How ‘standards’ can help brokers and underwriters

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With the pandemic ongoing e-trading has become a vital tool to do business, but standards are still needed especially as the market is always evolving Polaris tells Insurance Times

“Consistency” – this was the word that Steve Waller Polaris’s standards manager used when asked how standards support brokers and underwriters.

Likening standards to a “living dictionary” Waller says they allow for information which has a commonly understood meaning to be shared throughout the value chain.

These standards include agreed questions and answers that a customer or broker can select – and this is what underpins all e-traded products.

It allows for electronic underwriting to happen smoothly by enabling brokers and Price Comparison Websites to deliver multiple quotes using a common set of questions.

And with the Covid-19 pandemic seeing more and more people rely on e-trading and technology therefore playing a bigger role, having standards has become vital.

He tells Insurance Times: “As standards underpin digital trading, many organisations and proposers are seeing the benefits of the standards without consciously realising they are being used.

“With the current pandemic, one would expect an increased usage of and reliance on digital trading and hence of standards. In our forums we have discussed changes to the standards to reflect the pandemic, but to date none have been made.”

He gave the proposal of an addition to employment status of being furloughed as an example, which he says after debate was not adopted as the underlying employment status had not been altered.

It follows Polaris calling on brokers for feedback regarding the development of e-trading products standards.

Part of the chain

According to Waller, brokers are part of the insurance purchasing chain that speak directly to customers and are therefore able to share “valuable insights on the difficulties customers face” when buying insurance so that a solution can be considered.

But he says: “Although market participants may reach these conclusions independently, this acts as a good check and identifies where changes will have the most impact.

“Brokers can also sense check proposed changes and assist in determining how best to achieve adoption.”

February saw Polaris the insurance Standards body team up with insurtech Pikl in a bid to create sharing economy standards after it was brought to light that insurers, brokers and price comparison websites were not allocating whether customers were in short-term lettings prior to providing cover.

Polaris therefore created updated standards to cater to individuals that use their residence or vehicle for short-term commercial purposes. In November last year Polaris teamed up with insurtech Cytora to deliver a data-led underwriting tool.

When asked how insurtechs as a sector sit within standards, Waller says: “A number of insurtechs participate in the standards community and actively use them within their propositions.

“We are not aware of standards they have built independently. If an insurtech is acting in a standalone capacity with an insurer, standards are not generally required.

“However, at the point they wish to appear on multiple platforms, the benefits of standards will accelerate take up.”

Constantly evolving

Although the very first standards that Polaris created were for private motor and household, standards in general are always evolving with market changes.

And to keep up with this constant change Waller says that Polaris speak to many organisations and industry bodies as well as raising matters it becomes aware of through reports and market knowledge.

He adds: “The standards as such are not regulated, although as they are used in a regulated environment, we work with our stakeholders to reflect relevant legislation and regulation.”

Starting with the customer

And data is something that the insurance industry has in volumes, according to Vivek Banga, Polaris’s managing director.

When asked about the benefits of sharing data under the initiative of open insurance, Banga says: “It must start with the customer”.

Listing the benefits of sharing data, he says it could include avoiding under insurance, making sure comparisons between products is not restricted to price, making it easier to switch providers as well as catering to the customers’ needs.

But he says that central to this is that information should be shared electronically, and this requires standards.

“Information should be shared electronically, securely but only under the conditions that customers approve of – these three things are critical, and you need standards around that,” he adds stressing the importance of consent.

Banga believes that open insurance will further enhance market competition especially if it enables new entrants to enter the industry faster, but he says it is unclear what the initiative would look like as it still has a long way to go.