Insurance Advisory: Overcoming the insurance customer onboarding challenge

Typing on laptop with headphones
Date Published


Reading time

6 mins read


Gabriel Swift

Automating the KYC process, detecting fraud, and adapting for the frictionless customer experience of the future.

The insurance industry, whose primary purpose is supporting individuals and businesses through disasters and crises, is about to go through a radical shake up. Following Covid-19, insurers face renewed pressure on the expense ratio. Faced with the changing regulatory landscape, and new regulations coming in from the Financial Conduct Authority (FCA) determining that loyal customers ‘must not pay more for insurance', a complete overhaul  is around the corner, heightened by the need to demonstrate compliance when carrying out background checks. 

For many insurers and life and pension (L&P) providers alike, customer onboarding has traditionally been a very manual process, exacerbated by the need to transact in a highly regulated environment, with many legacy systems that have resulted from merger and acquisition activity.

To survive and thrive in the post Covid-19 environment, customers’ expect superior digital experiences, and have learned from their experiences with the Amazons, Googles and Facebooks of this world, to expect quick, frictionless, digital, mobile-first, omni-channel processes and interfaces. Frictionless background checks and onboarding experiences are now expected.

Insurers and L&P providers have traditionally been perceived to be slow to adapt, that they lag behind the need to evolve and transform. Coupled with increasing competition from Insurtech brands who operate digitised and data-intensive approaches and are able to issue policies (or payouts) in minutes, this has created the perfect storm. Traditional insurers that have struggled to accelerate their onboarding and processing times are starting to feel the pressure. Customers now expect quotes, premiums and policies to be processed faster than ever, which raises the bar for ongoing service delivery too. 

The key to meeting these demands is to have the flexibility to leverage both public and non-traditional data sources. Companies that quickly integrate and access these sources, and provide almost instantaneous policy creation, are likely to achieve and maintain a competitive edge.

There is a need to combine rapid data blending with fast data discovery to fulfil customer needs often across multiple insurance domains. Insurers that can meet consumer onboarding expectations at scale and consistently deliver quick servicewhilst ensuring compliance requirements will achieve improved customer journeys and remove a significant layer of cost. 

A recent Capita implementation of KYC and onboarding solutions used in a service modernisation programme for a large Life and Pensions provider significantly reduced the onboarding process from 35 days to one day, taking out a significant layer of cost with an increased Net Promoter Score (NPS) of 50 points.

6 considerations when choosing a digital onboarding and fraud detection platform:

1. Do my customer front end processes allow for instant onboarding?

Traditional insurance onboarding processes are extremely lengthy. Customers are required to answer seemingly endless questions. In most cases the data entry process is manual and data is usually input into various silos. The entire process can take weeks, during which time potential customers are left waiting. In the meantime, the threat of their churning, especially in today’s insurtech age, is a risk many non-traditional providers can ill afford to take.

Modern onboarding processes are nothing like the legacy ones. They typically involve consumers downloading apps on their mobile phones. Through these, they answer a limited number of questions - which usually pertains to information not readily found via public data sources. With improved KYC and onboarding processes, near real-time responses for quotes, policies and premiums can be achieved. Insurtechs like Lemonade and Hippo consistently carry out background checks and provide approvals well within a 10 minute timeframe. The result is a much better consumer experience, and shorter time to value for insurers as well.

2. Is it possible to validate new and existing customers across multiple geographies and insurance domains, and access the relevant validation data sources in an automated fashion?

Insurers face an ever-increasing risk associated with applicants, often needing to access several data sources, and needing multiple integrations. This is often costly and requires engagement with multiple data suppliers .Managing relationships with multiple suppliers becomes highly administrative and time consuming, requiring access to multiple data vendors across bank, device, card, email and geolocation checks, as well as the main credit bureaus.

3. What’s the best way to Improve conversion in customer on-boarding?

In a world of ever-increasing fraud and regulatory requirements, the goal of a frictionless customer journey might seem an impossible aspiration. But insurers need to find ways to reduce customer friction points and provide a multi-threaded scorecard. This means that the right customers will need to be met with the appropriate level of verification, with the objective of minimising fraud whilst keeping - and not losing - good customers in the process. Consequently, it’s important that the fraud and regulatory checks align and have a single API that seamlessly integrate with the process and necessary data sources according to the location, geography, channel and device being used.

4. What’s the best way to lower your business running costs?

It’s preferable to have a solution that can leverage the economies of scale of the volume of checks needed to scale your business. If the platform allows ‘Pay per check’ commercial terms, this provides clarity when it comes to planning pricing and calculating costs. 

5. Do my checks comply with UK and international regulations?

Specifically it’s important to meet key regulatory requirements including AMLD5, PSD2, PCI and GDPR requirements as well as industry-specific regulations, including SRA, FCA and JMLSG for peace of mind, allowing you to focus on your new market growth strategy.

6. Working with a trusted solution that can integrate and scale, and work seamlessly in the background

Working with an established brand and trusted, proven provider, well established in both the public and private sector, provides peace of mind and credibility with your customer base.

Capita provides award winning best in class KYC & AML solutions for fraud & risk management in the financial services industry. Pay360 by Capita offers ‘Optimise Verify’, new technology to help you combat fraud, analyse and accept genuine customers, streamline decision-making processes and increase revenues.

Optimize Verify is an integrated customer identity verification solution, helping insurers and pension providers meet increasingly demanding UK compliance regulations via a cloud-based solution, that will enable fraud and risk management teams to make more accurate automated decisions on customer acceptance, to manage fraud and risk. Insurers and their teams can access to advanced investigation tools that will help them identify fraudulent patterns.

Written by


Gabriel Swift

Account Based Marketing, Capita

Gabriel specialises in Account Based Marketing, With over 25 years’ experience working in IT organisations, Gabriel is passionate about innovation, creative thinking and enabling and supporting Senior Sales stakeholders in achieving their goals.

More of our insights

Read more

Thinking about your organisation?

Get in touch