Tackling fraud as it happens
The UK personal lines sector is the most automated in the world. Dominated by price comparison websites, the marketplace is one where consumers primarily research and buy auto and home insurance online. Administration costs have plummeted as consumer demands for self-service have superseded the personal approach of face-to-face and telebroking.
But the apparent anonymity of the channel has come at a price: $1.8 billion in detected fraud and an estimated $2.9 billion in undetected fraud. Or put another way, an annual cost of $70 per household. Moreover, all the evidence suggests that the cost of fraud to the industry is escalating year on year rather than declining. CDL's response has been to look to new technologies that offer a radical departure from the past and a powerful means of tackling the problem at source.
Hummingbird has provided a solution with the ability to ingest and search enormous volumes of data in milliseconds, making it invaluable in the fight against fraud. Equally significantly, it provides a powerful tool for enrichment, customer profiling and real-time pricing strategies.
In 2018, CDL launched a revolutionary new anti-fraud syndicate, using Hummingbird to enable a number of major insurance brands to join forces to combat the growing challenge of quote manipulation and identify potentially suspicious patterns of consumer behaviour.
A number of CDL's customers are signed up to the new syndicate, including Bedford Insurance and Business Insurance Solutions.
Syndicate members can specify actions to be taken in the event that Hummingbird detects potentially suspicious behaviour, including redirecting customers to a contact centre, flagging quotes for post-sale validation, adjusting the premium or declining to quote altogether.
CDL's partnerships director, Nick Jackson, adds: "A significant proportion of consumers believe that manipulating their details is an acceptable way to reduce premiums, and speaking with our customers, it was clear this was an issue they needed us to help them tackle. It's been great to see syndicate members come together to share insight and overcome what is a growing problem for the industry and also for consumers, who risk invalidating policies by providing false information."