Risks are always evolving, but data is being amended at a snail-like pace – if data was more accurate, this could lead to better insurance pricing
Imagine being an insurer and needing to make a minor change to consumer data - for example, to update an address or job title - but then having to wait an average of three to six months for this to be actioned by the data supplier.
According to data enrichment and intelligence firm Percayso Inform’s managing director Richard Tomlinson, this occurs because traditionally, the data enrichment market prefers insurers to be reliant on data suppliers, to ensure continued retention of insurer clients, maintain control over data and have the ability to charge insurers more for their services.
However, for the past two years, insurers have been voicing concerns about this model to Percayso Inform because they want more control around updating and maintaining data.
Speaking exclusively to Insurance Times, Tomlinson said: “That is the shift that has started to happen over the last couple of years, but the same hasn’t necessarily happened in the data enrichment market.
”That’s the big problem that we’ve identified that insurers and brokers are crying out for.”
Tomlinson believes that this historic relationship between insurers and data suppliers ”does not work” because ”if insurers want to change anything, it takes a long time – potentially three to six months - and it costs tens of thousands of pounds”.
The knock-on impact for insurers’ end customers is that premiums may not accurately reflect the risk being insured - meticulous data would therefore enable more accurate and realistic insurance pricing.
“Changes to data” do “affect pricing”, Tomlinson emphasised.
This becomes a more pertinent issue when considering how frequently data may need to be updated - for example, as a result of situations such as the Covid-19 pandemic and current cost of living crisis.
Tomlinson thinks that improving this relationship between data suppliers and insurers could contribute to lower levels of fraud, better customer service, lower loss ratios and more accurate pricing.
Percayso Inform has sought to address this dilemma using its cloud-based, no code, software as a service (SaaS) platform, called Percayso Inform Manager - this launched in October 2021.
The tool aims to give insurers control over their rating and data enrichment strategies. It can also be used by MGAs and brokers of any size, operating in both commercial and personal lines.
Data manipulation
Another topical issue Percayso Inform wants to help mitigate is data manipulation, where consumers may tweak specific data points when searching for insurance quotes on aggregator sites, to see what combination will generate the lowest premium. This could happen, for example, when looking for insurance for a new car.
“[Price comparison websites are] a great tool but unfortunately, some people abuse it as they make information up – twisting facts to get low insurance, which is illegal,” Tomlinson explained.
Read: Percayso’s new no code solution gives insurers control over data enrichment
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”Obviously, some consumers will get away with that and get a lower quote, but that just affects everyone – the cost has got to go somewhere.
“The people that manipulate data are massively overrepresented [compared] to the people who [make a] claim or commit fraud. It’s a big problem – about 1.5 million [customers] year-on-year.”
The tool, which is used across Ageas UK’s home and motor products, enables the insurer to pull data from multiple sources to identify where incorrect information may have been provided by potential policyholders.
Ageas is the first insurer to utilise Percayso Inform’s data manipulation offering - Tomlinson explained that the tool helps provide confidence to brokers and insurers that the risks they are attempting to place are “as described”.
In terms of what’s next for Percayso Inform, Tomlinson said it will be “more of the same”.
This includes being better and faster in delivering its services, working on new products, and onboarding more brokers and insurers to partner with Percayso Inform.
PASS NOTES
Does Percayso Inform have plans to expand beyond the UK?
Percayso Inform completed a £3.4m investment round in February 2022, which will support its expansion plans.
This includes branching out into Australia - the firm has set up an entity there, however this is not due to be formally launched until 2023.
Tomlinson acknowledged that there are a lot of opportunities overseas - several of Percayso Inform’s partners and clients currently have operations abroad.
“There’s relatively unsophisticated markets [out] there, which is an opportunity for us to bring that sophistication to data intelligence,” he added.
Have there been any staff changes at Percayso Inform?
Percayso Inform hired Kieran Fisher as its new account director for vehicle data enrichment in June 2022 - Fisher previously worked as head of insurance at Cazoo Data Services.
There is also a need for more developers within the data industry, Tomlinson noted.
Percayso Inform therefore works with a coding bootcamp called the School of Code. The organisation provides three-month coding courses for school leavers or those wanting to change their career to become a developer.
“It’s been good for us to hire developers because it’s so hard hiring developers at present. There’s just a huge demand in the market for developers and not enough of them,” Tomlinson added.
Tomlinson’s own industry expertise has been recognised this year too - he has been shortlisted in Insurance Times’ Technology and Innovation Awards 2022, in the Technology Champion of the Year category.
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