How are insurance companies using data?
When an insurer from the motor industry discovered a fraudulent claim sourced back to organised crime, he phoned his colleagues to warn them to watch for this latest scam.
The insurers he spoke to from across the industry were relieved to get the heads up as they knew that insurance fraud was rising and their company's fraud detection methods were lacking.
This scenario of ringing around to warn others of a fraud threat is not restricted to the motor industry. Insurers across many classes have yet to adopt digital, data-driven practices for identifying and collaborating against fraud. Compared to sectors like banking, insurers have been slower to transform their raw data into rich, actionable insights that can build defences against fraudsters and provide a myriad of benefits across the value chain.
To find out how to harness the potential of insurance-related data, Neil Blount, Insurance Growth and Transformation Executive, and Dr. Carlos Leung, Principal Data Analytics Designer at Equifax Insurance Solutions, came together for a discussion. Here's a summary of the key points from their podcast "Are insurers optimising the use of data?".
Identifying misinterpretation and non-disclosure in insurance
Do you have a pool? What is your roof type? What is your income? When applicants and claimants reply to these questions, how confident are you as an insurer that the information matches reality?
Leung recalls back to his engineering days - pre-Google maps - when he helped an insurer verify the correctness of applicant information by studying property images to identify the presence of pools or tall trees.
Fast-forward to today when we know how important it is to confirm the accuracy of data about the business, people, and assets being insured. Data-driven identity verification, validation and fraud solutions can help insurers reduce misinterpretation and non-disclosure. Using internal and external data, insurers can reduce their blind spots to discover the following:
- Is the person whom they say they are?
- Is their claims history fully disclosed?
- Has their income been over or under-estimated?
- How long has the business been in operation?
- Who are the directors?
- Are the directors heavily indebted?
- And more
Reducing claims and premium leakage
Claims and premium leakage can occur when customers don't accurately disclose information like income, yet verifying employment, income, and education has traditionally been a time-consuming manual process.
Now advancements in technology and the ability to access payroll and other real-time data have made it possible for these verifications to occur within seconds. Blount emphasises that with these data-driven solutions, insurers can reduce leakage without negatively impacting the customer experience.
In the Open Data world of today, the opportunities are ripe for insurers to leverage internal and external data for better business outcomes and profitable growth. It's how insurers use data to fill in information gaps - the "unknown-unknowns" that will define success in a competitive market.
Listen to the full podcast here - Are Insurers Optimising the Use of Data - and find out how wearing shoes in Africa relates to data analytics for the insurance industry!
To learn more about Equifax Insurance Solutions, click here to contact our team.