Verisk Insurance Solutions - Underwriting, a unit of Verisk Analytics, announces the launch of RISK:check POS (Point of Sale), a new underwriting model for personal lines automobile insurers that identifies applications with a high likelihood of future claims fraud and finds rating errors that result in premium leakage.
Perpetrators of fraud are becoming more sophisticated, and the challenge to control fraud and rating error has never been more complicated. Identifying fraud before the policy is issued as part of the underwriting process has never been more critical.
The National Insurance Crime Bureau (NICB) has cited industry statistics that estimate up to 10 percent or more of insurance claims involve fraud. Furthermore, Verisk Underwriting has estimated that due to incorrect addresses, drivers not listed on policies, and other factors, premium leakage can represent 10 percent of unrealized premium.
"Despite these underwriting challenges, carriers want to make it easy for customers to get a quote and buy a policy," says Neil Spector, president of Verisk Underwriting. "Carriers that offer a superior customer experience, control expenses, and use technology at the point of sale to manage the small percentage of risks related to fraud and premium errors will enjoy a sustainable competitive advantage in the market."
"The RISK:check POS model was developed through millions of carrier-provided policy and claims records," said Spector. "It has been further vetted and validated with more than 10 million new business policies in dozens of retrospective actuarial studies on behalf of regional and national writers. The model has been demonstrated to improve first year loss ratios between three and six points."
RISK:check POS can be incorporated into a fully automated underwriting process and is compatible with all personal auto distribution channels, including agency, call center, and Internet. It is available as a standalone solution or can be integrated into QuickFill, Verisk's data prefill solution. RISK:check POS is part of the broader Verisk Underwriting RISK:check solution that identifies premium leakage and potential fraud for policies currently in a portfolio.
The technology underlying and powering RISK:check POS is provided via a strategic alliance between Verisk Underwriting and Inovatus, LLC.
“The Inovatus point-of-sale model is the most advanced and predictive non-FCRA fraud risk model available to the personal auto market today. It's a powerful new addition to the Verisk Underwriting data assets and underwriting solution suites serving the auto insurance market," says Spector.