covered | March 2021 | Personal

Plum Underwriting, IHP tech and agile data

Plum Underwriting discusses IHP technology and the power of agile data in home insurance.

We are Plum Underwriting, a specialist in non-standard home insurance, and we utilise Insurer Hosted Pricing (IHP) technology. Here we discuss how IHP technology has been able to help us respond in an unpredictable year.

Managing general agents (MGAs) are recognised for innovation and their entrepreneurial approach to underwriting, as well as their understanding of and ability to respond to the needs of brokers and their clients. Delivering on these core attributes is increasingly driven by their ability to leverage data and their use of technology to do that.

There is no doubt that data is the underwriters’ and brokers’ friend. Last year’s Digital Consumer Trends survey, carried out by Deloitte UK, pointed to customers increasing digital appetite that ranges from online shopping to accessing healthcare. It revealed that nearly 40% of respondents to the survey of UK adults were doing more online shopping during lockdown. Perhaps not a surprise considering the lockdown restrictions placed on the population over the last year.

When it comes to financial services, the Capgemini Research Institute published a report around the same time that pointed to a 10% point increase in the number of consumers looking to buy insurance over the next six to nine months, pointing to the reason as the environment of deep uncertainty that the pandemic has created. 

Clearly, with a growing customer demand, brokers are in a strong position to provide their clients with a digital insurance solution and IHP can be an important tool in helping to maximise opportunities.

IHP technology enables us to build a picture of customer buying behaviour and trends that can offer brokers valuable insights to help them take advantage of opportunities in niche areas of business more accurately and increase competitive advantage by identifying and targeting these areas faster.

“Insurer Hosted Pricing (IHP) is increasingly being recognised by MGAs as a way to provide a more responsive service and profitable underwriting results, and Plum, as one of its early adopters, sees significant benefits from using the model. IHP provides us with the ability to make rating and coverage changes in a matter of seconds and make them effective almost immediately. Along with rating, underwriting and risk selection rules, there is also the opportunity to access third-party systems to provide enriched data that enables the pre-completion of question sets and validation of the information provided. This speeds up rating and risk selection providing a more efficient application process. All in all, this means we can respond to specific trends in the performance of products and opportunities quickly. Using Open GI’s IHP Plus, a stand-alone, cloud-based rating solution, Plum has been able to develop, test and monitor the performance of its eFlex, EDI non-standard home insurance risks policy, in real time.”

Mahben Quddus, Commercial Director at Plum Underwriting

The power of data insights

Having relaunched eFlex in 2019, which targets specific non-standard home insurance risks using IHP, Plum has access to masses of data that provides insights into the buying behaviour of home insurance customers.
Nicky Whatman, Head of Product at Plum, shared some of the highlights. “First and foremost, during the recent lockdowns, customers have traded online more, the average number of daily quote requests we’ve seen has increased from 35,000 to over 50,000″.
In terms of the performance of the household market, Nicky says the data points squarely to a very competitive space. “It remains extremely competitive and price sensitive, with the smallest of rate changes affecting conversion performance”.
Looking at seasonal data and particularly Christmas, Nicky points to a downward movement. “We saw a reduction of some 20% in the number of households shopping for insurance across November and December. However, whilst the underlying number of households shopping around had reduced, each household obtained more quotes across the aggregators with two or three quotes per household, and as high as five in some cases”.
Whilst the pandemic has had clear impacts on industry sectors with challenging times being experienced in areas such as rental and construction, the quote volumes for Plum’s target segments, holiday lets and unoccupied properties have remained consistent throughout the year that Plum traded via IHP.
Developments such as the Government’s home buyers stamp duty relief with a resulting surge in housing market movement has also generated an upward trend in the number of home insurance requests being generated. IHP also offers deeper insights into more specific trends.
With so many aspects of life under lockdown it is not surprising to see that customers are spending more time shopping around and taking time to sort their finances, or are in a position where lower income means they need to shop around more.
Could there be a more important time to use the power of data and IHP to leverage insights and customer behaviours to maximise the opportunity to meet their needs at a time when they need it most?

More info?

Please contact Steven Bishop, Head of Business Development at Plum.

Email Steven