Motor insurance firm Markerstudy Group has gained greater insight into customer data through the use of a new rating platform from software provider RDT, allowing it update rates in real-time.
Markerstudy, which accounts for around five percent of the UK motor insurance market, typically delivers quotes to brokers, which are then passed on to online insurance aggregators accessed by customers.
Markerstudy would typically provide insurance rates to broker firms which would combine the information with third party data to provide quotes to aggregators. For Markerstudy this meant that it was only able to update its rates at pre-determined intervals to be used by brokers, and was unable to react to market changes itself and raise or lower its quotes.
In order to gain more flexibility, Markerstudy has now implemented RDT’s Rating Hub software to enable the insurer to deliver its quotes directly to aggregators across various different sales channels.
The Rating Hub allows Markerstudy to access data from third party companies such as Experian, CUE and CRB, including information around credit checks and claims history. This is combined with information provided by customers, allowing risk to be determined in real-time by Markerstudy, before providing a quote back to aggregators in under a second. The Rating Hub allows Markerstudy to deliver 200 quotes a second, with the insurer typically delivering up to 400,000 quotes in a day to aggregators.
According to Gary Humphreys, Director Underwriting, Markerstudy Group, by gaining greater control of the flow of data through the Rating Hub the company can now use the information to gather more insight into its business. For example, the company is now able to determine which of its rates are over or under priced.
“With the broker systems we just see what were the most competitive quotes with the cheap price, but it doesn’t give us any information about where we were close, in order to find out how much cheaper we need to be to get that sort of business,” Humphreys said. “The Rating Hub has returned results on the data very quickly, so we are able to identify where we are competitive and where we are not competitive and adjust our pricing accordingly."
By capturing customer data it is also easier to prevent policies being written for fraudulent claims. For example Markerstudy is now able to see if a customer is attempting to manipulate the rating structure in order to lower their insurance payments by changing and adjusting personal information they provide to the insurer. Previously around a fifth of policies being written had to be cancelled, but the Rating Hub will prevent this Humphreys said.
“At the moment around 20 percent of policies that are written get cancelled, but the environment of the Rating Hub means that most of those cases would not even go on in the first place, because we would have already identified that there was a problem. So the cancellation rate as a result of this will be much lower."
He said that Markerstudy will use its SAS DI Studio data warehouse tool in order to gain further insight into data provided through the Rating Hub.
“In order to harness the all of the extra data we are getting from the hundreds of thousands of quotation records a day, we are working on a big data project to see how we can manipulate and analyse the data so we can bring it to bear on our business.”