Insurance news

Telematics applications have emerged as game-changing technology for the auto insurance industry. But while the uptake of the technology has steadily increased worldwide, carriers are also seeing rapid drop-off rates from app users, according to one telematics expert.

Also known as fleet tracking, telematics allows users to plot the movement of cars, trucks, and other vehicles using satellite technology and on-board diagnostics, a computer system inside a vehicle that tracks and regulates its performance. Carriers leverage this technology to make informed decisions about a driver’s risk.

Drivers are initially lured to telematics-based insurance policies on the promise of cheaper premiums. But poor engagement on carriers’ apps is leading users to quickly lose interest, said Andrew Brown-Allan (pictured below), executive vice president, growth (EMEA) at Insurance & Mobility Solutions (IMS).

“Several major insurers within North America are seeing some quite alarming drop-off rates or a lack of consistency, where a very high percentage of users drop out of app interaction after the first 30 days,” he told Insurance Business.

“Insurers are investing big in creating these programs to have a tool that becomes impotent after the first 30 days, and it’s a lost opportunity.”

The race for personalized insurance experiences

Smartphone apps have become the primary method of capturing telematics data as global insurers race to go to market with more personalized approaches to auto insurance policies.

The global market for usage-based insurance (UBI) is expected to reach US$67.8 billion (£53.4 billion) by 2032, growing at an astounding rate (CAGR of 29.2%), according to research firm Specialty Insights.

“The app is the center of around 90% of enacted insurance propositions that we’ve helped take to market over the past couple of years, and certainly 90% of the inbound demand that we experience on a daily basis internationally,” Brown-Allan said.

IMS is a vehicle and driving data provider that works with around 350 firms worldwide, including mobility operators, insurers, and governments.

Leveraging the application to create real engagement was “absolutely correlated” with a lower road risk in an individual driver, Brown-Allan added.

“The more engaged they are, the more likely they are to be attentive to this safety score,” he said. “The more attentive they are of the safety score, particularly if there’s something material in it for them to be safer and improve their score, the better their ultimate performance in loss terms, i.e., the lower their propensity to make a fault-based claim.”

“Scoring is boring” – why telematics app scores are poor motivators

At the same time, IMS has found aggregate safety scores on telematics apps to be a generally poor motivator for drivers.

IMS’ parent company, Trak Global Group, previously owned a UBI provider geared toward young UK drivers, called Carrot Insurance. The business was sold in 2021, but Brown-Allan said their learnings from Carrot helped inform IMS’ app engagement strategies.

“Through that period of 10 years, we found ourselves falling into the catchphrase of ‘scoring is boring,’” said Brown-Allan.

“If the center of your user interface is a list of journeys made, and the scores for each of those journeys contributing to an overall aggregate score, that’s really volatile when you first start using the app because the app doesn’t know anything about you,” Brown-Allan said.

“One trip it could be bad or contain some examples of speeding, and therefore you have a low score. But the next journey might be great. So, your aggregate score has a lot of volatility.

“In a relatively small number of weeks, your score starts to stabilize, and once you realize that you’re a seven out of 10, you recognize that your driving pattern doesn’t change much week on week. There’s very little compulsion for you to go back into that app because it doesn’t provide you with any new information. It remains very static, and I think a lot of the market is caught in that trap.”

Safety scoring also leads to self-selection among UBI users, in that safer drivers are more likely to gravitate towards the policies, while riskier drivers avoid them for fear of higher premiums.

“If you know you drive badly, then you’re probably not going to buy a telematics policy unless there’s a huge commercial incentive to do so,” Brown-Allan pointed out.

How can auto insurers do better with their telematics apps?

As the market for telematics and UBI policies grows, insurance companies need to create more differentiation between their apps to stay competitive. To keep users engaged, they must also take more control over user experience at both the interface and program level, according to IMS.

“We have a great opportunity to create a far stickier proposition and a far more secure relationship [with insureds] than a traditional non-telematics policy,” said Brown-Allan. “There are many, many more opportunities for touch points and interaction, but it’s about making those interactions the right quality, in the right variety, with the right frequency.

“It’s about making sure that you’re providing interventions and risk management information, promotions, and cross-sells that make the customer feel that they’ve bought into something that’s a truly connected insurance proposition, rather than just a static dashboard.”

Personalized coaching and content, as well as points schemes with retail partners, are powerful strategies for insurers to create engaging, rewarding experiences for their customers while improving their profitability.

“We certainly see that there’s a strong connection between a spend on rewards and an incentive budget with a return on investment in terms of an improvement of loss ratio,” said Brown-Allan.

“You essentially pay someone to drive safer, but they have fewer claims, so your loss ratio improves, and your profitability and combined operating ratio improve.”

Have thoughts on telematics apps and usage-based insurance? Share them in the comments below.

The commercial property insurance industry generated US$254.9 billion in 2022 and is projected to reach US$724 billion by 2032, with a compound annual growth rate (CAGR) of 11.3% from 2023 to 2032, according to a new report from Allied Market Research.

The growth of the commercial property insurance market is driven by factors such as increasing awareness of risk management among businesses, regulatory requirements mandating insurance coverage, and the rise in natural disasters and man-made incidents. Additionally, the expansion of businesses globally contributes to the demand for property insurance.

However, the market faces challenges such as insurance fraud, volatility in property values, and the complexities of underwriting large-scale properties, the report said. Despite these challenges, opportunities exist in the adoption of advanced technologies like artificial intelligence and data analytics for risk assessment, the development of customised insurance products, and the potential for market expansion in emerging economies with relatively low insurance penetration.

The COVID-19 pandemic has had a significant impact on the commercial property insurance market. Lockdowns and reduced activity resulted in a surge in claims for business interruption coverage, leading to disputes over coverage eligibility due to the requirement for physical property damage. Remote work, supply chain disruptions, and uncertain economic conditions prompted insurers to adjust premiums, coverage options, and underwriting practices, creating a more complex and challenging insurance environment.

Coverage market share

The open perils segment held the highest market share in 2022, accounting for approximately three-fifths of the global commercial property insurance market revenue, according to the report. This segment is projected to maintain its leadership status throughout the forecast period.

Offering multiple coverage alternatives can become a growth element as risks and requirements vary among firms. Additionally, the types of risks addressed by commercial properties may change as businesses expand and new sectors emerge, positively impacting market growth. The open perils segment is also expected to exhibit the fastest CAGR of 12.3% from 2023 to 2032. Organisations searching for comprehensive insurance solutions that protect against a wide range of dangers may be attracted to open perils coverage, contributing to market growth.

Distribution channels

The agents and brokers segment held the highest market share in 2022, accounting for over one-third of the global commercial property insurance market revenue. Agents and brokers evaluate specific risks faced by businesses, such as property location, construction type, and industry, among others. They customise commercial property insurance solutions that provide comprehensive coverage tailored to the specific risks encountered by each business.

However, the direct response segment is expected to exhibit the highest CAGR of 13.7% from 2022 to 2032. Commercial property insurance firms collect feedback from businesses that have interacted with their direct response platforms, which provides vital information on the user experience, accessibility of the platform, clarity of provided information, and areas for improvement.

Enterprise size

The large enterprises segment held the highest market share in 2022, accounting for approximately three-fifths of the global commercial property insurance market revenue. This is because large enterprises often engage dedicated risk management teams or consultants to identify and minimise risks, the report stated. They collaborate with insurance companies to establish customised coverage options tailored to their individual risk profiles.

However, the small and medium-sized enterprises segment is projected to exhibit the highest CAGR of 12.9% from 2023 to 2032. Workshops, seminars, and instructional campaigns can help SMEs understand the risks they face and the available coverage options, creating opportunities for corporate lending in the healthcare industry.

Industry verticals

The manufacturing segment held the highest market share in 2022, accounting for nearly one-fifth of the global commercial property insurance market revenue. This is due to the growing demand for equipment and technology finance in the healthcare industry to protect physical assets such as factories, warehouses, and machinery. Stricter regulations regarding safety standards and environmental protection drive manufacturers to invest in comprehensive insurance coverage to mitigate compliance risks.

However, the healthcare segment is expected to exhibit the highest CAGR of 16.4% from 2023 to 2032. The escalating value of medical equipment and technology necessitates protection against damage, theft, and breakdowns.

Regional breakdown

North America held the highest market share in 2022. However, Asia-Pacific is projected to post the greatest CAGR among the regions with 15% between 2023 and 2032, the report said.

Asia-Pacific is likely to dominate the market throughout the forecast period, with companies in the region focusing more heavily on risk management and loss mitigation, the report said.

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“Sometimes we might feel like regulatory change is something that is imposed on us. It can be very hard work and take a great deal of effort and resource. That said, I firmly believe we should see the opportunities that it also brings.”

Speaking with Insurance Business David Lever (pictured), senior customer experience strategy manager at RSA, highlighted how this is exemplified by the introduction of the Financial Conduct Authority’s (FCA) recent Consumer Duty standard, which came into force on July 31 this year.

Key for his team, he said, has been those addressing consumer understanding and support. RSA is also committed to improving the understanding of its communications with customers, including those who may struggle with numbers.

What is the “Plain Numbers” approach?

“Insurance is a numbers business,” Lever said, “and as part of our new Consumer Duty principles, we’ll now be putting numbers at the heart of enhancing our customer communications both through digital and more traditional channels.”

To assist with this, RSA has joined up with Plain Numbers – an organisation that has developed a tried and tested approach to improving consumer understanding. Lever noted that the Plain Numbers Approach was called out by the FCA in Consumer Duty as demonstrating “how seemingly small changes to communications can substantially increase comprehension among consumers.”

“What Plain Numbers do is support organisations such as ourselves in improving the understanding with our customers by the way we communicate our numbers,” he said. “So this could be the level of cover you’ll have and how much it will cost, as well as any claims figures further down the line. It really puts numbers at the centre of customer understanding.

“While I’m lead Plain Numbers Practitioner, we have a growing number of new Practitioners across the business through training and accreditation as part of our partnership. So, Practitioners like myself will be able to recognise communication through any channel where there’s the potential that applying the Plain Numbers approach will improve consumers’ understanding around that offering.”

Applications of the Plain Numbers approach for insurance companies

The applications of this are endless in the context of a financial services business, he said, among them, for example, ensuring that customers understand the critical numbers at the point of renewal. These figures should be presented based on what’s most important to the customer. For example, the cost this year compared to last, whether any difference can then be considered fairly – and what’s driving that difference, whether it’s inflation or a claim on the policy – and what’s the simplest and most cost-effective way for them to pay.

“It’s about looking at the way we present the numbers and presenting them in a way that the customer understands and which allows them to make informed decisions,” he said. “Poor numeracy is a big problem in the UK, causing one in five people to experience ‘maths anxiety’ when forced to deal with numbers. It’s quite difficult to pick up in our customer insight as it’s very much an invisible vulnerability, with people less likely to admit they don’t understand numbers.”

Removing the stigma around numeracy 

Statistics show that at least half of the UK working population struggle with numbers in some capacity, Lever said, but when you listen to RSA’s call analytics, the language used by consumers would rarely suggest that struggle. Because of the stigma around numeracy, it’s difficult for customers to admit when they’re facing an issue.

“Research by the FCA back in 2015 suggested that 20 million people in the UK have poor numeracy skills,” he said. “And coming in lower than that you see concerns like mental health issues, physical disability, dementia etc. – all things we see in our customer insight, but we don’t see the problems with numeracy.”

The Plain Numbers Approach doesn’t just improve the numbers, however. What RSA has found, he said, is that when you reshape the way numbers are presented, it better informs policy wordings as well by bringing both parts of the equation together.

“Something else I’m quite excited to be working on going forward is applying the Plain Numbers Approach internally,” he said. “Across all the vulnerable customer work we’ve done, we present our training and seminars etc. to our colleagues with a view to them understanding how customers are going to feel in those situations. But we also bring it back to our staff and how they might be feeling that way as well.

“I think if we can really embed that Plain Numbers way of thinking into our business it could be transformational for us. I’m keen to see where we go from here as one of the fundamentals of Consumer Duty is understanding how customers are interacting with our products and making choices in the real world. And that’s about the numbers.”

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Each year, from 18 July to 17 August, a month long celebration takes place marking South Asian Heritage Month. In September East and South East Asian (ESEA) heritage month is marked, while October is widely celebrated as Black History Month. Virtually every month of the year marks some form of awareness month, but why do we have them at all?

Many awareness months are borne out of historical significance. June is synonymous with Pride month, because the Stonewall Riots, a watermark moment in the history of the LGBTQ+ community, took place in June 1969. In the UK, the first Black History Month was celebrated in October 1987 to mark the 150th anniversary of Caribbean emancipation. South Asian Heritage Month (SAHM), begins on 18 July to mark the anniversary of the Indian Independence Act gaining royal assent in 1947, and the month ends on August 17, being the date of publication of the Radcliffe Line, marking the borders of India, West Pakistan and East Pakistan (now Bangladesh).

The historical significance of these months gives the first clue as to their importance in the cultural calendar. They are an opportunity to connect with the past.  Britain has a long legacy associated with many of the countries involved in SAHM, and the South Asian diaspora is the UK’s largest ethnic minority group, estimated at approximately 5.5m, or 9.3% of the population. Nearly one in five Londoners has South Asian heritage.

Jimmy Kumar, our iCAN Birmingham lead and senior client executive at Marsh told us:

“South Asian Heritage month is all about celebrating culture, uniting communities and sharing our stories. Not only do we commemorate the hardship, struggles and sacrifices made by our ancestors but rejoice the rich values, traditions and the sense of identity instilled over many generations. It’s a time to celebrate, commemorate and educate.”

The South Asian diaspora’s contribution to UK culture is ubiquitous, and another reason for the importance of SAHM. South Asian culture is apparent in so many aspects of our lives today, from literature, to clothing, music to food. Even our common language of English is studded with words of South Asian heritage; from “buggy” to “bungalow” to “bangles”, from “punch” to “pyjamas”, or “shawls” to “shampoo”. The opportunity to shine a spotlight on what it means to be British and (South) Asian is a central part of the month, as relayed to us by iCAN Mentoring co-lead Enamul Islam:

“South Asian heritage is so important for me. My cultural background has played a significant role in shaping my career ambitions, my determination to achieve goals, my sense of community and numerous other qualities. As a first-generation British. I have the privilege of embracing and honouring the remarkable heritage of South Asia, while also embracing and cherishing my British values”

The specific timeframes allocated to these awareness months provide a dedicated period for introspection, education, and appreciation. They offer a platform for individuals to delve into the complexities of various cultures, histories, and experiences that have shaped our present. These designated months invite everyone to take a collective journey of learning, dismantling stereotypes, and breaking down barriers. By shining a spotlight on the contributions and experiences of marginalised or underrepresented communities, we work toward a more inclusive society where differences are celebrated rather than marginalised.

At iCAN, we firmly believe that celebrating these diverse backgrounds alongside individuals from all cultures fosters greater understanding. Culture, like business, is forever evolving, enriched by the multiplicity of voices and contributions of all its participants and interwoven into the fabric of society.

Over the next three months, we are busy promoting and hosting events that celebrate the richness of cultural diversity, from our celebration at Marsh of South Asian culture through Dance and Music, and our East and South East Asian Communities Launch event “Roots and Routes” at Convex in September, to the iCAN Black Owned Market event sponsored by BMS Group and Tokio Marine Kiln in October.  These events underscore our commitment to acknowledging our cultural legacies.

In recent months, Keoghs – the legal solutions arm of Davies – has gone from strength to strength, opening a new office in Leeds, reinforcing its team in Scotland and bolstering its credit hire offering with the recruitment of a new partner and team from Plexus Law.

Discussing the trajectory of the business and the next steps on its growth agenda, Andrew Evans (pictured), head of Keoghs’ corporate & sector risk (CSR) practice, highlighted the role having a differentiated claims proposition has played in the business’s success to date. Keoghs started building its proposition in the 2000s, he said, and was first to market with a fully single-source, cross-class claims and litigation solution.

Keoghs growth

That forerunner advantage has paid dividends in the long run, Evans said, as evidenced by Keoghs’ steady growth trajectory amid the current tumult of the legal solutions market.

“It has been a turbulent market for the last two or three years, from a provider’s point of view,” he said. “Historically, our biggest two competitors have been BLM and Plexus. BLM merged with Clyde & Co last year and through that merger, we brought their Liverpool office into our CSR division. That included 21 individuals with a new sector leader, allowing us to diversify into construction and aviation. So that broke up that competitor to some degree and we’ve taken some business from Clyde since the merger.”

Meanwhile, Plexus has been in the news lately, filing a second notice of intention to appoint administrators in late June before it was bought out of administration by Axiom Ince Limited in July. Keoghs recruited a new partner in Anne Chapman from Plexus who brought with her a team of five – all of whom sit within Keoghs’ Tactical Credit Hire division. These movements show the upheaval in the market, he said – a market that is also welcoming new entrants trying to establish their own single-source claims solutions.

“That’s happening because the market recognises that having one solution for all of their claims makes it a lot easier to manage them, to control leakage and, more importantly, to create efficiencies that allow significant savings in claims spend,” he said. “Wherever we’ve taken in new business from a standalone TPA with lawyers and put it into our teams, where the legal team is joined up and acting on the same clients, clients are typically saving double digits on their claims spend.”

Focus on retail

Evans noted that this offering is what has differentiated Keoghs until now and enabled it to support some of the biggest companies in the UK, particularly in retail. Retail is Keoghs’ biggest sector, he said, and it’s now estimated that the firm acts on behalf of over 55% of claims against retailers in the UK. With the data generated from that, the business is able to monitor claims performance and make that bespoke to the individual claims dynamic of any corporate.

“That saves them a lot of money,” he said, “but also that good practice around claims informs their risk management strategies and helps protect them reputationally because if all their models are on the front foot, they’re able to intervene on claims early and manage them in the right way, in accordance with their own claims philosophies.

“And for the brokers and insurers, when the premium is taken to market, they’ve got a much clearer sight around what’s actually going on within their risk, allowing them to place it better, make premium savings and even start to think about more innovative structures and solutions – in the knowledge that the volume and the noise around claims is under control.”

Importance of claims

The idea of claims as the proof-point of an insurance purchase is growing amid changing consumer expectations and increased efficiency drives from insurance businesses. There is an increased understanding that effective claims management is a real opportunity for differentiation, Evans said, and he’s seeing this reflected in his conversations with senior executives working with some global brokers.

“I think if you push them, they do accept that perhaps for too many years now, they’ve thought about claims as a separate issue,” he said. “Whereas I think they now understand that if they want to differentiate within their market, they have to look at all aspects of the total cost of risk.

“[…] I think the industry hasn’t ever really thought enough about how they can actually ring-fence claims spend and bring it down. Now that they’re realising they can do that – but equally that they need to have the data that enables them do that – I think it’s becoming more attractive to them.”

That opportunity is bringing in more players to Keoghs’ ecosystem who are looking to build single-source solutions, but Evans noted that it’s easier said than done. With that in mind, Keoghs has no intention of resting on its laurels, he said, and will continue to capitalise on the lead of its first-mover advantage.

“What differentiates Keoghs’ corporate risk offering even further from our competitors, however, is the opportunity we have to capitalise on all of our capability across Davies,” he said. “Where applicable, this means we can tap into the solutions from the wider business and truly offer end-to-end, one-supplier incident and claims solutions for our clients – alongside innovative insurance programme solutioning.  

“This unique market position allows to bring to market new ideas and solutions, that don’t just help reduce claims spend, and the total cost of risk but they also offer support with the release of capital from the balance sheet.”

On average, the business has seen year-on-year organic growth in the double digits, Evans said, and he expects especially strong results this year considering its acquisitions and rapid expansion.

“But that’s only one part of the story,” he said. “The reason why we are where we are today is that we decided many years ago that we would be very clear in our understanding around our product. We are lawyers and therefore our product has to deliver quality and client satisfaction. And that is more important to us than anything else because, to most of our clients, that reputation is probably worth more than any financial consideration.

“So, if we all get all those bits about reputation, control and being on the front foot of making sure that the claims experience is right, then that’s what matters most.”

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Global reinsurers are reducing their coverage for medium-sized natural catastrophe risks, according to a report by Fitch Ratings.

This shift is primarily attributed to investor pressure following years of significant catastrophe losses and improved profitability in other sectors of the market, according to Fitch. Even the strongest reinsurers have scaled back their involvement, primarily by tightening their terms and conditions to limit their exposure to aggregate covers and lower layers of natural catastrophe protection. As a result, primary insurers now find themselves with less protection against secondary peril events.

However, reinsurers still offer substantial coverage for the most severe events, Fitch reported. This recent development in the reinsurance market indicates a return to its pre-soft market state, where the focus is on providing capital protection for cedents rather than earnings protection.

The natural catastrophe business has proven to be unprofitable in recent years, as prices have failed to keep up with the increasing frequency, severity, and volatility of weather-related losses caused by climate change. This has significantly diminished reinsurers’ willingness to provide natural catastrophe coverage, especially since other business lines are experiencing price increases that outpace claims inflation. The implementation of tighter terms and conditions for natural catastrophe cover is considered a structural improvement that will enhance reinsurers’ risk profiles in the medium term, Fitch said. These changes are unlikely to be swiftly reversed, even when market conditions change.

According to Aon, insured natural catastrophe costs reached US$53 billion globally in the first half of 2023, which is 47% higher than the 20-year average. Despite this, the 18 non-life reinsurers monitored by Fitch reported robust underwriting profitability in the same period, with an aggregate reinsurance combined ratio of 88%. This positive outcome was driven by price increases in many business lines that surpassed claims inflation, as well as a reduced burden from natural catastrophes as cedents retained more losses themselves. The aggregate ratio also includes moderate losses of 6.7 percentage points from natural catastrophes.

On the other hand, life reinsurance profits have returned to pre-pandemic levels due to significantly lower excess mortality claims related to the pandemic, Fitch reported. Additionally, the performance of investments has benefited from a rebound in equity markets and higher reinvestment rates as interest rates stabilised at higher levels.

The renewals in June and July 2023 showed continued momentum in reinsurance pricing. The US property-catastrophe markets experienced the most significant price increases, ranging from 30% to 75% for loss-hit business and 10% to 40% for loss-free business. In contrast, premium rates for casualty lines remained relatively stable, reflecting the greater capacity allocated to them.

Fitch expects reinsurers to maintain strong underwriting discipline despite higher interest rates, and the hardening of the reinsurance market is anticipated to persist into 2024. However, future price increases are expected to be more moderate compared to 2023, as rate adequacy has generally been achieved through several rounds of hardening since 2018.

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As high inflation and continued cost-of-living pressures continue to bite the balance sheets and budgets of insurance businesses and insurance customers alike, attention is turning towards the link between recessionary times and increased fraud. And while it shouldn’t take recessionary rumblings for insurance fraud to take its rightful place high on risk registers, all too often it does. 

Offering his insights into where the insurance fraud landscape sits today, Rory Yates (pictured), global strategic lead at EIS, emphasised the variety and interconnectivity of the factors at play. Inflation, the fuel crisis, geopolitical tensions, global food shortages and ongoing economic uncertainty are all pain points for the market, he said, and they’re playing out against a backdrop of rapid technological changes enabling complex fraud capabilities.

Take the UK, for example, he said – it’s projected that only £1 billion of the £3 billion lost to fraud each year is even detected. A glance at some of the numbers revealing the scale of the fraud issue globally offers insight not just into the size of the challenge, but also the size of the opportunity it presents to the market. However, he highlighted the importance of recognising that this opportunity is not just about potential cost savings or increasing efficiencies but also has significant implications for making customers’ and claims handlers’ lives easier and better.

Cost-of-living impact on insurance fraud

Interestingly, Yates said, the cost-of-living crisis is not just lending itself to an uptick in opportunistic insurance fraud but also to increased consumer understanding of the impact fraud has on their premiums. And while there’s a significant behavioural science aspect to insurance generally, it becomes particularly clear in the context of insurance fraud.

Where Yates feels some elements of the insurance ecosystem have let consumers down in the past is when it comes to building strong customer relationships founded on a mutual understanding of the faciliatory role insurance plays in communities and societies.

“Up until now, [insurance] technology has let the side down,” he said. “Principally, because within the technology, fraud is essentially done on the side which means it’s disruptive and interruptive to the insurance journey. It hasn’t looked to create that seamless, continuous anti-fraud operation sitting behind every customer interaction that is required.

“Whereas the fraud detection capabilities within our platform – and indeed the wider market – are fully integrated. They’re engineered to be orchestrated into the experience in a way which means you really are creating the best possible path for the best possible people.”

Detecting insurance fraud

Having a high success rate for detection services is important, he said, as it means you’re not inconveniencing legitimate customers in your quest to root out fraud. But even if a follow-up or more information is required, the right fraud detection service will not be disruptive to customers during their insurance journey but rather part of a seamless experience. This allows insurance companies to live out the principle of customers being innocent until proven guilty but also prevents them from losing customers who feel they have been unfairly maligned.

“The reality is that when it comes to opportunistic fraud, you’ve got to assume that a percentage of it is also customers just trying it out,” he said. “They’re thinking ‘maybe if I just ask for it, it will turn out I am eligible’. I’m not saying that ‘give it a go’ approach is without fault, but if you look at a typical insurance policy, as consumers, we don’t really understand what the terms and conditions actually are.

“We haven’t read the 300-page document, and anyway, it wasn’t written in English, it was written in legalese. Again, technology can overcome all of that. Even from my own experience, I have dyslexia and I’ve overcome that in all sorts of ways, often by using technology to do it. And that technology could be provided by the insurer while you’re buying your insurance online. There are all sorts of great technologies that can make it clear what you’re actually eligible for.”

Continuing the insurance journey

Where is the continuous experience in insurance? Yates asked. Beyond the point of purchase, the only time most customers hear from their insurance provider is at the point of a claim. He pinpointed the pervading myth, which is largely touted by the more mature end of the insurance technology ecosystem – that a great insurance experience is when you don’t hear from your insurer.

He understands where that mentality comes from, Yates said, and that it has its roots in the idea that this is indicative of a seamless experience.

“But I’m not an advocate of that mentality,” he said. “I think actually what insurers have to do is the opposite, to form really deep, meaningful relationships with customers because, increasingly, they’re having to be adaptive to people’s lives. I’m always hearing of claims experiences where people weren’t trying to be opportunistic but simply didn’t know what they had to provide to make a claim… And that to me is not a fair way of suggesting somebody has committed fraud.

“I feel like we’re at a tipping point moment because I think there’s enough reason to suggest that the barriers to insurers being good about fraud are no longer there, they just aren’t investing in [fraud capabilities] enough as a strategic asset. And I don’t think insurers should get let off as much as perhaps they have been in this space.”

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Insurtech MGA Qlaims has announced some further enhancements to its commercial lines claims assistance services. These changes will make the MGA’s Qlaims Insurance for Businesses easier to add to commercial property insurances and with a wider scope, now offering support for clients through new subsidence claims.

These enhancements are aimed at supporting brokers with consumer duty through easier access for cover and less overall barriers. The Qlaims Insurance for Business also provides additional value-add cover, in addition to providing clients with their own claims specialist to prepare and manage their claims for property damage and business interruption above a certain threshold.

The changes will also apply to Qlaims’ home product, which was updated in July, and with a new more competitive rating. It also comes with the partnership with Prestige Underwriting, a collaboration that will provide the latter’s 30,000 Coverall and Thatch clients with Qlaims Insurance as a part of the updated policy wording being launched this month.

“These changes are a key part of our strategy to make this cover more accessible to clients,” said Qlaims CEO Liz Latter (pictured). “The cover must be simple to attach to underlying insurances, without additional barriers around risk or client eligibility.

“Acting on feedback from our brokers we have now also included cover for new subsidence claims; and widened our geographical footprint to risks based in Northern Ireland. To enable brokers to add Qlaims Insurance easily, we understand the cover needs to be price competitive and wide, to complement the underlying policy,” she said.

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The insurance-linked securities (ILS) market displayed impressive strength and performance in the first half of 2023, experiencing a record-breaking influx of new issuances, according to a new report from Swiss Re. However, it is worth noting that capital appears to be more disciplined in this period.

According to Swiss Re’s latest ILS Market Insights Report, concerns arose regarding the capacity of the alternative capital sphere to meet demand after Hurricane Ian struck in the third quarter of 2022. This led to a dislocated ILS market at the beginning of the year. Nevertheless, investors worldwide recognized an opportunity and successfully raised funds.

During the first half of 2023, the new issue market shattered records in terms of absolute notional value and the number of deals, the report found. A staggering amount of nearly $9.85 billion was issued. This level of activity in the primary market has been unprecedented, even when compared to historical annual issuance. In fact, the amount issued in the first six months of this year has already surpassed the total issuance for the entire year of 2022. As a result, 2023 is on track to become the fourth highest year for new issuance, Swiss Re said.

The report also highlighted the cat bond market as an alternative and complementary option to the traditional (re)insurance market, particularly during its hardening phase. Notably, the primary market experienced significant activity from both repeat sponsors and new entrants. Six unique first-time sponsors joined the market in the first half of 2023, bringing a diverse range of risks, such as US wind and New Zealand earthquake, to the forefront, Swiss Re reported.

Additionally, the Swiss Re Global Cat Bond Total Return Index achieved remarkable success, mirroring the primary market’s performance. It generated an impressive return of 10.34% since the beginning of 2023, marking a record-breaking six-month period.

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