Micro-tariffing with goinsure

Insurance companies are increasingly using micro-tariffing as a method of adapting the premium to the individual customer’s risk profile. Micro-tariffing means that the insurance premiums consider individual information about the customer’s behaviour or lifestyle. While there are clear advantages to the use of micro-tariffing, there are also some disadvantages to consider.

One of the biggest benefits of micro-tariffing is that it can lead to fairer pricing. By taking individual risk factors into account, insurance companies can offer premiums that are more in line with the real risk that each customer poses. This means that lower risk customers can benefit from lower premiums, while higher risk customers must pay a higher price. This approach creates incentives for customers to make prudent decisions and thus reduce their risk.

Micro-tariffing can also lead to more personalized service to customers. By taking individual information into account, insurance companies can offer tailored insurance packages that meet individual needs. This creates a sense of appreciation in the customer and increases the chance of long-term loyalty to the insurance company.

Another advantage of micro-tariffing is that it can provide incentives for customers to make lifestyle changes that reduce their risk. If the insurance premiums are linked to behaviour or lifestyle, customers can be encouraged to change their diet, exercise more or avoid dangerous activities, for example. This can not only reduce the individual customer’s risk, but it can also lead to lower costs for the insurance company and thus potentially lower premiums for all customers.

Despite the positive aspects of micro-tariffing, there are also some disadvantages to consider. One of the disadvantages is that it can be offensive to customers to have to provide such detailed information about their lifestyle or behaviour to the insurance company. This can create a feeling of surveillance and interference in the customer’s privacy. In the EU, there is a definite ban on discriminating based on gender.

Overall, micro-tariffing has both advantages and disadvantages. It can lead to fairer pricing, more personalized service, and incentives for customers to reduce their risk. At the same time, it can also create a breach of privacy, discrimination and potentially prevent access to insurance if the questions asked in connection with enrolment are not carefully considered. It is important that insurers consider these risks and try to balance them to ensure a fair and reasonable use of micro-tariffing.

With micro-tariffing, several parameters must therefore be asked which are important for understanding the risk and behaviour of the insurance applicant. It is therefore important that the companies have control over their data model so that the relevant questions can be asked in the right order and in a way so that the customer understands what is being asked and what significance this may have.

How is micro-tariffing used in goinsure?

The new goinsure platform is therefore structured so that a significant part of the task of making the insurance companies’ products available online is related to how and in which order information is requested.

The insurance company can therefore use its familiar data models which can easily be transplanted into a calculation model in goinsure. The micro-tariffing is thus built into the calculation model and data is fed into the model via questions asked to the customer.
Based on this calculation model, input data, calculation rules and table look-ups are defined, and this is then reflected in the questions and prompts that are generated in goinsure.

The model should preferably be a 1 to 1 copy of the company’s model in its own core system, so that data can be immediately transferred by drawing in goinsure for production at the insurer without data having to be translated or modified.

However, this does not mean that the micro-tariffing is open on goinsure, as the customer can see through the questions asked which factors have an impact, but not which weight and mutual prioritization the factors are given.

The advantage of this is that the insurance company can momentarily change the model if the current subscription shows trends that need to be regulated.

The practical measures of putting a product on the goinsure platform are manageable, but it is important to think about the communication to the potential users, so that the users can easily understand which questions are important and why they are so. After all, micro-tariffing is based on a model for the future risk for the insurance applicant, and in addition to geographic data and other factual data that can describe the customer’s basic risk, there are behavioural parameters that should preferably be uncovered via the questions asked – but which should also lead to the desired risk behaviour is displayed, after signing of the insurance, so that the probability of damage is minimized.

This communication takes place partly by asking the right questions in the right order, but also by describing the company’s risk appetite in such a way that the customer can see for himself through goinsure whether he is an obvious target for the company or whether there are factors there. must be adjusted in behaviour or otherwise to obtain the best possible conformity with the company’s wishes.

In this connection, the illustration of the company’s product and the description of the product are essential. Goinsure therefore provides opportunities for an overall illustration to be attached which can tell something about the company’s values and the individual product’s special characteristics as well as the target group for the product.

For each step in the questioning process, there is also the possibility to illustrate the current group of questions, and the individual questions can be marked with a (?) which, when “mouseover”, shows a supplementary text that can be used for a detailed explanation of questions and for good advice regarding risk behaviour.

It is important that the result of the indication or the offer to the customer, is communicated to the insurance applicant, but also that a rejection of an underwriting or a need for additional information is presented actively and relevantly.

In goinsure, it is therefore set up so that if the result of a premium calculation results in no wish to present an offer or additional information must be obtained, then a product-specific text can be displayed that explains this and how the customer will be informed via the goinsure platform.

Feedback to the insurer

It is important that an insurer receives correct and quick feedback from insurance applicants. An offer/indication from the insurance applicant can therefore be accepted or rejected in connection with the offer process.
In this connection, the customer is asked several product-specific questions defined by the insurer, so that grounds for rejection can be collected.
These can of course be related to price, but also coverage conditions, clauses etc. can be a significant reason for offers not being accepted.

It is again very important that the questions are formulated well and ranked in the right order to obtain the maximum benefit from the customers’ answers.

In addition to the programmed interaction with questions and answers in goinsure, there are also options to ask the insurance applicant to upload images, documents, and spreadsheets with the desired information. This ensures that the entire process can be completed from start to finish and that the customer’s “reward” for answering in detail the many questions that micro-tariffing entails becomes a here-and-now offer, in contrast to the normal processes of underwriting with the help of insurers or insurance companies own websites.