Transforming fraud detection in insurance

Martyn Mathews, VP, personal and commercial lines, UK and Ireland for LexisNexis Risk Solutions, Insurance

 

Any method of fraud detection needs to find a balance between spotting fraud and delivering a streamlined, friction-free quote or claim journey for the vast majority of customers who are genuine. Fortunately, the data and technology now exist to flag the signs of fraud without impacting the honest customer’s experience. In fact, the best fraud detection solutions improve that journey as they allow fraud teams to prioritise investigations with those customers flagged as posing a risk.

For example, LexisNexis® Emailage® Rapid uses the customer’s email address and other personal information provided during the application to score the insurance application for the risk of fraud. This calls on a network comprising of 5.9 billion digital identifiers, 30 million confirmed fraud events and over 82 thousand fraud events, on average, shared daily.

Ghost brokers will often supply their own email address for documentation from an insurance provider. It therefore makes sense to check that email address and its digital footprint as early in the application process as possible.

Quote manipulation is another big problem in motor insurance. In a recent UK study[i], 48% of motor insurance buyers thought it was completely or somewhat acceptable to deliberately misstate information to obtain a lower quote. Responding to this issue, LexisNexis® Quote Intelligence uses shopping behaviour data to help flag if information for a quote is being manipulated to get a cheaper price or for policy ‘fronting’.

Detail on the vehicle itself such as mileage, MOT and any modifications can also be verified for prevention of deliberate misstatements using solutions such as LexisNexis® Vehicle Insights. Undisclosed claims can also be uncovered with LexisNexis® Precision Claims, a cutting-edge market-wide contributory claims database offering a cross-market view of home and motor claims history for the first time, for both the person and the asset.

The more that can be done to stop fraud at the front door, the better, and that’s why many of our solutions have been developed for use primarily at point of application and quote. But clearly there is a big opportunity to bring data enrichment into each and every customer touchpoint to help fight fraud, not least at first notification of loss (FNOL). LexisNexis Precision Claims and LexisNexis Vehicle Insights are prime examples of data enrichment solutions that can work with great effect at all stages of the customer journey.

Finally, insurance providers who have attained the ‘single customer view’ will always be at an advantage in the battle against fraud. It’s why we have been working hard to help insurance providers fully leverage their own customer databases using our unique identifier, LexID®, and proprietary linking technology to resolve, manage and match information to create one consolidated view of the customer.

 

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

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