By Samantha Marsh, director, product management, UK and Ireland, LexisNexis Risk Solutions, Insurance
Yet, as the industry works to ensure that insurance products represent fair value to customers and claims are paid expediently, the value of the average fraud is rising . This leaves insurance providers juggling between providing the best possible experience without leaving the door wide open to fraud – whether opportunistic or organised. Cross market claims data could provide a solution.
Right now, it’s difficult for insurance providers to consider a new motor or home claim in the context of any past claims made across both lines of business, unless they have retained that customer for years. This can put them at a disadvantage when considering the pricing, product offerings or claims process for that customer.
What’s more, pooled claims data has been kept in silos and limited to confirmation of the previous claim declaration by the consumer. Again, this leaves gaps in knowledge for pricing and when it comes to spotting fraudsters claiming on multiple policies across multiple lines of business.
Taking an example of a householder with a leaking roof, if a claims handler could see that the policyholder had made an accidental damage claim with each of their last three home insurance providers and were about to submit another, then their viewpoint might shift towards suspecting fraud rather than bad luck. If they could also see that the property itself has been clear of claims prior to the policyholder moving to the address, and the same individual has had a series of motor insurance claims, that could also be quite telling. By the same token, if they can see this is the first claim the customer has made, that knowledge can help them expediate the claim, avoid unnecessary friction and perhaps even delight the customer with the speed and quality of service they receive. It’s this type of granular data and behavioural insight that has been missing from the market.
Cross market claims data can also help insurance providers predict claims losses based on an individual’s claims history, knowing that a motor loss may be predictive of a home loss and vice versa . For example, we know that in the in the U.S. , the application of claims data to assess risk has found that 41% of consumers under report previous motor claims and people with three or more motor claims incur home claims losses that are approximately 40% higher in cost than those without any motor claims.
Understanding a full picture of claims history upfront also puts insurance providers in a more informed position regarding risk mitigation. For example, if they know a prospective customer’s new home has a history of escape of water claims prior to the customer’s tenure, they can suggest a policy that provides escape of water detection to the new owner.
As we head towards 2024, the first cross-market contributory claims database combining home and motor claims history with cross-search functionality will become available to the UK insurance market. It will deliver a granular view of home and motor claims history for an individual and the asset at the point of quote, mid-term adjustment, renewal and claim to participating UK insurance providers.
Cross market claims data gathered from the market can offer a fresh perspective on a new customer at the point of application and help improve the journey from thereon. By revealing the past motor and home claims for the individual at key points of customer interaction, insurance providers will be a better position to price fairly and appropriately, make policy changes quickly and safely, and expedite the claims process without opening themselves up to fraud.
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