Is a lack of standardisation in insurance making life more difficult when it comes to modernising? That all depends on who you ask.
“From our point of view, I think one of the things that is driven most by customers is a better need for standardisation,” Comparethemarket.com’s head of labs, Alex Shaw, commented. Open API banking standards in the UK – standardised data structures that govern how banks make information about their products, services, branches and ATMs available – have set the bar high for customers when it comes to accessing information, and the insurance industry has yet to catch up to that level, he said.
“Customers want access to their stuff, they want access to it quickly and we can’t provide that more often than not, because there are intricacies in every organisation, which have developed for various reasons over time, but we need to help to standardise across the board,” Shaw said while speaking at an Altus Consulting event last week.
However, Gus Park, managing director of motor insurance at Direct Line Group, where he also heads up business development, said that while it’s true that standards would be useful in some areas of insurance, “that’s definitely not universal.”
In some areas, insurers want to keep their competitive advantage by not sharing information, he explained: “We want to beat our competition, we want to gain competitive advantage, we don’t want to share these things.”
And in areas such as innovation, standardising processes can actually be restrictive. Park said that he has argued against standards in telematics in the past, “because sometimes innovation is helped by not having standards, because standards can constrain the directions in which people go, but there are areas where it would be helpful.”
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