Optimising and Securing the Customer Onboarding Journey in the UK Insurance Industry

Optimising and Securing the Customer Onboarding Journey in the UK Insurance Industry

In today’s economic climate marked by rising inflation, stagnant wages and decreased consumer spending, now is an uncertain time for businesses in the insurance sector. As insurance premiums continue to rise by an estimated 34%, outpacing markets in the rest of Europe, insurers are finding price differentiation increasingly difficult to achieve. As a result, those in the industry must now explore different avenues of differentiation to attract and retain new customers – the answer could lie in their customer experience (CX) strategies.

It is no secret that today’s consumer demands value from every interaction. This is particularly critical during the onboarding process, where the balance between friction-right convenience and robust security can be the difference between an abandoned application and a loyal customer. For insurers navigating these turbulent times, delivering a flawless, security-focused CX is not optional—it’s essential for long-term success.

This blog explores how insurers can optimise and secure their onboarding journeys to convert consumers into long-lasting, more profitable customer relationships.

Why is CX important in the insurance industry? 

The insurance industry is undergoing a period of unprecedented change. Economic pressures and rising costs are forcing consumers to reevaluate their spending priorities. In this challenging climate, delivering exceptional customer experiences is no longer a luxury but a necessity for those looking to onboard new customers.

By prioritising CX, insurers can differentiate themselves from competitors, build trust and foster long-term customer relationships. A seamless onboarding process is particularly important as it sets the tone for the entire customer journey, and by reducing friction and enhancing security, insurers can increase customer satisfaction, lower attrition rates and drive sustainable growth.

Application fraud is a growing problem for the UK insurance industry

According to TransUnion Device Risk data, rates of both first- and third-party application fraud continue to accelerate across the insurance industry. With the number of risky transactions across these fraud types increasing by 4.87% and 10.93% respectively between 2022 and 2023, application fraud remains a key problem for business leaders within the sector.

Quote manipulation and fronting remain significant issues, with a quarter of 18 to 24-year-olds admitting they would lie to access cheaper insurance, with more risking “fronting” by posing as a named driver on a parent’s main policy. A further 63% of consumers also admitted to modifying their identity attributes when applying for a product, with reporting a different income (20%), using a different address (11%) and using a different email address (25%) being among the most common ways customers would change their details to access better offers or cheaper quotes.

These trends are unsurprising given that insurance premiums continue to raise at the hands of surging costs, with car insurance being the worst affected, increasing by 25% across 2023. In a time of unrelenting economic uncertainty, households strained by financial pressure may be forced to commit application fraud in order to keep their premiums at a more manageable rate – a trend that looks unlikely to wane as we head towards a general election and further macroeconomic turbulence from various international pressures.

Motor insurance sector focus: Ghost broking  

This fraud type is part of the application process, but the scale of the issue requires it to be called out separately. There’s been an increase in ghost broking using stolen identities, creating issues for both consumers and insurers across the country.

Ghost broking involves a fraudster (pretending to be a genuine insurance broker) selling fake car insurance. Ghost broking scams have risen in recent years, typically taking place on social media or facilitated through word of mouth or local businesses. Policies are bought from legitimate insurance companies using false, compromised, or stolen information (fraud rings can go as far as using genuine identities from Companies House) before being sold to customers. Ghost brokers target those who don’t have a strong understanding of how insurance works in the UK, with younger drivers and those who do not speak a great deal of English often falling victim to scams. Those who are more financially vulnerable, or struggling to keep up with household bills, may also be targeted by fraudsters, as this enables consumers to obtain insurance at lower prices, or in instances where they otherwise may not be able to afford it. However, if the car is involved in a crash, the right policy won’t be in place, but the insurer may still be liable for third-party costs.

There was a 143% rise in ghost broker cases referred to police in 2023, which is unsurprising given that 99% of consumers lack understanding of what a ghost broker is. With the number of cases rising dramatically, and increasingly detailed stolen identity data circulating on the dark web, insurers are finding standard identity verification alone is no longer enough to stop ghost broking and protect their bottom lines.

Secure and streamlined online processes are insurers right-to-win

In 2023, 47% of consumers admitted to abandoning an online application for an insurance product[1], indicating that there is a significant opportunity for insurers to improve conversion rates by optimising their customer onboarding journeys in 2024.

When asked why they had abandoned an application for an insurance product, the majority of consumers cited friction as their primary motivator: The process was frustrating (50%), too much information requested (49%); and too much time to complete (47%) were the top reasons for abandonment.  

As the digital-first Gen Z and Millennial generations make up a larger proportion of the UK adult population, the demand for convenient digital transactions looks set to catapult in coming years. Forty-five percent of UK consumers reported they would switch companies to receive a better digital experience. This increased to 57% for Millennial users and 61% for Gen Z consumers, showcasing how providing streamlined experiences to these historically underserved populations could be a winning strategy for insurers looking to future-proof their businesses.

However, the desire for friction-right onboarding only tells half the story. Forty-five percent of consumers ranked personal data security as the top reason to do business with an online company, while 90% of consumers also stated that confidence their personal data will not be compromised was the most important factor when choosing who to transact with online. This highlights the importance of perceived security for insurers looking to defend their customer base, whilst also evidencing that investment in fraud prevention solutions could prove to be lucrative when it comes to attracting new customers and reducing fraud losses in the longer term.

In order to increase conversion rates and win out over competitors in 2024, it is vital for insurers to employ fraud prevention solutions that secure digital journeys without increasing friction for genuine customers: 

1. Balance friction-right journeys with fraud prevention:

Delivering customer experiences that are both streamlined and secure is a difficult balance to achieve in practice – especially when consumer expectations continue to outpace the rate many are able to optimise their systems. TransUnion TruValidateTM suite of digital solutions can help insurers onboard more customers by detecting fraud in the background, helping prevent false positives and minimising friction for genuine customers.
 

Solutions such as Device Risk, which leverages device history with device-to-device and device-to-account associations based on confirmed fraud reports from our global network, can uncover and track hidden fraud patterns to help mitigate fraud without impacting on the CX of genuine applicants. This capability can be enhanced further with solutions such as Email and Mobile Risk – high risk signals are flagged to help identify instances where an email or mobile number has been linked to multiple different individuals. By layering these solutions, insurers are able to detect more instances of fraud without creating cumbersome onboarding journeys for customers. 

2. Mitigate the risk of ghost broking:

Ghost broking is a persistent issue in the insurance sector, with many consumers falling victim to these fake policies. Utilising solutions such as bank and card checks can help reduce the possible reputational impact ghost broking poses. By verifying that the name and address associated with the bank account or payment card being used corresponds with the person making the purchase, insurers will be better able to identify this fraud and protect consumers from potential financial harm. 

3. Reduce false positives:

False positives, where legitimate transactions or activities are incorrectly flagged as fraudulent, can be a significant drain on business resources. When these occur, businesses often need to conduct manual reviews to verify the legitimacy of the flagged activities. This process is time-consuming and resource-intensive, requiring skilled personnel to investigate each case thoroughly. The cumulative effect of these reviews can lead to substantial operational costs and divert resources from other critical areas. But this issue can also have a wider impact on businesses – especially when it causes them to lose genuine customers. For consumers, false positives create unnecessary friction and delays. When their activities are flagged, they may face additional verification steps, such as providing extra documentation or undergoing further identity checks. This not only frustrates customers but can also erode their trust in the organisation itself – hurting the chances of future or repeat custom. The delays can be particularly detrimental in time-sensitive situations, where quick access to services is crucial. Overall, the impact of false positives extends beyond operational inefficiencies, affecting customer satisfaction and loyalty.

TransUnion’s device and identity signals can help reduce false positives and enhance customer outcomes. By leveraging these insights, the TruValidate suite of solutions can assist insurers in more accurately distinguishing between legitimate customers and potential fraudsters. This multi-layered approach not only minimises the need for manual reviews, but also helps create friction-right experiences that customers expect. 

4. Mitigate synthetic and stolen identities:

Fraud from synthetic and stolen identities continue to climb – making this a key issue for insurers. Leveraging solutions like Document Verification and Facial Biometrics can help mitigate this type of fraud. Able to match face or document information against previous iterations and with tamper detection rates of over 99%, the solution helps bolster successful onboarding and minimise application abandonment rates. Layering the solution with other device and identity signals, such as Device Risk or Email ID, can help strengthen fraud prevention efforts without creating unnecessary friction for genuine users.

5. Flag the importance of security of experiences:

Convert more customers during the onboarding process by signposting how your brand values security and can add value for customers later in the journey. For example, pension providers can offer CreditView's dark web monitoring tool as part of their digital experiences to help empower consumers in better understanding threats to their accounts. By highlighting this value-add at the onboarding stage, insurers could improve conversion rates whilst encouraging the customers you convert to protect their accounts – strengthening holistic efforts to lower fraud risk.

TransUnion: Simplifying customer experience management

At TransUnion, we make trust possible by helping organisations confidently interact with genuine customers. Our digital solutions encompass identity and device insights to help organisations confidently and securely engage consumers at each stage of the customer journey, helping improve conversions, reduce fraud losses and deliver enhanced, friction-right user experiences.

To learn more about how the insurance industry can turn customer experience into a competitive advantage, download our eBook, “Begin new relationships, Deepen existing ones” now.

If you’re a consumer with questions or issues related to your personal credit report, drivers history report, disputes, fraud, identity theft, credit report freeze or credit monitoring services, please visit our Customer Enquiries page for assistance.

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