Ecosystem Partner Profile: Confianza on Intelligence and Underwriting Auto Lines

 As research for the eBook, 3+ Keys to Proactive Underwriting, Cogitate’s team spent time with John Petricelli, Chief Data Officer of our ecosystem partner Confianza. Integrated with Cogitate’s DigitalEdge Platform, Confianza helps insurers accelerate digital transformation. One of their trending use cases is the identification and prevention of premium leakage and fraud. Confianza’s risk intelligence identifies key policyholder motivations and behaviors as well as scoring/flagging of submissions by risk appetite and selection criteria.

Combining over 50 accurate consent-compliant and non-FCRA data sources with submission data such as driver name, address, and birth date, Confianza’s proprietary risk modeling detects undisclosed drivers, false garaging, likelihood to exaggerate claims, prior vehicle damages, synthetic identities, and more.

At Confianza, John Petricelli has engineered the intelligence that produces a 360 view of your prospects and policyholders with underwriting quality, to make smart decisions for your company and offer your policyholders the best possible coverage. Our conversation is summarized to provide you with an overview of the how, what, and why of Confianza’s risk intelligence and the benefits brought to underwriting auto lines.

How vast is the database?

Confianza has been nicknamed by its clients as “the database of America.” The data includes every adult, every household, and every property in the US. With just a name, address, and date of birth, Confianza identifies all vehicles (VIN), members of the household, and much more. Confianza also maintains data on every business in the US and every commercial property, by type.

How does the risk modeling work?

The power of the data is in the proprietary engineering intelligence that interconnects and gives rise to real insights about people and their assets. For example, a very detailed utility that looks at addresses with 29 different conditions will trigger address exceptions, while some competing providers will not flag the error or omission which could lead to hidden, material risk indicators. Confianza will flag that submission as a failed lookup, signaling a requirement for corrective action.

The data intelligence will confirm the proper identity of the consumer presented, the territory, address, risk exposure, the asset – its current condition, use of the asset, details of the driver(s) presented – and uncover those not disclosed, rate variable integrity for all household drivers and share a motivation field, which indicates financial capability and the likelihood of purchase. The auto details also include full registry ownership, title status, and events. Confianza links this information to the people and households.  It also confirms that the current personal or business use of the vehicle matches the registered use.

All of these factors provide the transparency required to evaluate price risk based on a source of truth that fact-checks possible omissions, unintended errors, and concealment of information that can lead to losses.

The fight against premium leakage

The first step Confianza takes with many clients is to scan their book for premium leakage based on a very conservative model. Most often, discovery finds undisclosed drivers account for a minimum of 15% premium leakage. Non-standard auto can be upwards of 25%. On-going book monitoring is extremely important as Confianza has found at least 15% of policies have a material change before renewal, which may not be captured at renewal if reliant on the policyholder to disclose the change. This illustrates the importance of data validation at renewal as well as submission.

Streamlining the underwriting process

Integration of Confianza with Cogitate DigitalEdge Policy streamlines the underwriting process by providing a digital 360 view by flagging the high conversion leads, eliminating the early no-goes, and reducing the time discussing exception handling with agents from an average of 20 minutes to 2-3 minutes. Insurers can screen submissions against very specific underwriting criteria for early decisions, saving time and investment in additional data.  For example, if the model identifies a submission as a synthetic identity, the process stops before any additional data is called.

For more information on our technology ecosystem, visit our partner page here.

 

Originally published here: https://www.cogitate.us/resources/insurance-underwriting-software-risk-intelligence-ecosystem-auto-insurance/

Ecosystem Partner POV: e2Value on Property Intelligence and Underwriting

 

Skip Coan, SVP of e2Value joined Cogitate to discuss the recent economic trends impacting homeowners and commercial property insurance. Skip addressed the undervaluation of properties due to escalating replacement costs and how e2Value is working hard to educate the industry on rectifying this problem.

Cogitate’s DigitalEdge platform integrates with e2Value to place current, accurate property data at the fingertips of underwriters to easily evaluate property risks and calculate the replacement value of improvements– solving a historic problem for the insurance industry exacerbated by today’s inflationary conditions.

How big is the problem of undervaluation?

“Undervaluation has been a problem for decades – but now with rapidly rising building, labor, and shipping costs, the gap is widening dramatically, leaving an even greater risk of underinsurance. We urge insurers to run evaluations of their books often enough to clearly understand any gaps in coverage to allow property owners to make educated decisions about the level of protection they purchase.

As of April of 2023, we had run tens of millions of policy addresses through our data sets and on average found at least 50% underinsured based on current replacement values. In addition to inflationary impact, additions, alterations, and improvements to homes are unlikely to be reported to insurers. Without third-party data sources to identify material changes, these also contribute to underinsurance.

While the problem is industry-wide, we most often hear about this post-disaster when a state DOI study is conducted. These studies often reflect demand surge which can also exacerbate the problem in the short term. A perfect example is the Marshall fires of Colorado in 2022 where 83% of the damaged homes were found underinsured – ranging from $99,000 to $240,000 per risk.

When a catastrophe hits, if a property is underinsured, even a partial loss can become a total loss because the replacement cost often hits the policy limits.” 

Policyholders do not have readily available replacement cost indicators and are most often reliant on market values (Zillow or real estate assessments) to self-evaluate their coverage needs. This can lead to surprise, disappointment, and financial hardship when the policyholder becomes a claimant.

What type of data is necessary?

“Property intelligence that includes accurate, local material and labor costs, shipping costs, and current building codes are critical to the quoting process to properly price risks at the outset and eliminate this potential value gap from compounding year over year among your best, long-term customers. For commercial properties, access to building codes is particularly important, especially for large, older buildings. Our replacement cost for commercial properties will always reflect a commercially viable space based on local building code because, for example, the code may restrict you from replacing a brick and wood structure with anything other than steel and masonry.

Commercial property occupancy data is also critical to risk evaluation. Nearly 50% of the occupancy information insurers have on commercial properties is inaccurate. Depending on the usage, the risk can increase considerably, and changes go unnoticed unless the insights are available to identify those changes that occur post-underwriting. Finally, geographical details for all property types are essential to exacting distance from natural hazards such as coastal proximity.”

How hard is it to independently source and ingest property data?

“It’s a hard thing to do, even in very large companies. Data is not uniform, so you have to ingest it and convert it into useful insights. Our platform does that by converting public record data into meaningful values 90% of the time with just an address and we do it in less than 2 seconds. For insurers, accessing an ecosystem of providers from a single platform is critical. Underwriters can’t work effectively accessing multiple systems for intelligence gathering.”

Are there other benefits to these insights?

“Our customers have shared that in the current market, the conversations with reinsurers are difficult. When they tell the reinsurers that they work with e2Value, test and run their books often and monitor cost differentials, it helps those conversations considerably. We spend a considerable time with the London markets and they’ve expressed frustration with the US market valuations. They want the right data, the right values, and more importantly, they’re holding the US markets accountable for it.”

Any final advice for insurers?

“Test your book all the time, as often as you can, as effectively as you can. Run your book and run your renewals. Look for outliers and make adjustments. Everyone is afraid they’ll lose business if they raise rates. We’re just advising that you understand your gaps in value and begin to make adjustments before the losses impact your policyholders and your ratios.”

Powered by data-driven and digital automation technologies Cogitate DigitalEdge Policy brings transformational efficiencies to the traditional underwriting process. To learn how Cogitate can help your underwriting team contact us today!

 

Originally published here: https://www.cogitate.us/resources/ecosystem-partner-pov-e2value-on-property-intelligence-and-underwriting/