Articles - Mobile Video Technology changes the game for home insurance


A couple I know were burgled before Easter. It was a professional job - the burglars left the bleach and cloths they used to wipe away their fingerprints. It was blatant, in broad daylight, smashing through a locked bi-fold door. Like most home insurance claimants this couple had insured their home contents year after year without really giving thought to the value of what they owned. Now they have begun the long and painful process of working out what was lost and reaching settlement with their insurer.

 By Becky Downing, CEO and Founder, buzzvault

 According to the ABI, 28% of homes don’t have contents insurance and around 1 in 5 home insurance claims are not paid. This compares very poorly to motor insurance, where 98% of claims are paid. 

 The fundamental problem is that this is an area of insurance where the insurer does not know what it is insuring. And then, if they do need to claim, customers must come up with an inventory after they’ve lost their things. This results in a poor claims experience for too many people at an already stressful time in their lives.

 Also, insurers expect customers to answer a whole raft of over-complicated questions and come up, as if by magic, with a broad estimate of the worth of their possessions.

 For the home insurance sector, much time and resource is spent validating claims - to reduce the risk of fraud and lower claims losses. This is a vicious circle, alienating honest customers, building mistrust in the industry and feeding the problem of opportunistic fraud in the first place. Just recently, CIFAS revealed that fraudulent claims in household insurance have increased by 52%, with claimants aged 31-40 the biggest culprits.
 
 If the sector started from a point of knowledge, using validated data on exactly what is being insured where, then many of the problems within home insurance would be solved. Much of the customer dissatisfaction with current claims processes stems from the complete mismatch between what they expect their insurance to cover and what their insurance covers in reality.

 Getting customers to engage with home insurance means we need to remove the complexity and make it easy for them to insure exactly what they own.

 Mobile video technology has a central role to play in improving the experience. Imagine an app that uses this technology to link householders with a certified surveyor and then captures their contents data to create a secure digital inventory of everything they own, with values assigned. This data could form the basis of their home insurance meaning that their insurance cover accurately reflects what they own and at claim the customer’s losses can be validated and settled at speed. Home insurance suddenly becomes hyper personalised to each customer.

 The insurance provider would be allowed secure customer-approved access to a digital list of the items covered by their policy. And, courtesy of the video technology they would have access to extra insights such as information on the pre-loss condition of items and their context both within the house and in relation to one another.

 Access to contents data would offer greater transparency, and a clear informational advantage, when it comes to evaluating and processing claims - especially with more complicated loss events. All of which means claims can be progressed in a way that’s both swifter and less onerous for customers.

 So, what’s to stop a customer taking a video of their friend’s 42-inch plasma-screen TV? This is where a link with a certified surveyor comes in. Having a surveyor-authored video would not only ensure all home contents data is accurately recorded, it provides independent validation, at the point of claim, that the items lost were indeed part of the household contents.

 It sounds simple but the technology behind this kind of insurance solution is complex. However, this removes complexity for the customer, which builds trust. Right now, home insurers are under immense scrutiny due to dual pricing, a widespread belief that claims will not be paid regardless, and analogue, paper-based processes.

 Increasingly, digital-savvy consumers won’t put up with this status quo – they will look for better, smarter, easier alternatives. At the end of the day, it’s as much about giving customers an informational advantage as it is insurers. And this advantage can only grow over time, for all parties, as disruptors in the home insurance sector search for new rating factors to better price and understand customers based on their home contents data.
  

 1  https://www.abi.org.uk/globalassets/files/publications/public/key-facts/key_facts_2018.pdf
    https://www.abi.org.uk/data-and-resources/industry-data/claims-acceptance-rates/
 2  https://www.cifas.org.uk/newsroom/household-motor-insurance

  

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