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How will innovative insurers evolve in 2019 to boost customer retention?

Happy customer and finisher

As the majority of the UK workforce get back to full swing this week, the industry is looking ahead to 2019 after what was a somewhat challenging 2018.

So, what’s instore for 2019, and how is Plastic Surgeon assisting insurers to reduce costs, improve sustainability and bolster customer retention.

A look back at 2018

The beginning of 2018, saw extreme weather to UK shores, forcing UK home insurers into losses as the “Beast from the East”, Storm Eleanor and May’s flash flooding pushed up claims. Fast forward to the summer heatwave, you’d be forgiven for forgetting the impact of that horrendous winter to the UK home insurance market, but this then had a further impact as subsidence claims following the long hot summer, comparing it to the previous quarter, the ABI said the number of claims increased from 2,500 to 10,000 and rose in value from £14m to £64m.

What were the main reasons for claims?

Accidental damage accounted for the majority of claims at 42%. More than two in five home insurance claims were as a result of accidental damage, such as dropped paint tins or broken window panes.

Water leaks accounted for nearly a quarter (24%) of claims. As more homeowners opt for design features such as ensuite bathrooms, under floor heating and hidden pipework, leaks are becoming harder to spot, which leaves the potential for further damage.

Storm damage accounted for 9% with the majority of claims occurring in the first quarter of 2018.

Fire damage claims were among the least common, at just 2% but can be extremely costly – with the impact often causing devastating long-term damage.

At Plastic Surgeon we echo these trends, head of insurance Chris Edwards explains: “In 2018 alone, we saved 16 tonnes worth of baths, basins and worktops from going to landfill as a result of accidental damage.

Continued Chris: “Damage caused by escape of water, continues to be one of Plastic Surgeon’s top three claims.  The industry reported that during the first quarter of 2018, claims due to severe weather events were up by 290%, and we certainly noticed an uplift.

“We were delighted to welcome a number of the country’s top UK insurers as clients in 2018, and they certainly identified the benefit that a restoration approach following the severe weather conditions in the first quarter of the year”.

2019 industry themes

Ernst and Young announced in October, that they predict two years of underwriting losses for home insurers, with a net combined ratio (NCR) of 101% and then 101.4% in 2019.

Deloitte say product development must be high on insurers agendas in 2019.  Looking at new and innovative ways to reduce costs and retain customers.

And while 2019 looks set to have its challenges, many in the industry believe it also presents some good opportunities to enhance the sector’s reputation. The winners in 2019 will be those who focus on the customer and demonstrate the value insurance offers.

How Plastic Surgeon is assisting the industry

Accidental Damage

With accidental damage the main home insurance claim, Plastic Surgeon has invested heavily in automation technology to enhance the process for low value accidental claims.  Many of the country’s leading insures are seeing claim lifecycles reduce by up to 80% as a result of using this leading technology.

Insurers are realising other huge advantages in addition to the reduction of the claim lifecycle and subsequent costs through the use of automation.   The improvement in customer satisfaction and the lessened impact on the environment are some of the benefits. In a 2018 report for a top 10 UK insurer, Plastic Surgeon estimated that they had saved them an average per claim of £900 and over the course of 2018 enabled 42 tons of landfill from being saved.

Project Work – managing the full claim

Large scale project work is an area that Plastic Surgeon is continuing to develop. In 2018 we worked on a number of projects for insurer clients, managing the entire claims process, ensuring that all areas were restored rather than replaced. This is an trend we see developing over 2019, working with insurers to drive down costs and claim lifecycles and improve the experience for customers. A great example is a recent restoration project to a period home devastated by black gloss paint.

Product Development – continually developing innovative repair techniques

Plastic Surgeon continue to develop new products and areas of restoration. In 2018 we launched our leather repair service, due to a continual demand for these repairs. Leather repairs are extremely difficult to accomplish, and we conducted extensive research and developed and refined the process rolling it out in September.

We continue to grow our repair portfolio with a focus on supporting emerging markets within the business and have a number of further areas of repair we aim to announce in 2019.

Education – Restoration v Replacement

We reported in 2018, the fear that insurers are still adopting archaic, expensive and somewhat unreliable processes when it comes to their approach to handling claims, particularly during large scale weather events.

Many insurers do not understand just how many items are completely repairable (only 16% of items we see are unrepairable) and during incredibly busy times they revert straight to a replacement approach, which is more costly, damaging for the environment and increases the claim lifecycle.

Over the course of 2018, Plastic Surgeon began contracts with a number of the top 10 UK insurers, a demonstration that insurers are realising the benefits and cost savings that can be achieved by a restoration approach.

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