The event was full of some great speakers, covering everything from supply chain issues through legal reforms all the way to the growing importance of technology and data.
One of the key messages that ran through all the sessions was the need for greater collaboration, not only between motor insurers and their suppliers, but across the whole insurance value chain.
Issues like inflated subrogated repair costs have long dogged the motor insurance industry, effectively just pushing up costs for everyone so negating any perceived competitive advantage.
Several speakers on the day said the industry needed to stop shooting itself in the foot in this way, and instead work in a much more collaborative way for the good of everyone.
The motor insurance industry is a highly competitve market. With the exception of the pandemic-hit last 12 months (when gross incurred claims fell by £2.5bn), market loss ratios of UK motor insurers have been up in the high 60s since at least 2017, with expense ratios also sitting north of 30%.
This means that insurers are not making much, if any, profit from their core motor products.
Add in to the mix the unknown effects of a number of industry changes, whether it be the personal injury reforms, ongoing supply chain pressures, or the regulatory changes around GIPP and Fair Value, and there is certanily a lot for motor insurers to grapple with over the coming months.
Our co-founder Matt Scott spoke about these issues and what they meant for the industry on the final panel session of the day, and others echoed his views that being agile was of upmost importance in the face of such seismic changes in the industry.
When asked who the winners and losers would be, Matt said it was those who were keeping tabs on market changes and shifting their strategies accordingly that would be most likely to succeed.
Matt also warned of the growing threat of disruptors to the market – particularly highlighting the possibility of challenger banks entering into the motor market.
The insurers most likely to succeed in the future will be those that are proactive in their response to these outside threats, whether that be by changing business models or offering partnership opportunities to these incoming players.
Fair Value was another topic that came up on the panel, with these challenger banks well-placed for offering a convenient and seamless user journey that could potentially cover the whole of the insurance value chain from intiial quote all the way to claim settlement.
Matt said this was particularly important given the wave of consumerism we are experiencing at the moment.
And while Fair Value makes sense from a customer satisfaction and loyalty angle, it also makes good old fashioned business sense too.
We analysed the results of our Customer Experience Report and found that those insurers that received a higher CX Rating were also more likely to have delivered a lower combined operating ratio (COR).
In fact, of the five insurers we ranked top for customer experience, three reported a sub 100% COR – this compares to a little more than a quarter of insurers across the whole sample.
Now there’s some food for thought.
Want to get a better understanding of how these changes are affecting the market? The Insurance DataLab insight platform includes underwriting and solvency data on all UK registered insurers, as well as market data on everything from complaints handling to claims volumes and much more.