Keeping up with the auto insurance industry when it comes to online quoting services has been challenging for homeowners insurers. The amount of information required to underwrite a homeowners insurance policy far outweighs that of an auto insurance policy, making it difficult for carriers to provide a satisfactory customer experience online.
While consumer-led online quoting for homeowners coverage takes shape, agents worry about their role in the underwriting equation.
Insurers have turned to companies like CoreLogic and LexisNexis to help them implement systems that capture and prefill all the mandatory policy data like age of the home, building permit information, and records of home upgrades. These companies also provide geographic information such as weather and distance to fire stations so the risk can be accurately priced.
Alex Tsetsenekos, vice president and general manager of homeowners insurance for LexisNexis in Alpharetta, Ga., says with the home buying population now including tech-savy Generation Y’ers the quoting age is going down and the demand for online services will increase. To stay competitive, carriers need to utilize systems that keep the process short and sweet.
“The average person is not going to sit there for 30 minutes answering 100 questions to see if they get a quote they want,” says Tsetsenekos. “There are data aspects that can be delivered and automated in a quicker fashion to deliver a quote in seven to eight minutes.”
However, a major complaint and fear of agents is the loss of personal relationships they have with their clients. Experts say that doesn’t have to be the case – agents just have to find other ways to showcase their value – and the platforms are out there for them to do so.
New Social Tool for Homeowners Agents
Tom O’Brien, vice president of Karen Clark & Co., an independent risk management consulting firm in Boston, Mass., says the company has been developing ways to best implement prefill options for consumers and keep homeowners insurance agents involved in the process.
Last year the company launched YourHomeStuff.com as a pilot site with the intent of simplifying the process for homeowners to get competitive insurance quotes. Now, it is launching a revamped and renamed version called Nestwork.com that will work as a social network site connecting consumers with home improvement and home insurance specialists.
Nestwork.com will be a platform for consumers to recommend local home resources, like contractors and insurance agents, to their friends and be a tool for agents to get more business.
“We don’t want to replace the face-to-face interaction, but we are making that initial contact and creating a place where that interaction can happen later,” says O’Brien.
Agents who want to be on the site can register starting this week through nestworkpro.com and create a profile. The Karen Clark team will verify they are an agency and make them visible to consumers looking for homeowners insurance quotes in their area once nestwork.com goes live the first week of January. Once signed up on the site, agents can also enlist their clients to join and ask to be recommended to their friends. Consumers who register on their own can list their favorite professionals like their insurance agent for their friends to see. The site is free to everyone who uses it.
O’Brien said part of the company’s mission has always been to address the issue of capturing homeowner data, use it to analyze exposures to events like hurricanes and earthquakes, and make it accessible to homeowners and insurers.
Moving the original site in this direction was more in line with that mission and fills a need within the homeowners market to make online options more engaging.
“Homeowners insurance hasn’t automated as aggressively to an online approach [as auto insurance] but in our estimation it’s only a matter of time,” says O’Brien. “We thought we should take advantage of it and provide a platform to do that.”
O’Brien says they spent a lot of time on simplifying the details that the consumer has to input when submitting a quote request so the process would be easy. Nestwork.com will use a variety of services to prefill the data.
“The information is out there and it’s available so it makes sense for us to prefill it for the consumer,” he says. “And with tying it into the home improvement side, if someone does renovation on their roof or updates a home system or does an addition, we can also capture that info and use that to prompt the user to get a quote or update their policy to keep it current.”
Data Capture Services and Their Value
LexisNexis’ Tsetsenekos says keeping the experience simple and convenient is essential to a consumer choosing a certain carriers’ system. That’s why they recently partnered with BuildFax, a source of building permit data, to provide “age of roof” information to carriers.
“From a customer experience standpoint, it’s one less thing to ask a customer and they don’t have to go through a filing cabinet,” says Tsetsenekos.
Because LexisNexis already has the interfaces built with hundreds of insurance carriers, adding one more element is not difficult to implement.
Tsetsenekos says going forward a big focus for the company will be on by-peril modeling and building analytical models to help carriers predict when there is a higher probability of a wind or hail event occurring in a specific geography. The company hopes to launch those tools in the late summer to early fall of 2013.
Dr. Howard Botts, vice president and director of database development for CoreLogic Spatial Solutions, says the information they provide like wildfire, hail, earthquake, tornado or other natural peril risks, gives carriers a whole picture of a property in any geographic region.
Because the information is updated so regularly, carriers who are moving to by-peril ratings see value in this data because they can keep their books profitable in a segment that hasn’t been for quite some time.
“As they go to online underwriting models our data plays in very well and becomes a factor in pricing and the underwriting model,” says Botts.
Botts says consumers sometimes have the inaccurate assumption that the more the carrier knows about them the more they will be charged, but that hasn’t actually been the case for most. For a large number of customers it’s a significant cost reduction because it is risk-based, he says.
Letting consumers know how they can see more cost savings is also where agents can demonstrate their value, says Botts.
“The interesting thing we have found is consumers are more aware of their risk now and they talk to an agent,” he says. “Even before people buy a home they are looking at what are the characteristics and talking to agents and getting quotes.”
Tsetsenekos says while the days of an agent sitting at their desk with the client filling out a traditional underwriting questionnaire may be short-lived, agents should use these new tools to their advantage.
“Insurance to me is a product that requires some sort of trusted advisor. Even though the transaction can be streamlined to seven or eight minutes, there are discussions to have about what type of risk to take on and at what price point,” he says. “You need an insurance professional to walk you through that process because it is imperfect information even with the Internet. I think there is a place for [agents] and always will be.”