Blog: Making data enrichment accessible for smaller brokers

Using third-party data sources to gain a better understanding of a wide variety of outcomes and KPIs such as claim risk, fraud, customer retention and more has been around for nearly 20 years now.

The majority of insurers and large brokers are actively enriching at all stages of the customer lifecycle regardless of their distribution channel, and this has led to such a significant improvement that data enrichment is now considered an essential part of most insurance operations. 

However, it is not as easy for smaller brokers; as is the case with some of the bigger tech platforms, certain data enrichment capabilities can be just as out of reach.

Cost
This is typically down to know-how and cost. Brokers are not experts in data enrichment, nor should they have to be but without a large team of data scientists and analysts, the ability to harness the power of enrichment is daunting.

Large set-up fees and ongoing costs often supplied under onerous contract terms can be equally daunting, particularly if there isn’t a clear path to a positive business impact.

So how can you overcome these issues to use the data and services that will have the biggest impact on your business?

Objectives
Start by ranking the different objectives you are trying to achieve. Do you want better protection against fraud? To reduce early cancellation rates? Is selling more add-on products important or do you want to take on (and keep) better quality business at higher volumes?

A single data source can be interpreted differently to provide insight into several of these objectives, so it is possible to reduce the cost-benefit ratio by squeezing the most out of each source. However, with so many data providers and individual data sets, it can be confusing selecting the optimal blend for your business.

The major credit bureaus provide two main categories of data for enrichment, both of which can help with reducing fraud, predicting cancellations and claims outcomes as well as understanding upsell opportunities:

• Public data containing edited electoral roll, address and identity verification and the presence of derogatory data such as CCJ’s, IVA’s or bankruptcies;
• Private data accessed when offering monthly premiums or via direct consumer consent. This is a much richer source, containing all of a consumer’s credit agreements such as loans, credit card and utility bills.

Additional data sources include databases which share known fraudulent behaviour such as SIRA while CUE can be used to corroborate stated versus actual claims.

You can use vehicle data and datasets like Mylicence for motor risks and for household, suppliers like Whenfresh and Verisk can help understand a property’s value, contents and inherent risks.

Open Banking enables access to a customer’s current account information – with consent. And don’t forget your own data can be interrogated alongside these external sources to save on costs where you already have a detailed picture of the customer. 

Advantage
Smaller brokers may be able to get 80% plus of the overall advantage by just accessing one or two key datasets that are the most pertinent to their businesses.

Manipulating, blending and summarising this data requires a sophisticated approach from the outset to ensure optimal use at all customer touch points and it must be integrated into your IT systems to avoid becoming an obstacle to conducting business.

Finding a partner that can take you through step by step, connect you to incremental sources and manage the complexities can actually minimise costs.

With a clear phased plan, working with your data enrichment partner to move through the levels of solution sophistication at a pace that is in line with your individual business evolution and experience can help you succeed and ensure that data enrichment projects contribute to, not detract from, your key objectives.

Richard Tomlinson is managing director of Percayso Inform.