With premiums forecast to drop 6% in 2021 and cost inflation continuing its inexorable rise outlook is unprofitable.

"While the UK motor insurance market reported its best underwriting profit in 2020, with a net combined ratio (NCR) of 90.3%, in 2021 and 2022 the sector is expected to make losses, according to professional services firm EY.

Its latest UK motor insurance results predicts that the sector’s NCR for 2021 will be 103.7% due to underlying inflation. This will also cause a NCR of 112% for 2022.

Rodney Bonnard, UK insurance leader at EY, said: “There has been a great deal of disruption over the past year and the challenging market environment is set to continue, compounded by an increasingly soft market and a ramp up of regulatory requirements.

“In particular, while the drive by the FCA to deliver fair value to customers is welcome, it will require insurers to carry out significant work and bear the costs of implementing major changes in a tight time frame."

Claire Ruel Insurance Times 9th June 2021

If ever there were a catalyst to scaleup digital transformation efforts in motor claims this is surely it. Todays claims platforms with little or no Capex and subscription pricing means that insurers can make a return in investment in the first year whilst also offering customers the superior user experience other sectors offer. 

“The bar just continues to get higher for customer expectations around digital, and while many insurers are hitting the mark on the digital basics, few insurers are using digital in new ways to drive growth and engagement,” said Tom Super, head of property and casualty insurance intelligence at J.D. Power. “The real challenge for insurers is pushing the envelope on digital innovation. Customers’ pace of expected change is accelerating, and insurers must be able to take steps to go beyond the basics of simply digitizing customer tasks. Those that can make this leap will be poised to separate themselves from the pack.”

J.D. Power 2021 U.S. Insurance Digital Experience Study released 25th May, 2021

The leading claims management platforms are all low-code/no-code which means that power shifts to the insurer when continuous improvement and new innovation are so vital. The key is working with platform vendors that have deep and detailed experience of claims and hiring the qualified talent who know the major disruptive waves heading your way. Digitally transformed Supply chain management is a critical step here.

Collaboration, communication and orchestration will have a significant impact on improving customer satisfaction and reducing costs. This year and next with effective triage via connected supply chain participants all working off a single version of the truth. Able to help auto insurers tackle the coming NCRs over 100. 

But- before long insurers will need to tackle the next step. An "uber" model as many contractors, specialists, repair networks, body shops work for multiple auto OEMS and insurers. 

It is waiting for a platform that connects and triages these networks, ecosystems , labour forces, contractors etc. We have already seen one operating in the translation marketplace - Interpreters Portal. Turning this services industry upside down. 

HumanPortal is another platform play that has the capabilities outlines above. Leveraging blockchain and AI whilst overcoming their  current limitations.

Before that auto insurers will need to increase their digital maturing scores. Over the last five years Altus has benchmarked over 200 digital insurance journeys and show where improvement is needed..

Insurers need to apply the same digital transformation to claims that they do to Quote & Buy and MTA. 

                                  MOTOR       HOME         Home/Motor Gap % points

Quote & Buy                      99%           96%                     -3%

MTA                                    67%          53%                     -14%

Renewal                            34%            26%                    -12%

Claims                               33%           28%                      -5%

Whilst digital maturity is almost similar for Quote & Buy, the digital transformation outcomes fall for renewals and Claims especially when you see these these are % point differences from far lower digital transformation scores.

When you look at the claims lifecycle the 2020 digital maturity picture for HOME insurance is illuminating- 2019 in brackets.

1) Claim Notification 45% (41%)  2) Claim Digital Tech 18% (N/A) 3) Claim Tracking 5% (N/A)


  1. Customers can complete an Online FNOL process for some or all Claims types 
  2.  Any specific digital technology that can be used by customers at points within the claims journey, including photo/video upload, damage assessment  
  3. Customers can track their claims online, status at each stage and communications


Altus explains the data.

"Almost all insurers we have spoken to are on a claims transformation journey, with some making a tangible move towards automating the claims process end-to-end. 

Naturally, this has started with the FNOL processes, with significant focus being on this during the last few years – 5 years ago an online FNOL form was rare in the market.  Moving forward to the present day, it is now the majority of Insurers who have implemented online forms and customer portals to enable customers to report claims.  We’ve also seen the use of tools to automate the validation of electronic claim forms (ECFs) in the London Market.

Going along the Claims value chain, we see automation being used for simpler, low value claims, and for more complex claims, the use of technology to support and enhance decision making. 

In particular, the use of data analytics to recreate loss scenarios and determine liability, video streaming to enable decisions to be made by claims handlers without site visits, and using machine learning models to determine quantum and the most appropriate method of settlement.  Also, at the back-end, insurers are working closely with vendors operating in the payments space to improve the speed of indemnity.

As most Insurers have projects underway or in plan to implement improved digital capabilities over the next 6 to 24 months, we should be seeing material improvements to the experience for customers at the moment of truth for Insurance, and our scores will be regularly updated to reflect the progress we are seeing in this area. "

In summary, most progress has been in FNOL and simple claims. Where more complex claims require surveys, professional expertise, triage of loss adjusters, suppliers, contractors and sub-contractors and allocation to the right claims teams the digital transformation falters.

Altus adds this footnote.

"Claims has seen some progression too, mostly focussed on FNOL, though some insurers are offering full digital journeys for simple claims such as Accidental Damage to low value articles in the home and some motor insurers carrying out Total Loss claims in minutes rather than days. A further breakdown in Claims capabilities, encompassing Digital Technology and Claims Tracking functionality (shown only at individual Insurer Brand level at the moment) will be factored into overall scoring soon, so expect the overall Claims number to drop in the coming weeks."

Looking forward to seeing the new scoring and how digital transformation matures and home/property catches up with motor. 

Thanks to Mark Andrews Director Insurance at Altus for permission to use data from the DigitalBar. There is a wealth of insights there and you can try it free for 14 days HERE