewarded.”
LexisNexis® Risk Solutions harnesses the power of data and advanced analytics to provide insights that help businesses and governmental entities reduce risk and improve decisions to benefit people around the globe. We provide data and technology solutions for a wide range of industries including insurance, financial services, healthcare and government. 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.