2022 was another year of data driven insurance products. Jeffrey Skelton, MD for Europe, LexisNexis Risk Solutions, Insurance, UK and Ireland, takes a look at the year in review.
Rising claims costs, increases in application and claims fraud, along with new pricing rules, helped create another challenging year for the insurance industry. Data enrichment has been the market’s ally in helping to tackle these challenges, speeding identity verification, flagging the signs of fraud, supporting fair and accurate pricing. But still there was a gap, a big gap in claims intelligence. So by Summer 2022, moves were afoot to create a fundamental change to the way insurance providers rate, underwrite risk and manage claims, through the creation of a richer source of claims data, not just for one line of business but for home and motor claims to be viewed in combination for the first time.
This development will see new level of data enrichment using market wide claims data so that every part of the customer journey, not least the claim experience, widely acknowledged as the industry’s ‘shop window’ can be supported. And this approach only happens through market collaboration and market confidence in the power of contributory databases. In fact, the appetite has been so strong that insurance providers have moved as a force in 2022 to start sharing their claims data with over half the market now contributing – or committed to contributing.
In the same way contributory databases of policy history and NCD history were conceived, created and are now vital elements in the risk assessment process, historical claims data that has started to be shared by insurance providers 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. It will also give them a much better understanding of the claims history for the household. This data has the power to not only support accurate quotes at the start of the insurance lifecycle but what’s truly exciting is its potential in helping to speed up First Notice of Loss (FNOL) and claims processes.
For FNOL, there is little doubt that the future lies in straight through ‘touchless’ processing for 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.
When the industry discusses what is best practice in the claims process, the consensus is that straight through processing will demand high quality data to feed decisioning rules. Using data in this way may reduce the amount of data collection by claims handlers and help them to reach conclusions far quicker. It is no surprise then that insurance providers are investing heavily in new platforms to enable greater efficiency and to deliver an enhanced claims experience. Data, including prior claims data, is going to provide the fuel to make this happen.
We are already seeing the market expanding the use of data enrichment to the claims function to improve the quality of data and direct the claims handlers’ time to focus on obtaining the more pertinent information needed directly from the customer to better help serve their needs.
We’ve also seen claims departments that are under increasing pressure to reduce expenses, identify and battle fraud, and enhance customer service—all while operating within a complex environment
of multi-sourced information. So, ultimately it would make sense that further down the line, the evolution of claims would lie in a platform which embeds more timely, reliable insights into the claims management process, allowing insurance providers to reduce costs and resolve claims faster.
As we bid farewell to 2022 there’s no doubt that economic uncertainty will follow us into next year and fraud will undoubtedly remain a key concern. Leveraging insurance-specific data will continue to be paramount as the first line of defence. By exploiting an ever-expanding pool of data which can be used to hyper-personalise the insurance journey for individual policyholders, insurance providers will be given 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.
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