Product Focus – DNA Dimensions – Uncovering the DNA of every street

DNA Dimensions is the latest in our suite of Risk Insight© products.  It has been designed to provide insurers with a Detailed Neighbourhood Analysis (DNA) across a range of demographic themes. This delivers a deep insight at a level of granularity to improve pricing models and risk selection capability.

DNA Dimensions is a set of orthogonal or uncorrelated risk scores explaining the variation across the vast range of demographic data sources held by Business Insight, including the latest Census information, geodemographic, environmental data and spatial data. DNA Dimensions provides a unique set of scores across a range of themes for every postcode in the UK. Candidly, this can be fed directly into insurer pricing models to explain more variation in the pattern of risk and improve the accuracy of risk pricing.

DNA Dimensions utilises a statistical analysis technique called ‘principal component analysis’ and has been applied to the full range of demographic data assets within Business Insight to uncover the underlying dimensions present down every street.  The range of themes output in the solution are essential to understanding risk such as wealth, affluence, family composition, rurality and industry. These explanatory risk themes also give a detailed insight as well as increasing the understanding of each geographic location.  Every neighbourhood of the UK has been analysed and has been given a different set of scores that uniquely describes each location across the range of factors in the DNA Dimensions product, this helps to understand:

  • The make-up of the local area
  • Affluence
  • Property turnover
  • Levels of urbanisation/ rurality
  • Housing type
  • Life stage
  • Occupation
  • Employment

The scores can be easily included in risk pricing and rating models to increase accuracy and to fill gaps where insurers have little or no experience data.  Our initial tests against experience data have shown DNA Dimensions to add considerable value to risk pricing models, indicate potential to help drive better risk selection and enhance underwriting performance.

Business Insight is focused on providing the insurance industry with innovative products that add value and drive business growth. Business Insight invests a significant amount in Research and Development every year and our expertise in statistics, big data processing as well as knowledge of insurance has ensured DNA Dimensions is relevant, precise and effective as an external data feed.

If you would like to find out more please get in touch via your Account Manager or contact our support team on 01926 421408.

 

5 key benefits of data enrichment for the Insurance Industry

resonateData enrichment provides both insurers and brokers with an opportunity to leverage the vast amount of information they already have and combine it with external data sources to improve business acquisition and enable them to more accurately assess and price risk at the point of quote.

In the past, insurers and brokers had little choice but to rely on information collected at the point of quotation, most often provided by the proposer.  But now with increasing levels of new business being shopped for and written online, there is access to a wealth of public and private data which includes data relating to the individual, their location, property, demographic and lifestyle information.

This data can be used to try and predict customer behaviour, analyse trends, uncover new patterns and improve risk exposure.  Real-time data validation at the point of quote allows additional facts relevant to the risk to be discovered. This has a number of key benefits for insurers and brokers which include:

  1. Increased fraud detection rates

Insurers are experiencing unprecedented levels of application fraud activity. ABI research shows that in 2014 insurers uncovered 212,000 attempted dishonest applications for motor insurance, which is equivalent to just over 4,000 every week.  Statistics show that drivers who lie on their initial application are 66% more likely to make a claim in the future, so the more focus insurers and brokers can put on their initial assessment of drivers, the better.  Patterns, trends and anomalies can be spotted quicker and costs savings can be made by earlier assessments of fraud and identifying early cancellation cases.

  1. Improved competitive position

Data enrichment helps to provide insurers with a single customer view by combining public and private data with quote intelligence.  Insurers are, therefore, able to more accurately assess their customer base and be more selective in terms of the risks they want to underwrite. Thus avoiding poor performing risks and more easily identifying their best customers and those with the highest lifetime value for improved profitability.

  1. Enhanced customer loyalty

Data enrichment can provide insurers and brokers with a richer, deeper understanding of their existing customers. Adding valuable business data to individual records in your database can transform your customer data into customer intelligence. A wider knowledge of your customers’ behaviour and lifestyle means that products can be specifically tailored thereby enhancing customer loyalty and retention.

  1. Greater cross-selling opportunities

A better understanding of your customers leads to more relevant targeting and more opportunity to cross-sell complementary products.  By verifying the customer is who they say they are at point of quote and assessing their credit worthiness, those customers with a higher propensity to purchase add-ons can be identified.

  1. Reduced costs in settling claims

The claims process is time-consuming and demands a lot of resources.  Assessing the propensity of the customer to fulfil their credit commitments at application stage, means that scrutiny of the data at claims stage is reduced, enabling claims to be dealt with quicker, requiring less time and resources to be spent in settling claims and ultimately improving profitability.

The future of data enrichment
In today’s technologically driven society, new ways of exploiting data to gain competitive advantage and new data sources will always be found. Insurers will continue to embrace new data sources and the greater visibility and insight this brings.

Business Insight has a range of products designed to support quote enrichment, risk selection and claims validation as well as the pricing and underwriting of insurance.  We have recently built our own data hub and will be launching the next generation of high resolution property level geographic risk models next year. This will allow users access to more accurate perils information at the point of quote. More details to follow on this in our next newsletter.