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Risk mitigation and the cooperative insurance customer

Interesting survey results from Bain via P&C Specialist suggest that far more than prior generations millennial consumers are expecting their carriers to do more than simply pay claims, they want help preventing damage from happening. This offers carriers an opportunity to find and target the high value cooperative insurance customer.

“Overall, about 60% to 70% of customers expressed interest in using risk prevention services from their home and auto insurers, respectively, and I think in part this has increased in importance,” Senior Partner Keith Donnelly said. The trend is more pronounced in Millennials than among groups such as Gen Xers and Baby Boomers, he noted.

“The time to close a claim and restore a customer’s life has lengthened after the onset of the pandemic due to supply chain disruptions, so that it’s even more important now to not just have your life restored, but if you could not have that disruption in the first place, that’s even better,” Donnelly said.

We think they’re right but the article neglects an aspect of this trend that we at VeracityID believe will be very important for carriers going forward:  Risk discovery.  By engaging customers in risk mitigation activities during application, carriers can better understand the underlying risks of the assets they underwrite.  There are two reasons:

First, the act of documenting an important feature like the existence and operation of an alarm system gives carriers useful information about the relative risk level faced by that asset.

Second and perhaps even more importantly, simply the willingness of an insurance customer to take the time to go through a self-service risk mitigation process is a powerful indicator of their overall cooperativeness and conscientiousness. We have found that this customer behavior is – under certain circumstances – highly correlated to lower loss experience.

It turns out that the cooperative customer is usually the best customer type. But the key is finding low cost, low friction ways to help them efficiently gather risk details and give them valuable mitigation reasons to want to do so. To that end VeracityID has developed a suite of tools that can be deployed during the auto insurance application process to document various aspects of risk. We are currently adapting those tools and other third-party tools to deliver a complete suite that integrates with our idFusion Risk Detection and Selection platform.

We believe that Risk Identification and Risk Mitigation to maximize the value of the cooperative insurance customer will be key to superior Personal Lines carrier performance going forward.


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