Survival of the Fastest–Strategy 3: Auto Quoting Built on a New Vendor Pricing Model

This article originally appeared in Insurance Innovation Reporter .

In the third article of a four-part series, see how the price of data insurers need to win new business can better align with the value it brings to the quoting process.

When auto insurers buy third-party underwriting data that’s priced according to outdated conventions, it can stifle innovation as companies seek to modernize their workflows toward greater efficiency and a better customer experience (CX).

This is especially true of data that’s subject to reseller or pass-through agreements, such as motor vehicle reports. The cost for such reports often increases at the source and gets passed through to the end user, but that added expense may not reflect any increase in the value of the data.

When insurers sprinkle their report ordering throughout the quote flow based on the progress of each application, this practice can exacerbate the problem by subjecting them to the least economical pricing, like ordering an entire meal a la carte. And that can undermine the very purpose of the strategy—cost cutting.

Consolidate and save

A single source of diverse information with flexible pricing and scalable delivery could be the start of mastering the data challenges that often keep quoting stuck in the 20th century. New data sources, innovative household-level analytics, and cost-effective risk indicators can also lower underwriting expenses without sacrificing accuracy. The trick for insurers is not to settle but to keep looking for the right vendor.

The new economics begin by moving more underwriting and rating to quote start. Traditional thinking would say a data-forward strategy spends money on business that’s not guaranteed, but really, the existing process limits how many prospects make it through the sales funnel—and what’s possible for those who do. Some insurers have taken the data-forward leap and discovered how bundling data at the start of the quote flow yields multiple benefits:

• Better CX from an application that needs only minimal manual inputs
• Real-time risk segmentation based on a potent package of upfront information
• Automated quotes in seconds for most risks—so underwriters can make best use of their expertise

Branch, a growing Insurtech in personal lines, is embracing this new economic model to raise CX while bundling home and auto quotes in seconds. Auto manufacturers are tapping into similar models to deliver embedded insurance seamlessly at the point of sale. Remember: a wider sales funnel spreads upfront costs over more new business, lowering acquisition costs.

The above use cases hint at the potential scalability of bundled data for quoting, but insurers don’t have to be big to start realizing the advantages. All it takes is a commitment to agility. Stay tuned for the fourth and final article in this series to see how any company—of any size—can start to modernize with the right partner.

Want to read the next article in the series? View it now on Insurance Innovation Reporter: Survival of the Fastest–Strategy 4: Auto Quoting for Nimble Insurers—of any Size .