Insurers are held back by legacy systems that are siloed with a single line of business
The growing number of people using sheds, summerhouses and garages as home offices over the past year in lockdown has caused a divide between insurers.
This is according to insurtech expert Anthony Grosso, head of marketing and communications at insurance software firm EIS. He said that some insurers are extending coverage to new home-based working locations at no extra costs, while others are asking people to pay a premium or buy a new policy.
He continued: “[Insurers are] held back by legacy technology, which doesn’t allow for innovation. Recent research from EIS [revealed that] 60% of insurers do not consider their products innovative.
“[This] will leave customers disappointed and frustrated in efforts to secure reasonable pricing.”
Blurred risk
However, Grosso said that insurers themselves will be “equally frustrated with their lack of being able to provide fair pricing”.
He said: “This issue is indicative of a wider problem for insurers, who are held back by legacy systems that are siloed into one line of business, unable to comprehend insurance risk when lines are blurred between personal and commercial risks.
“It’s a growing problem for insurers, which has been evident throughout the pandemic, as the lines blur in line with how workforces are diverging from [a] 9am to 5pm office day to a wide array of work setups.
“To navigate the blend of commercial and personal risk, insurers need more customer-centric systems, which fairly price home and motor use based on actual usage and an accurate evaluation of the risks posed.
”These systems move beyond legacy and modern legacy, to technology which is AI-enabled and more open to data, enabling policies to be configured and priced accurately to fit the risk.”
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