Modern Insurance Magazine Issue 65

Consumer Duty
Defines the Role
EDITORIAL BOARD
Contrary to popular thought, e2e is not a salvage
company.
Of course, our supporting network members are some of the best
salvage agents in the country. Bringing that array of talent and
capability together, working on behalf of our insurer and claims
manager clients, is a real privilege. Providing vehicle auction, a
reclaimed parts portal, and national initiatives such as our Sustain 360
ESG programme gives us and our supplier members the opportunity
to provide our clients and customers with real added value.
However, these platforms are merely a ‘means to an end’. It’s clear
to us that we form an integral part of the Consumer Duty chain, and
our fundamental role is to help our clients and consumers alike when
it comes to maximising returns from an otherwise wasted asset, and
minimising the massive inconvenience that a total loss causes for
everyone.
In that sense, it is the Consumer Duty that defines our real purpose.
It’s often easy to get lost in the technicalities of managing the
consequences of a total loss decision and, of course, we can never
forget that there are indeed a vast number of issues that need to be
managed - from the safe and environmentally compliant disposal
of vehicles, through to the best practices of our auction site and
automated matching of reclaimed parts supply with demand.
Customers Drive our Behaviours
But we must always see the end-user customer as being our ultimate
point of reference. Insurers, their claims managers (if they outsource)
and their suppliers are always working on behalf of policyholders. In
our case, every last pound of realised sales revenue from auctions
goes towards keeping premiums lower than they otherwise would
be. Maximising the use of reclaimed parts helps to keep repair costs
down, which, in turn, reduces upwards pressure on costs. Countering
fraudulent claims not only helps to catch criminals but also, once
again, provides protection for the end customer.
Thought of this way, the Consumer Duty is not a set of obligations,
regulations, or policies. Instead, it is the very definition of who we are
as a business – and it should define every business in the financial
services sector. We only exist to service the needs of our customers,
and if we get this right, then sustainable profits will naturally flow.
Of course, there are some who will put the pursuit of profit ahead of
almost every other consideration. There are those who will seek to
bend the rules. There are those who resent the Consumer Duty.
Here at e2e, we don’t work with those people.
Jim Loughran,
CEO, e2e Total Loss Vehicle Management
Reacting to 2024’s
Key Trends
This year, we’re seeing a heightened focus on
controlling claims costs, improving operational
efficiency, and tackling fraud. This is where data
enrichment - for both the individual and the vehicle
or property, through increasingly granular realtime
data - has the power to reduce loss costs
for insurance providers, and lower premiums as a
result.
In motor insurance, knowing to what extent the safety technology on
a car cuts accident risk is crucial, and it is becoming even more critical
as car technology evolves. It’s why we have already taken huge steps
to ensure the insurance sector understands this technology in order to
price effectively through our award-winning advanced driver assistance
system (ADAS) data enrichment solution – LexisNexis® Vehicle Build.
Furthermore, our strategic alliance with Thatcham Research means
insurance providers will have streamlined and automated access to
Thatcham Vehicle Risk Data (VRD) 1 for the first time, something which
is integral to insurance pricing and consistency over the matching
of vehicles to Thatcham VRD. The more intelligence that insurance
providers can access on the specific vehicles they are insuring, the
more accurate the premium will be. They will also be more likely to
deliver a swift claims experience.
From a fraud perspective, email address intelligence through
LexisNexis® Emailage® Rapid is being used to flag the risk of fraud for
insurance providers in a seamless and frictionless way at the point
of quote. Highly granular cross-market claims data coming from
LexisNexis® Precision Claims later this Spring will add further detail to
the picture, helping insurance providers identify fraudulent behaviours
at quote through to claim.
Fraud prevention also extends to quote manipulation. Responding to
this challenge, it is now possible to uncover changes between quotes in
key fields prone to manipulation. This helps protect insurance providers
from inaccurate pricing and potential fraud, while consumers avoid
their policies being rendered null and void if deliberate misstatements
are uncovered at claim.
Finally, in a recent report from data consultancy firm Sagacity titled
‘Missing Billions: The Impact of Revenue Leakage on UK Business’, 95%
of the insurance providers surveyed said revenue loss comes from the
wrong policy for the customer or charging the wrong amount. This
is likely to be down to the vast volumes of customer data insurance
providers typically manage, increasing the chances of the same
individual appearing multiple times across different databases within
an insurance group without the dots being joined up. This can lead
to inaccurate pricing at renewal, the risk of fraud, wasted marketing
budgets and increased operational costs, as well as lost cross-sell and
upsell opportunities.
Insurance providers can gain a comprehensive real-time view of the
customer at each stage of the journey - but most importantly, at the
point of quote - using linking and matching technology to create a
single customer view. This can help guarantee that the right product is
being offered for the risk presented, and at the right price.
Tom Lawrie-Fussey,
senior director of product management, UK and Ireland,
LexisNexis Risk Solutions, Insurance
1
Thatcham Research Vehicle Risk Data is a live and extensive, industry-standard dataset that
contains key information about insurable cars, LCVs and motorcycles. Thatcham Research
is solely responsible for maintaining this dataset with each vehicle containing more than 100
individual data points.
Using data exclusively supplied by vehicle manufacturers and checked by Thatcham
Research’s expert data team, each vehicle is assigned a unique eight-digit ABI identification
code. This translates into a standardised description of the vehicle that is used by the entire
insurance industry.
Directly sourced data is also used to generate a Group Rating score for every vehicle. Ranging
between 1 and 50 for cars and 21 to 50 for LCVs, scores indicate the level of insurance risk
associated with the vehicle.
MODERN INSURANCE | 19