LexisNexis Risk Solutions has unveiled Attract™ for Motor, which it says is the sector’s first market-wide, policy data-based risk score specifically designed for claims losses.
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In the face of high levels of fraud and escalating claims costs, the need to gain a “consolidated understanding” of individual risk, based on shared intelligence on policyholders, has become a matter of urgency for motor insurance providers, according to LexisNexis.
The tool can deliver the scoring direct to insurer and broker systems with “sub-second response times” at the point of quote, said James Burton, director of product management for insurance, UK and Ireland.
“This speed is possible because we use proprietary data sources and highly advanced analytics technology,” Burton said.
Increasing sophistication of analytics models and the power of big data means that the way risk is assessed – and the ability to gain a consolidated view of the customer – is fast evolving too, Burton told Insurance Business.
“A market-wide insurance specific risk score is not just the next step in motor insurance pricing, it is the way forward for the sector and its customers, at a time when the delivery of fair and accurate pricing has never been more important,” he said.
Attract™ for Motor will give insurance providers an immediate understanding of risk by utilising proprietary motor insurance data – meaning that it will be a “stronger indicator of loss” than an insurer’s own custom score model, or general financial scores, according to LexisNexis.
For brokers, the system could help in managing costs, Burton said.
“Cancellations are a huge point of pain for brokers, and we know that people who cancel in the first 30 days are twice as likely to cancel another policy, so brokers can reduce their acquisition costs, and process large volumes of data in an efficient way helping to increase quotability, as well as identify the lifetime value of a customer,” he explained.
“Attract™ for Motor is built specifically to predict insurance loss unlike other scores,” Burton went on to say.
“When looking at Attract™ for Motor as a predictor of claims cost, we found that the worst 10% as segmented by Attract™ had a 200% higher claims cost than average. Conversely, those in the top decile, or the top 10%, had a 41% lower claims cost than the average.
Article is care of www.insuranceage.co.uk