Insurance providers are justifiably worried about the risk of underinsurance [i] as a consequence of the inflationary environment and the cost of living crisis. Our own survey on quote manipulation provided the early warning signs [ii] last year. This is where data enrichment from quote to claim can really help validate information provided by the customer and fill in gaps in detail about the risk that could lead to underinsurance – whether it’s a home, motor or commercial policy. The picture of risk becomes even clearer when insurance providers are able to build a single customer view using linking and matching technology, to create one version of the truth for that customer, based on all previous touchpoints.

The more detail insurance providers can gather at speed – including past claims for the person and the asset using market wide data – the better they can identify where underinsurance may be a risk.  Bring in flags for quote manipulation at the point of quote, and insurance providers are in a more informed position to query the data with the customer beforehand.

Sometimes underinsurance can be ‘accidental’ in that consumers cut back on premiums to save money, and may not truly understand the impact.  For example, a cheaper policy may not have sufficient coverage to either rebuild a property or replace all the contents should the worst happen.  If an insurance provider can understand a customer’s previous cover, they can help them choose a policy that is most appropriate for their needs, not always just the cheapest.  It’s incumbent on insurance providers to offer fair value and data plays a key role in this.

From policy history to quotes to claims data, insurance providers can now understand more fully, the risks and opportunities associated with a new applicant or an existing customer at renewal. Matching, verifying and validating data from across the market can be the most effective way to achieve accurate pricing, help spot the danger signs for fraud and ease the customer journey – helping to ensure genuine consumers face as few barriers as possible in accessing the insurance cover they need. Afterall, the risks of not taking insurance generally far outweigh the cost of cover.

[i] https://www.aviva.com/newsroom/news-releases/2023/01/aviva-risk-insights-report/

[ii] https://risk.lexisnexis.co.uk/about-us/press-room/press-release/20220511-quote-intelligence

Content provided by Martyn Mathews, VP, personal and commercial lines, LexisNexis Risk Solutions, Insurance, UK & Ireland