How insurance advisers can utilise new technology to lower premiums for clients

Offering low premiums to customers is always high on the agenda

Offering low premiums to customers is always high on the agenda

In the competitive world of insurance, finding a way to stand out and offer low premiums to customers is always high on the agenda. Of course, there are standard ways to reduce premiums such as encouraging the customer to pay a higher excess or using a no claims bonus, but using new technology could significantly help insurance advisers offer new products and increase their market share.

The use of ‘smart technology’ has allowed insurers to measure their customer’s usage more effectively and provide the most accurate readings possible – rather than calculating a premium based on just age, experience and demographic.

A good example of this is the telematics ‘black box’ which is fitted into a driver’s dashboard and uses GPS to measure the acceleration, braking, turning and overall driver performance – sending the information to the insurer in real-time. The introduction of this technology has encouraged its users to become safer drivers, with the idea that their insurer is present in the vehicle, and those using this device have reported savings of up to 20 per cent on their premiums. (Source: Call Wiser)

What advisers should be looking for

Advisers need to consider some of the fundamentals that lower the cost of an insurance premium. Insurance quotes are based largely on the individual’s demographics, safety features and ultimately the risk of the policyholder making a claim.

So any way to use technology to make a customer’s home, business or vehicle safer and reduce the risk of making a claim should be welcomed. Plus, using technology, there should be an effective way to make this data shareable with the customer, giving them incentives to lower their policy.

Example 1: FlowGem, recently acquired by Centrica, is a small device that is placed on your boiler at work or home. The device detects any sudden water leaks and alerts the owner and insurer by text message or phone call. Insurers can offer a reduced premium to any customer that installs this unit as it limits the damage caused by broken boilers and the need to make a claim.

Example 2: CUJO, is a firewall device that can be installed at work or at home and can prevent any external hacks to your computers, mobiles and other devices. By customers adopting this technology, it can similarly lower the cost of your home or business insurance. (Source: Techround)

Where to find this technology

Finding new technology could be as simple as watching the tech blogs such as TechCrunch and Wired for new products. It is also worth keeping an eye out for regular tech conventions such as Disrupt and Adtech which have annual events in the UK and US.

To avoid losing out to another insurance company, it is worth being an early adopter and approaching promising tech companies still in the early stages of their development – maybe you could suggest trialling their product with your own customers?

The best tech companies and innovations are bound to be acquired by the big insurance companies for large fees. For this reason, you could always investigate using your own resources and investing in research and development to find new technology.

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