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Back to the Data: The Future of Actionable Underwriting

Lisa Volmar
Blog Post10/21/2015

Adapting to the future of homeowners insurance starts with data. The speed at which data and analytic tools are becoming available within the personal property insurance market is faster than ever, making it easier to improve underwriting performance and risk management while mitigating fraud.


According to the Coalition Against Insurance Fraud, fraudulent claims cost approximately $80 billion a year. Insurers estimate that up to 20% of claims are fraudulent, some of which are never detected. This presents an opportunity to fight fraud with data and analytics by confirming information during underwriting, and monitoring for changes during renewal and claims processing.

Some solutions primarily leverage current or prior policy data. However, if rate evasion was practiced on a current policy, it perpetuates to the next policy. With so much at stake, actionable underwriting steps are needed to accurately identify policies with the highest potential for claims. Beyond the initial underwriting process, carriers must monitor their portfolios and address changes in risk as well.

Recent trends show an increase in claims occurring for unidentified and unverified properties. On an annual basis, about 3-4% of a property portfolio will have a non-weather claim that will account for approximately 50% of the insurer’s total paid losses.

Changes in underlying risk that increase the insurer’s exposure to unanticipated losses or increase the potential for large losses could have a significant impact on underwriting performance. In fact, insurers spend millions of dollars each year inspecting properties to identify potential changes in risk to mitigate unknown exposures.

Known data points wrapped in a comprehensive decisioning solution can now detect fraud and validate rating and eligibility factors more quickly and efficiently. Critical data points like:

  • Property information about ownership and use
  • Identity verification of the policyholders
  • Occupancy status of the property
  • Mortgage confirmation with insights to foreclosure or delinquency

These insights are predictive, timely, easily digestible and usable in an insurance carrier’s existing process to shed light on possible risk and the potential for large unanticipated losses.

Responding to new market demands with verification tools and predictive insights can contribute to an enhanced consumer experience and better-informed decisions, while limiting risk.

In order to optimize the consumer experience while providing accurate rates, carriers must have a comprehensive, configurable solution to detect fraud and validate rating and eligibility factors. Our property risk verification platform solution does this while also including sophisticated subject selection with the necessary algorithms and match logic for identity, property, occupancy and mortgage.

For more on mitigating fraud at the point of sale, read our insight guide Predictive Power.

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