Merger and acquisition (M&A) activity has ramped up in recent years and is expected to accelerate in 2021[i] as insurance providers look to grow their portfolios, accelerate innovation and improve the customer experience[ii].
On the downside, it has made Customer Data Management one of the market’s key challenges. When insurance businesses come together or divide, the task of maintaining and protecting large databases of consumer information becomes very difficult.
First, data stored in multiple silos risks becoming outdated, incorrect and inconsistent. One of the main risks is that individuals may appear in disparate customer databases within the same insurance group – they might be listed at different addresses or even have different names due to life events or input errors.
At the same time, duplicate or outdated consumer information can lead to wasted budgets, customer service inefficiencies, inaccurate pricing, wasted data storage costs, and even harm to brand reputation – all of which inhibit an insurance provider’s ability to achieve profitable growth and improve their customers’ experience.
What insurance providers need is a single, 360-degree view of each customer they have interacted with, but this can seem a pipe dream in today’s M&A heavy environment.
However, in one of the latest data innovations for the insurance market, insurance providers can now create that elusive consolidated, single customer view, through linking and matching technology. For more than a decade, this technology has provided the bedrock of many of the scoring and identity validation solutions available to the market. The big difference is that it is now available to bring order to insurance provider held customer databases.
LexID® is the unique identifier that works in conjunction with linking technology to resolve, match and manage identity information. It finds common threads across customer records pulling on a wide range of external data sets including public records and policy history data, to help build the picture of the individual. It can help ensure Mrs Smith from Acacia Avenue, Hove who had a motor policy in 2018 is identified as the same Mrs K Smyth from Acacia Drive, Hove who has an active home policy in 2020.
An insurance provider that knows the details of a customer’s wider insurance requirements, renewal dates and up-to-date contact information is much more likely to be able to carry out effective communication at all stages of the customer journey, and in-turn cross sell relevant products at the right time in the customer lifecycle.
Records with a common LexID identifier are linked together using LexisNexis® Scalable Automated Linking Technology, a patented method of linking and clustering data. By pulling together data from multiple touch points – quote, renewal, claims and marketing, insurance providers can build a comprehensive and accurate representation of a customer.
It means that at whatever point they are in their dealings with the customer, the insurance provider will have a comprehensive view of the individual, helping to ensure they offer a relevant and customised experience. It also means they have a consistent methodology for standardisation and matching of consumer data across multiple databases.
Additionally, more accurate information helps insurance providers understand the lifetime value of a customer, and promotes more targeted and efficient direct marketing programmes, as well as accurate pricing offers based on a comprehensive understanding of the overall risk on the individual and their assets at point of quote.
LexID is the “ingredient” that insurance providers can use to perform true customer data management and create the elusive single customer view.
James Burton, Senior Director of Product Management, LexisNexis Risk Solutions UK &I