TransUnion has launched Rating Verification Platform (RVP), a service that helps automobile insurance carriers verify the identity and accuracy of an applicant’s information before a policy is bound. Insurers subsequently retain premium revenues that often are lost through policyholder misrepresentation and fraud.
According to a recent report from Quality Planning Corp., insurers could have collected approximately $16.2 billion in additional premium revenues in 2005 if they had used accurate rating information to calculate premiums. In addition, vehicle rating errors or misrepresentation of factors such as rated commute distance, annual mileage, vehicle usage, and rated territory were major contributors to the nearly $1 billion increase over 2004 figures.
By verifying an applicant or policyholder’s identity and information upfront, insurance providers can enhance profitability and reduce the company’s exposure to fraudulent claims, rather than after a claim investigation when an organization is most likely unable to collect lost premiums. It also can increase premium pursuit opportunities, helping to ensure policyholders pay the proper premiums and support compliance efforts.
“Until recently, automobile insurers have found it difficult to identify fraud until it was too late. However, as operations become leaner and underwriting strategies more sophisticated, the epidemic is becoming both quantifiable and manageable,” says Michael Gaughan, vice president, product development and marketing for TransUnion. “Rating Verification Platform allows savvy insurers to implement new strategies to address fraud at the point of quote and subsequently improve revenues.”