Data enrichment evolves to solve insurance dilemmas

Authored by Dan Cicchetti, sr. director of insurance client engagement, U.K. and Ireland, at LexisNexis Risk Solutions

Rising claims costs, increases in application and claims fraud, and increasing regulation have made data enrichment an ally of the insurance market. Helping to tackle these challenges, data enrichment solutions now speed identity verification, flag the signs of fraud, support fair and accurate pricing and enable insurance providers to make their propositions far more personalised and streamlined for the customer. 

Keeping pace with the changing nature of risk

It’s not easy being an insurance provider. It might even be fair to say that the job of protecting people and businesses against unknown risks is becoming all the more challenging. Considering the changing nature of risk from the climate, the cost-of-living crisis and the emergence of new technologies, including the increasing number ADAS-equipped cars and electric vehicles on the road. Cars are now far safer but much more costly to repair. It is vital that insurance providers understand these changing risks at all points of the customer journey without heavy reliance on customer-provided information. Data enrichment has provided the answer and will continue to evolve to help insurance providers understand the risks they face today and anticipate those coming tomorrow.

Filling the gap in claims intelligence

Take for example, claims intelligence. There has been a big gap in the market for a more cohesive view of an individual’s claims history across home and motor. This has led to the creation of a richer source of claims data, enabling home and motor claims to be viewed in combination for the first time. The appetite for this has been so strong that insurance providers have moved as a force to start sharing their claims data.

In the same way, contributory databases of policy history and NCD history are now vital elements in the risk assessment process. Historical claims data through LexisNexis® Precision Claims will deliver a market wide view of home and motor claims for both the person and the asset. This means an insurance provider should be able to access the claims history for a home or a car before the customer owned it. This data has the power to not only support accurate quotes at the start of the insurance lifecycle but also has major potential to help speed up First Notice of Loss (FNOL) and claims processes.  

The true picture of the metal

In a similar vein, insurance providers have been hungry to know more about the status and history of a vehicle they are insuring. With 8 in 10 new cars now coming with some form of driver assistance, insurance providers can now understand the presence and performance of ADAS on a specific vehicle through the data enrichment offered by LexisNexis® Vehicle Build, at the point of quote.

The next evolution in data enrichment will see the delivery of more granular data on the ‘metal’ to insurance providers through LexisNexis® Vehicle Insights.  This has become a key priority given the diverging trends of cars getting older and maintenance being impacted in the cost-of-living crisis, alongside new cars featuring increasingly sophisticated safety technology. Again, there was a gap that needed to be filled on the vehicle’s full status and history as well as the maintenance behaviour risks we have uncovered, to enable a comprehensive, real-time assessment of motor insurance risk. 

Better Data on Basements, Trees and Windstorms

Of course, there are some risks that are more challenging to predict but even so, data enrichment is proving to be a key ally in helping insurance providers understand and mitigate the increasing risks of perils such as flooding including flash flooding of basements, subsidence, windstorms and fire. Insurance providers can now make a full, fast and accurate assessment of environmental risk, from quote to claim, using geospatial data intelligence including new innovations such as the LexisNexis® Basements Indicator, Bluesky International Ltd’s National Tree Map™ (NTM), and LexisNexis® Windstorm Model.

Faster FNOL

Finally, for first notice of loss (FNOL), data enrichment can help speed the majority of claims allowing claims professionals to focus on more complex cases. In essence, it means a better service for the claimant and better management of claims costs. 

We are already seeing the market expanding the use of data enrichment to the claims function in order to improve the quality of data and focus the claims handlers’ time on obtaining the more pertinent information needed direct from the customer, to help serve their needs. 

An ever-expanding pool of data

Through data enrichment and its continued evolution, insurance providers can exploit an ever-expanding pool of data.  This can personalise the insurance journey and give insurance providers the power to develop a better understanding of their customers to support fair pricing, a policy appropriate for their needs and a swift resolution at claim.