The time is ripe for a fresh approach to identity verification in insurance
The pressure on household finances this year has been well documented and insurance providers are all too keenly aware of the environment this can create for application fraud – both organised fraud such as ghost broking and opportunistic fraud including deliberate misstatements in applications. At the same time, the industry is under constant pressure to deliver the most accurate premium quote they can to customers based on a 360 degree view of their risk. All this has heightened the need for robust and swift identity verification tools in insurance to protect genuine customers from the impact of fraud, support precision pricing while delivering a streamlined customer journey.
Insurance professionals have been accessing data from public records to help verify identities during the application and onboarding process, for some time now and this has worked well. However, through industry collaboration, the market is now able to reap the benefits of insurance specific ID verification solutions that offer matching capabilities that can exceed credit bureau-based solutions.
By insurance specific, we mean built on insurance industry contributed data gathered from across the market for the past 6 years. We know that when an insurance provider uses this type of data through solutions such as LexisNexis® Risk Insights, the insurance-specific customer verification and enrichment solution, they are able to verify that an individual lives at an address 93%1 of the time for the traditional UK insurance market.
Matching, verifying and validating customer data is the first step in combatting fraud, but more than this, when you know with certainty that your customer is who they say they are, you have a firm basis for building on that identity with your own data and through data enrichment to better understand and respond to the needs of that individual.
This is where insurance customer data management and identity solutions such as LexID® for Insurance can work to great effect. Linking and matching technology enables all the data held on a customer to be consolidated into one ‘true record’ which is then assigned a unique LexID. This builds the most comprehensive foundation for future dealings with that customer and means that when a customer applies for insurance, insurance providers can immediately identify if they are genuinely new or known to the business.
This consolidated customer view can then be further augmented with market wide policy history, quote and claims data. Add to this insurance specific data enrichment and verification through LexisNexis® Risk Insights, and the ability to assess and validate identity is even greater, opening the potential to quote for more business.
However, not all innovations in ID verification stem directly from insurance data – email address being a great example. Email is so heavily attached to a person’s identity, so analysing the digital footprint accompanying an email is becoming true fraud detection gold. By using billions of transactions from global payment processors and other online industries, email intelligence based fraud prevention tools such as LexisNexis® Emailage® Rapid can provide an instant risk score to indicate whether an ID is genuine or potentially fraudulent.
As the cost of living crisis bears down on households across the UK, insurance providers know they have a responsibility to price accurately and help ensure the cost of fraud is not passed onto consumers. Insurance professionals should think holistically, factoring in the increased customer understanding and accurate decisioning benefits that advanced identity verification built on insurance specific data and email intelligence can bring.
Maree Turner-Pearson | Product Manager | LexisNexis Risk Solutions, Insurance
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