Modern Insurance Magazine Issue 62

EDITORIAL BOARD
Supporting Insurers with their
Consumer Duty obligations
At the end of July, insurers were required to
implement the FCA Consumer Duty rules for
new and existing products and services for sale
or renewal. Significant process re-engineering
and monitoring continues to be necessary to
reflect and fulfil the regulations. In the claims
environment, we believe that service delivery from
external providers must align with insurer strategy
and procedures to meet the FCA requirements.
At e2e, we help our insurer clients to help their customers and, in
doing so, we are an important part of the Consumer Duty distribution
chain. Our job is to satisfy our clients’ needs and, nowadays, this
necessitates an awareness of their responsibilities under Consumer
Duty. We regard ourselves as the supportive arm of an insurer,
who must fulfil the requirements of Consumer Duty principles and
practices in turn.
A total loss motor claim is a stressful situation for insurance
customers. As experts in total loss vehicle management, we add
value for our insurer clients, and for their customers as a result.
Our professional contact centre delivers a high-quality customer
experience, and can supplement the insurer role where needed.
Clear communication is our priority, including careful and appropriate
management of vulnerable customers. The loss of a vehicle means
different things to different customers, and we treat each situation
individually with empathy and understanding. This ranges from
collecting the vehicle, which in some cases will be directly from the
policy holder, to carefully packaging and returning personal effects
which may have been left in the vehicle. We ensure all personal
information is removed from infotainment systems, giving customers
confidence that their personal data is securely handled in line with
GDPR requirements. Reflecting different customer needs, we also
offer specific services for cherished plates and classic cars.
We help to move vehicles swiftly through the claims life cycle,
providing swift, accurate engineering assessments to determine
whether a borderline vehicle is repairable or a total loss. Access to our
network’s comprehensive 0.5M stocks of quality-graded, warrantyassured
reclaimed parts means our insurer clients can offer choices
to their customer. In many cases, it can become economically viable
to repair a borderline total loss vehicle with reclaimed parts. Where a
vehicle is a total loss, we accurately represent the insurer philosophy,
negotiating settlement where required using insurer guidelines in line
with ‘fair value’. Furthermore, we have invested in a state-of-the-art
auction platform, enabling us to further maximise salvage auction
returns. This also facilitates the insurer in supporting the customer
and offering ‘fair value’ when a settlement is being determined.
Our role is far greater than the provision of salvage services; it
encompasses the management of customer loss. Our insurer clients
trust us to get it right, reflecting their Consumer Duty strategy and
boosting their reputation. At e2e, it’s a role we truly relish.
Jim Loughran,
CEO, e2e Total Loss Vehicle Management
Mitigating the Effects
of Rising Claims Costs
The motor insurance market is under immense
pressure from claims inflation. Labour costs
are up by 40%, and vehicle repair costs have
risen by 33% 1 . For every £1 that motor insurers
received in premiums, £1.10 in claims and
operating costs were paid out in 2022 2 .
However, motor insurance providers can claw back some control
through effective use of the latest data enrichment solutions.
Innovations in vehicle, person and place data delivered through one
gateway can help them understand the risk of a claim and how much
that claim could cost, to a high degree of accuracy.
Take vehicle centric data as an example. It is now possible to build
an immediate and granular picture of the history and value of a
vehicle - as well as the risk related to how well that vehicle has been
maintained - through LexisNexis® Vehicle Insights. The beauty of this
data enrichment solution is that it can be used in tandem with unique
information on vehicle build (via LexisNexis® Vehicle Build) to identify
the presence and performance of Advanced Driver Assistance Systems
(ADAS) features for that specific vehicle. Therefore, insurance providers
can instantly understand the features that the vehicle was ‘born’ with,
its life after leaving the production line, and what that means from a
risk perspective.
Insurance providers can then incorporate predictive information on the
drivers/additional drivers of the vehicle (such as their policy history)
through solutions such as LexisNexis® Policy Insights. For example, past
cancellations can equate to 70% higher loss cost, and an individual
with multiple NCD entitlements at any one time has a 33% higher loss
cost. In addition, individuals with gaps in cover have a 55% increased
likelihood of cancelling a policy mid-term 3 .
A cross-market view of claims history for the car or home as well as
the individual through LexisNexis® Precision Claims offers immense
predictive potential. This is really evidenced in U.S. analysis 4 , which
shows that people with three or more motor claims incur home claims
losses that are approximately 40% higher in cost than those without
any motor claims.
The next step could be to bring in more detailed information about the
property using geospatial data intelligence to understand theft risk,
and indeed garaging and/or parking at the address.
There are many factors involved in understanding motor insurance risk,
but by using one gateway to some of the market’s most powerful data
enrichment solutions, insurance providers can make more informed
decisions that could help to mitigate the rising cost of claims.
Tom Lawrie-Fussey,
senior director of product management, U.K and Ireland,
LexisNexis Risk Solutions
1 https://www.abi.org.uk/news/news-articles/2023/8/sustained-cost-pressures-oninsurers-push-the-average-price-of-motor-insurance-to-a-record-high/#:~:text=The%20
average%20premium%20paid%20for,this%20data%20back%20in%202012.
2 https://www.ey.com/en_uk/news/2023/06/ey-uk-motor-insurance-results-analysis
3 Based on LexisNexis Risk Solutions Analysis
4 Based on LexisNexis Risk Solutions internal studies of U.S. personal lines claims histories
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