Dan Cicchetti, sr. director of insurance client engagement, U.K. and Ireland, at LexisNexis Risk Solutions, reports on the significant benefits of data enrichment across the insurance industry. 

A host of challenges from rising claims costs[i] to increasing fraud[ii] have reinforced the value of data enrichment to the insurance market. Whether it’s speeding identity verification, flagging the signs of fraud, or supporting fair and accurate pricing, data enrichment helps insurance providers make far more informed decisions for customers, at the speed they expect. More than this, helping customers to appreciate the worth of insurance is particularly important now that insurance premiums are rising in the midst of the cost-of-living crisis[iii] – making insurance a far more personalised, engaging and valued experience.

Insurance providers who use data to learn more about the customer and the home or vehicle put themselves in a great position to deliver a service that exceeds expectations. To that point, we fully support the ABI’s ‘Power of the Premium’ Campaign launched in July[iv].

Fundamentally, the role that data enrichment plays in understanding the changing nature of risk cannot be overstated. Insurance providers are seeing risk alter from our changing climate, the cost-of-living crisis and the emergence of new technologies, including the increasing number of electric vehicles and cars equipped with Advanced Driver Assistance Systems (ADAS).

It is also important to recognise that some of the most powerful data enrichment solutions only happen with market collaboration in contributory databases. Consider the digitisation of No Claims Discount (NCD) proof, made possible by the majority of the motor market sharing their NCD data. Motor policy history data can also help identify cancellation risk or a heightened claims risk if there has been a gap in cover, when shared across the market.^[v]

In 2024, we will see the launch of LexisNexis® Precision Claims to deliver a cross-market view of home and motor claims for both the person and the asset for the very first time. Essentially, this means that regardless of the line of business, insurance providers can gain a total view of the individual’s home and motor claims history – as well as that for the property or the vehicle. These insights have the potential to be game-changing for the market. Again, this has only been made possible because insurance providers understand the value of sharing their data, trusting that they will gain far more from the database than they put in.

Now that we have built a high level of insight around the individual, the asset is the next evolution in data enrichment. To that end, insurance providers can now understand the presence and performance of ADAS on a specific vehicle through the data enrichment offered by LexisNexis® Vehicle Build, at the point of quote.

With the diverging trends of cars getting older^[vi] and maintenance being impacted in the cost-of-living crisis^[vii], more granular data on the ‘metal’ has become a priority and is now delivered through LexisNexis® Vehicle Insights.

With regard to the property, data enrichment is playing a key role in helping insurance providers understand and mitigate the increasing risks of perils such as flooding, including flash flooding of basements^[viii], subsidence, windstorms and fire.

Data enrichment solutions will continue to evolve as the risks faced by the insurance market continue to change. These solutions will always focus on giving insurance providers new insights about the customer and their asset, which can offer competitive advantage in how they price and personalise their services, not to mention protecting risks through a better understanding of their customers’ needs.

[i] https://www.abi.org.uk/news/news-articles/2023/2/rising-cost-pressures-push-up-the-price-of-motor-insurance/

[ii] https://www.aviva.com/newsroom/news-releases/2022/12/aviva-reports-16-percent-rise-in-application-fraud-over-same-period-in-2021/

[iii] https://www.abi.org.uk/news/news-articles/2023/5/above-inflation-costs-for-insurers-continue-to-put-pressure-on-motor-insurance-premiums/

[iv] https://www.abi.org.uk/news/news-articles/2023/7/power-of-the-premium/

[v] LexisNexis Risk Solutions analysis

[vi] https://www.ibisworld.com/uk/bed/average-age-of-motor-vehicles/44067/

[vii] https://bookmygarage.com/blog/two-thirds-of-drivers-cut-vehicle-usage-cost-of-living/

[viii] https://www.london.gov.uk/press-releases/mayoral/mayor-warns-londoners-in-basements-about-flooding