Visualize: Insights that power innovation

Rate Call 2 is a dinosaur; InsurTech is the incoming meteor

By Jason Polayes  |  February 1, 2019

Dinosaur looking at asteroidImagine if an online shopper scored a big-screen TV for an advertised price of $499, but the purchase came in on her credit card bill at $652. In short order, the seller would likely face a disputed charge, a zero-star review, and a public shaming on social media.

No sane retailer would behave this way. But foolish as it sounds, this is how buying auto insurance can feel for some consumers.

Competition and tight margins have driven many personal auto insurers down the path to a subpar customer experience, all in the name of cutting expenses. A prospective policyholder may be quoted more than one rate as additional data, pulled just before bind, influences the premium.

This different, often higher, rate—known as Rate Call 2—is a dinosaur that very often doesn’t fit with the digital expectations of today’s consumer. Inefficient application and quoting processes can limit conversion rates, harm an insurer’s reputation and policyholder loyalty, and stifle opportunities for profitable growth. And InsurTech is the incoming meteor.

Signs of digital disruption

The signs of digital disruption are there. For example:

  • MuleSoft recently surveyed more than 8,000 customers and found that 58 percent think insurers provide a “disconnected experience."
  • 56 percent of consumers say a disconnected experience would make them consider changing insurers.

Insurers need to make channels functional to build relationships, because disconnection very often damages loyalty and retention. The bottom line: adapt or risk falling farther behind.

Learning from success

The home mortgage industry is facing a similar challenge to innovate. With a data-forward strategy, Rocket Mortgage enabled Quicken Loans—in less than a decade—to announce that it had become the leading mortgage lender in the United States. The key for Rocket Mortgage is using a few pieces of information to tap data sources that drive an instant underwriting decision.

Similarly, innovative digital platforms are helping personal auto insurers to leave Rate Call 2 behind as they evolve their processes for the InsurTech revolution. Along the way, those platforms help improve customer satisfaction and operational efficiency, reduce hidden costs, and preserve upselling and cross-selling opportunities.

A new Verisk Innovation Paper, Unlocking One-Rate Auto Insurance Acquisition, examines how the old processes are becoming extinct—and explores the way forward through award-winning InsurTech platforms such as Verisk’s LightSpeedTM Auto.

Download the Innovation Paper to learn about the new economics and how a data-forward strategy can help fast-track desirable risks, increase throughput, and drive conversion rates as much as 85 percent higher.


Jason Polayes is a senior product manager at ISO. You can contact him at Jason.Polayes@verisk.com.