Q&A: ‘Granular claims data with cross-search functionality has been a big blind spot for the market’ - LexisNexis Risk Solutions

How much of an appetite have you seen from the insurance industry for market-wide claims data and what is driving this demand?

The insurance industry has been vocal about the need for market-wide claims data that allows for searches to be carried out across multiple lines of business, so the appetite for our proposition that does this is strong. In fact, there has been a real force of support for our contributory database, LexisNexis Precision Claims, which means we are moving fast in terms of contributions from the market.

When you consider the multiple challenges facing insurance providers right now - such as the rise in fraudulent insurance claims, increasing consumer willingness to commit application fraud, claims inflation and the need to price accurately to help new and renewing customers access insurance at a price that’s right for their risk - then it’s easy to see how market-wide claims data can support risk assessment at all points of the customer journey.

Access via one platform to highly granular claims data gathered from across the market will help provide a true understanding of the insurance sector’s claims experience with an individual and their personal property.

This will not only help the industry identify undisclosed claims, but in time, we can better predict claims losses based on an individual’s claims history, knowing that a motor loss can be predictive of a home loss and vice versa.

What is the benefit of cross-checking home and motor claims?

With LexisNexis Risk Solutions, insurance providers can access home and motor claims data for a person, a property and a vehicle, including the type of claim, the circumstances and the settlement. This allows insurance providers to cross-check claims history across motor and home for the first time.

Claims data is already used in this way in the US. According to US analysis, the application of claims data to assess risk has found that 14% of consumers have at least one motor and one home claim, indicating a link between both lines of business.

Plus, US insureds with three or more motor claims typically incur home claims losses that are approximately 40% higher in cost than those without any motor claims. So, the benefit of searching across both home and motor claims is clear.

We recently held our annual customer advisory meeting and did a straw poll of the number of insurance providers that were interested in cross-searching home and motor claims. Perhaps not surprisingly, it was a sizeable response.

Granular claims data with cross-search functionality has been a big blind spot for the market so far, potentially leading to less accurate pricing for the consumer and higher loss costs for insurance providers.

The lack of a cross-market view may also have impacted the sector’s ability to fully understand customers’ needs.

For example, if you know an individual has had three or more motor claims, then you know the cost of their home claims could be up to 40% higher. Understanding this may mean ancillary services or different products could be offered to help mitigate or reduce the risk of a home claim in the future.

How can brokers utilise this type of claims data?

Brokers are under huge pressure to deliver the right risks to their insurance partners. If they can present a risk with a full view of the individual’s claims history, plus the claims history for the vehicle or home, they vastly improve their ability to provide quotes that are right first time.

Brokers are also experts in customer service – claims data gives them a fantastic opportunity to personalise the service they offer with risk mitigation advice, or products more suited to the risk presented.

Also, while claims have traditionally been handed off to the relevant insurer, more and more brokers are offering claims services as a value-add to customers and a way to generate loyalty.

It makes complete sense to do this in a market where pricing is so heavily regulated and brokers need to find key points of difference to attract and retain business.