When a customer applies for auto insurance or renews an existing policy, to appropriately price for risk you need to know as much about them as possible―including prior claim activity. Despite your best efforts to get that data, you could still be missing crucial information. That knowledge gap could be very costly.
Previous claims are a leading rating variable in auto insurance. You need to know if there has been prior claim activity both at and after underwriting so you can price and adjust premiums accordingly.
What creates the knowledge gap?
There are two primary reasons you might not know about a prospect’s or a policyholder’s prior claim activity.
First, the claim process can be very lengthy, especially in the case of a large claim or if litigation is involved. If a policyholder switches to another company while a claim is still open, the new carrier won’t have had access to information about the pending claim at time of underwriting, because the claim hadn’t closed yet. At renewal, the carrier would likely simply renew the policy based on the original information obtained at underwriting, which would not have taken that claim activity into account.
Second, a policyholder could have malicious intent in making a switch before a current claim is closed to avoid paying a higher premium with both their existing carrier and a new carrier. After all, at-fault accidents can increase premiums by as much as 40%. In this case, the prospect would deliberately fail to disclose the claim, either at underwriting or at renewal. While we would like to think that human beings are honest and genuine, it may be true that not all of us are honest and genuine all of the time when it comes to our insurance.
Clearly, when it comes to prior claim information, you can’t fully rely on either customer input or just current closed claim data to fill this knowledge gap.
Close the knowledge gap with claim activity notifications
LexisNexis® Active Insights ― C.L.U.E. at Renewal
, a component of the LexisNexis Active Insights platform, solves the problem of missing claim activity at underwriting by proactively notifying you of claims that were contributed by another carrier and were discovered, updated or closed post-underwriting.
The solution leverages one of LexisNexis core capabilities; contributory databases. The LexisNexis® Current Carrier
contributory database along with the LexisNexis®
contributory database is used to analyze policyholders and locate new or newly changed claim information about those policyholders. It then sends notifications so you can consider that information during the renewal process, or make a policy adjustment in real time.
By alerting you about claims activity at any time prior to the point of renewal, Active Insights C.L.U.E. at Renewal helps inform policy decisions that can lead to improved profitability and loss ratios while freeing resources to work on policies that require more scrutiny.
Why use C.L.U.E. at Renewal?
Prior to the release of C.L.U.E. at Renewal, your option was to sift through results delivered in a batch, based on dates to identify policies that require reconsideration before renewal. That’s a very time-consuming and resource-intensive process. C.L.U.E. at Renewal does this work for you, automatically, throughout the life of the policy, right up to point of renewal―saving you time and money.
By using C.L.U.E. at Renewal, we believe you can look forward to an increase in net premiums and a decrease in premium leakage, resulting in overall improved loss ratios. Our estimates are that C.L.U.E. at Renewal can drive as much as a 4:1 benefit, or an ROI of 400%. With approximately 7 million policyholders renewing a first renewal annually, the industry opportunity could be as much as $157 million per year.
Close your knowledge gap now
Active Insights C.L.U.E. at Renewal proactively discovers missed claims so you can price with precision, boost profitability and close your knowledge gap.
To learn more about how you can predict, monitor and detect changing customer needs, visit our Active Risk Management