By Samantha Marsh, director, product management, UK and Ireland, LexisNexis Risk Solutions, Insurance
Nearly 70% of those surveyed described revenue leakage as “death by a thousand cuts”.
The root of problem identified by the research is likely to be the vast volumes of customer data insurance providers typically manage, exacerbated by high levels of switching prior to the pricing reforms. Now, with premiums continuing to rise , consumers are being encouraged to shop around so the customer data management challenge continues.
This increases the chances of the same individual appearing multiple times across different databases within an insurance group without the dots being joined up. Aside from creating friction with the customer who may feel they are being asked questions the insurance provider should know, or find they are being targeted with inappropriate products, this may lead to inaccurate pricing at renewal. This all hurts an insurance provider’s ability to meet its regulatory obligations and damages the chances of the customer staying rather than switching. There is also the risk of fraud, wasted marketing budgets and increased operational costs, as well as lost cross-sell and upsell opportunities.
There could be an answer to this problem. It comes down to gaining a comprehensive real-time view of the customer at each stage of the journey but most importantly at the point of quote. By linking and matching disparate customer data within the business, insurance providers can create a single customer view. This can help determine that the right product is being offered for the risk presented, and at the right price. It can provide a sound basis for all future interactions with that individual and for effective data enrichment to understand a great deal more about their risk and needs.
Linking customer records across multiple siloed databases is a complex challenge, especially where an address or name may have changed. However, in response to this fundamental problem for the sector, insurance-specific solutions have emerged in recent years including LexisNexis® Scalable Automated Linking Technology (SALT), a patented method of linking and clustering data. This process involves finding common threads across customer records by pulling on a wide range of data sets, including public and insurance policy history data. Disparate records are then linked into a common LexID identifier.
By pulling together data from multiple touch points – quotes, renewals, claims and inbound customer enquiries – insurance providers can build a comprehensive and accurate representation of a customer’s history and lifetime value. It also means they can utilise a consistent methodology for standardisation and matching of customer data across multiple databases. Perhaps most importantly, it can help determine that the appropriate product is being offered for the risk, and that the premium fairly reflects that risk.
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.
The benefits don’t end there. The single identity for each customer then forms the basis for building a more comprehensive single customer view through data enrichment, allowing insurance providers to gain valuable new insights for example around cross-market claims history from industry-contributed data.
Insurance providers will soon be able to view the home claims for motor customers and the motor claims for home customers, knowing that one can be predictive of the other – even if the customer does not have a claim with that insurance provider. It won’t just be the presence of a claim or claims since the last renewal, it will be the type of claim, the circumstances, who is at fault, the settlement amount for both the person and the home or vehicle. This can bring a fresh perspective on new business and renewal decisions. Greater granularity and context around past claims can even justify the need to offer a premium discount to the customer at renewal. Or imagine the scenario of the customer who has just moved home and is looking for a quote for their new property – industry contributed claims data can confirm the past claims for that property.
At the heart of this contributory claims database solution is exactly the same unique, proprietary technology for linking and matching of consumer data that insurance providers can use to match their own consumer data. This makes it possible to identify previous claims history irrespective of individual subjects moving house or changing their name.
Ultimately insurance providers are under more pressure than ever to maximise the data they already hold. Linking and matching data using a unique identifier such as LexID for Insurance can help them make sense and make better use of customer data across all parts of their business.
|
