Grasping the true history of the metal can help tackle motor claims inflation

Tom Lawrie-Fussey
Automotive director, LexisNexis Risk Solutions, 
Insurance, UK and Ireland

Collating so many pieces of the jigsaw for instant claims assessment has been challenging

A big weight is on the shoulders of motor insurance claims professionals right now. As the Financial Conduct Authority (FCA) warns insurance providers that they must not undervalue vehicles when settling claims, there are significant changes happening in the new and used car market that are driving the demand for more detailed knowledge of the vehicle both at quote and claim.

Cars on the UK’s roads are getting older, meanwhile more new cars come with advanced driver assistance systems (ADAS) technology, often customised at VIN-level. At the same time, the way in which private cars are being used and maintained is changing.

For accurate claims assessment, insurance providers need to build an immediate picture of the car, including its mileage, MOT history and valuation, alongside information on the presence and performance of ADAS at a VIN-level—plus driver-centric data.

Traditionally, collating these many pieces of the jigsaw for instant claims assessment has been challenging. However, the motor insurance market is starting to trial a new platform, enabling an instant view of vehicle and driver risk at quote and claim.

This could fundamentally change the speed and accuracy of the FNOL process, delivering a much more streamlined service for customers while creating greater efficiencies for the motor insurance claims team. These combined insights may prove vital for a market struggling with claims inflation.

Knowing more about the metal

Some might argue that the UK car parc is constantly changing, however, the cost of living crisis has certainly increased the state of flux. For example, the typical length of car ownership has hit nine years, meaning the average number of miles clocked up is increasing. Meanwhile, financial pressures are leading car owners to put MOT and servicing on hold.

At the opposite end of the spectrum, newer cars have ADAS equipment, which can make them safer but can also be costly to repair.

Insightful data

To get a true picture of an individual vehicle more insights are becoming available, to enable swift and accurate assessment at claim. At the same time, the insurance provider could confirm a claimant is who they say they are and not linked to fraud by using email address intelligence.

Market-wide claims history data can add to the level of risk understanding at first notification of loss—has this person had a motor or home claim previously? Has this vehicle been subject to an insurance claim? If so, what happened, and how was the vehicle repaired? All these questions can soon be answered by the industry’s first market-wide claims database to offer a cross-search functionality for motor and home claims.

Vehicle data can also be combined with other insights and many UK insurance professionals are already using a unique contributory database, which holds more than 85% of the motor insurance markets policy information, allowing them to understand risk related to the driver/s of a vehicle. This includes everything from cancellations to gaps in cover and no claims discount histories of all drivers on the policy.

In the light of the current economic climate, financial resilience and the need to have the resources, flexibility and agility to ride the economic waves are critical to insurance providers. Claims teams must equip themselves with both the internal and external data sources they need to handle claims as fairly and efficiently as possible, while keeping processing costs to a minimum.

The arrival of vehicle data and the ability to combine it with driver data is timed perfectly. By accessing granular data on the individual car, its history and safety features, alongside the policy history of its driver/s, claims managers will play their part in making faster and more accurate claims decisions. While the customer will always be at the heart of claims decisioning, the flow of timely data through a single platform can help to keep operational costs down and help expedite straightforward claims, thus freeing up the expertise and empathy needed to handle more complex cases.

Image: © Africa images via Canva and LexisNexis Risk Solutions

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