Finger on the pulse

ITIJ 222, July 2019
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Every product has challenges but I have always felt that travel is the most complex personal lines product you are likely to buy
David Allen
Underwriting Strategy Manager
Direct Line

ITIJ caught up with David Allen, Underwriting Strategy Manager at Direct Line in the UK, to talk underwriting, tech, personalisation and more

 

How did you first get started in the insurance industry, and how did you come to be in your current role?

I started in insurance in 1987 with Commercial Union (CU). As with many people in the industry, I wasn’t really sure what I wanted to do when I finished education, but I knew people at Eagle Star, General Accident and Norwich Union and they all seemed to be doing well so I wrote nine letters (no CV) and got four job offers – CU paid the most so I chose them!

I had a variety of roles at CU and through its metamorphoses – CGU, Norwich Union and Aviva – including commercial lines underwriting, broker account management, marketing and personal lines product development, and finished there in 2009 when Aviva withdrew from the site at which I worked.

After a period out, in 2010 I had the opportunity to join what was then RBS Insurance, now Direct Line Group (DLG) to underwrite travel. I had had a broad experience at Aviva, but travel was new to me.

Following a restructure of the underwriting team in 2016, I joined the new strategy underwriting team to focus on future challenges and developments across all products and haven’t looked back. Even though I am no longer solely working on travel, it is still a product I care passionately about within DLG and as Chair of the ABI Travel Committee.

 

Your insurance industry experience covers a range of segments and product types – would you say that travel poses more complex challenges than others?

Every product has challenges but I have always felt that travel is the most complex personal lines product you are likely to buy, because it caters for lots of types of cover (medical, trip covers like cancellation, liability, property, legal expenses, and so on). If you read any other product, it is relatively easy to compare, and cover names are largely the same with the difference in the detail. The variation in different customer outcomes at point of claim is usually as a result of differences in claims approach or the ways in which some of the covers and exclusions work, which is much more subtle than home or motor, for instance. This opacity means that while many customers may know they need it, they may not necessarily know why or how important it is to select wisely and understand what is and is not covered.

Travel also contains the biggest moment of truth you can face as a customer – being ill abroad, potentially with language barriers. Unfortunately, there are too many instances, some of which we read about weekly in the media, where insurers have let their customers down.

 

What technological advancements would you say have particularly revolutionised the underwriting space?

Medical screening, especially online, has made a big difference to the underwriting of risks, meaning more customers are able to get appropriate cover than ever before. This does still rely on them to read and understand the health questions they are asked, though, and answer truthfully.

Additionally, the growth of price comparison websites has enabled customers to access a wider market more easily, although this does come with the challenge that customers should not necessarily just pick the cheapest product – there is no point paying for insurance if it won’t pay you back when you need it most.

 

How does Direct Line keep up with consumer demands for personalised travel cover and swift claims processing – all at the touch of a button?

We are investing heavily in our technology by building our own bespoke system, which will enable all kinds of innovation in our future. This will enable us to provide great customer service with minimal disruption. Consequently, we will have much better data, which will enable us to review our offering to make sure we can meet customer needs and expectations. We also invest heavily in our people. While we are very keen to give customers the opportunity to self-serve, especially for the simplest interactions, it is important that customers can speak to a real person when they have something complex to deal with, or just need some help.

 

How do you see the travel insurance industry further developing its underwriting capacities in the coming years?

The recent publication of statistics from the ABI reveals the challenges of upward pressure on claims costs allied with downward pressure on premiums, which is a huge challenge. Add in to the mix the uncertainties around Brexit, interest from regulators (such as the FCA work on access to insurance) and the opening up of new destinations off the beaten track (in Asia, South America and Africa) and activities (especially cruises) and there is plenty to keep us underwriters occupied.

Underwriters need to keep up with regulatory issues for both insurance and the travel industry (such as denied boarding regulations or package travel regulations), customer dynamics, and risks and opportunities from new technologies and entrants to make sure their offerings do as they are expected to.

 

How has Direct Line been preparing its insureds, potential customers and its business operations for Brexit?

The lack of certainty with Brexit is challenging to all businesses. Most of our customers come to us via our brand partners and we have had conversations with them about what to expect from us. Our products that are already in circulation will continue to provide certainty for all our customers regardless of whether, when and how we exit from the EU.

Unlike some other providers, we do not mandate the compulsory use of the EHIC, so any impact would likely be smaller than on some others, assuming travel providers such as airlines can continue to operate as we have been led to believe.

 

Can you describe a typical day as Underwriting Strategy Manager?

My role is threefold – partly it is understanding and responding to legal and regulatory challenges, partly working on strategic development opportunities and threats, and partly involvement in tenders for new and existing partnerships. As this is across all the personal lines product types DLG underwrites, I get lots of variety, which is really interesting for me. No two days seem the same.

 

Which aspects of your role do you enjoy the most, and which are the most challenging?

I am very lucky to work with some talented people, which is great as I really enjoy team working. Luckily, I like all the different facets of my role and like getting into detail, so even reading the EU General Data Protection Regulations wasn’t a chore.

The biggest challenge is trying to prioritise all the many things that need doing and stopping myself from focusing on the most exciting at the expense of the most important.  

 

If you could invite any three people, living or dead, to a dream dinner party, who would you choose?

It is always tempting to pick great intellectual names such as Sir David Attenborough, Barack Obama, Sir Winston Churchill or Mahatma Gandhi, or raconteurs and entertainers such as Oscar Wilde or Tom Hanks, but in truth, I would like two dinner parties. The first would be with three dead people – my mum and dad and my dad’s sister who brought my parents together back in 1956; I never witnessed them all in the same room and I know that would be fun and very enlightening.

The other party would be with three living people: my children, who are 27, 23 and 22. In both cases, because you can never have enough time with those you love.

 

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