London, March 2012 - New data analysis from leading credit data and analytics expert, Equifax, has demonstrated a strong link between claims behaviour and a customer’s credit and identity profile. Financial status and the strength and depth of a customer’s identity credentials can be directly correlated to the risk of making a claim. In response, Equifax has developed Equifax Insurance Connections, designed to assist insurers and insurance brokers rate the risk of future claims, leading to more accurately priced policies and acceptance decisions.
Designed specifically for the insurance sector, Equifax Insurance Connections is an offline database that provides a rich source of consumer data to help insurers improve loss ratios. Key components include electoral roll and CCJ data to verify identity and indicate financial status. Providing a view of the UK population, it features over 900 consumer characteristics at individual and postcode level which are combined and customised to meet individual insurer’s requirements. Fully supported by Equifax’s analytics team, the database can be integrated within an organisation’s own in-house systems, giving insurance companies, brokers and aggregators instant access to powerful intelligence to set premiums whilst reducing the risk of claims fraud.
Central to Equifax Insurance Connections is its ability to help insurers reduce high levels of claims and claims fraud. Analysis of County Court Judgment (CCJ) data, matched to insurance claims data, revealed that individuals who have had a CCJ in the last year are at least 10% more likely to make an insurance claim than those who have not. Equifax analysis also identified that a lower credit risk score and a shorter length of residency were other indicators of a propensity to claim.
Accessing this data will enable insurers to identify higher risk customers, including their likelihood to claim and their suitability for credit terms for premium payments, as Anne Morley, Head of Insurance Products at Equifax explains:
“Our analysis has shown that individuals with a lower Equifax credit risk score are 17% more likely to claim than those with a higher score. Combined with our analysis that shows the propensity to claim of individuals with CCJs, this means we can give insurers valuable intelligence that can be hosted within their own systems to drive profitable premium pricing and risk management.”
The Equifax analysis also revealed that length of residency was another important indicator of likelihood to claim. Stability at an address was shown to be a key factor in claims experience with individuals confirmed as living at their current address for up to 4 years, 20% more likely to make a claim than those living at their current address for 15 years or more.
“Equifax Insurance Connections provides insurers, brokers and aggregators with instant access to comprehensive background data on applicants, enabling more informed policy decisions” added Anne Morley. “And as the data is held inhouse, it removes the commercial and response time obstacles associated with processing large volumes of consumer data.
“With the need to be competitive, combined with pressure on margins, it is vital that insurers can make the most informed decisions in the most streamlined and efficient manner. Equifax Insurance Connections delivers that solution.”
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Equifax is a global leader in consumer and commercial information solutions, providing businesses of all sizes and consumers with information they can trust. We organize and assimilate data on more than 500 million consumers and 81 million businesses worldwide, and use advanced analytics and proprietary technology to create and deliver customized insights that enrich both the performance of businesses and the lives of consumers.
Headquartered in Atlanta, Equifax operates or has investments in 17 countries and is a member of Standard & Poor’s (S&P) 500® Index. Its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. For more information, please visit www.equifax.com.
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