INFORMATION EXCHANGE SHARING DATA SUPPORTS FAIRER TREATMENT OF CUSTOMERS It’s been 14 years since The Treating Customers Fairly (TCF) initiative was introduced. Back then the Financial Conduct Authority (FCA) was the FSA, motor insurance certificates were still sent out by post and aggregators were the new kids on the insurance block. A lot has happened in 14 years, not least significant advances in data and analytics to help the insurance sector understand risk more clearly. The view insurance providers had of their customers back in 2006 was limited by the lack of and sources of shared industry-specific data. Now, insurance providers can leverage a wide range of data attributes correlated to loss costs and cancellation rates to help meet each of the six consumer outcomes the FCA suggests firms ‘strive to achieve to ensure fair treatment of their customers’ . Products used by the motor market can now factor for an individual’s insurance history, rather than just how good they are at paying their financial commitments. But more than this, through data the industry has the opportunity to reposition itself as risk mitigators, helping make consumers whole in the event of a claim and serving them on a much more individually tailored basis. In a world changed by the COVID-19 pandemic, Treating Customers Fairly has taken on new meaning and having a clear view of the individual’s risk at each stage of the customer journey – from quote to claim – will be key to how insurance providers meet
their changing needs and expectations. ‘Outcome 1: Consumers can be confident they are dealing with firms where the fair treatment of customers is central to the corporate culture.’ This means knowing your customer, being transparent, and responsive to the customer’s needs. Utilising market-wide data on policy history rather than relying solely on the information the customer provides at point of quote, providers can deliver more accurate quotes and offer relevant additional products. For example, a new applicant has who never cancelled a motor policy in the past could be offered a discount at quote. It also helps smooth the claims journey and reduces the likelihood of claims being declined due to the policy being built upon inaccurate information. ‘Outcome 2: Products and services marketed and sold in the retail market are designed to meet the needs of identified consumer groups and are targeted accordingly.’ Being offered an irrelevant insurance product, or an inaccurately low initial quote only to potentially have it changed at bind, can have an irreversible impact on a consumer’s ability to trust that insurance provider. Employing accurate customer segmentation is key. This is made possible through data analysis and interrogation, coupled with the application of data enrichment at application and point of quote, pulling on market-wide contributed policy history data to provide accurate, individually tailored quotes. ‘Outcome 3: Consumers are provided with clear
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