Evolving customer onboarding in insurance through email intelligence

By James Burton, senior director, product management, Insurance, U.K. and Ireland, LexisNexis Risk Solutions, Insurance

The use of stolen or fake identities to procure insurance – either to sell fake motor insurance policies as a ghost broker or to pursue staged claims has heightened because of the pandemic. In June 2021, Aviva confirmed that the number of cases of application fraud and ghost broking it had detected had grown over a third in 2020[i]. In addition, the Insurance Fraud Bureau[ii] confirmed in November 2021, that over 21,000 fraudulent motor insurance policies were reported to it by insurers in the past 12 months which could be linked to ghost broking scams.

It is clear that the tools to spot ghost broking activity prior to policy inception have needed to evolve. However, the challenge insurance providers have faced is finding a way to conduct robust identity (ID) validation checks at the point of quote to uncover suspicious activity, without causing friction or impacting a streamlined quote experience for the vast majority of honest customers.

Email address intelligence and shared fraud data direct into insurance workflows at the point of quote is now helping to solve this challenge. Crucially this new data solution is accessed through a single point of entry to a wide range of insurance-specific data from one platform, enabling insurance providers to understand the risk of fraud in real-time.

ID validation checks to help confirm the applicant is who they say they are, accessing industry databases of known fraudsters have become integral to a swift risk assessment process at the point of quote. Insurance providers can also access quote behaviour data through the same platform to build a further understanding of potentially fraudulent activity. This can be particularly valuable for identifying changes to named drivers, during the quote process and whether a link can be made with the main proposer.

The next big step forward in identity validation uses a piece of information provided as standard during the application process – the applicant’s stated email address.

Our email address tends to be unique to each of us and will usually stay with a person over time. This makes an email address a unique and consistent global identifier that is, in most cases, linked to multiple online accounts and transactions creating digital footprints. It could in fact become one of the most powerful tools for detecting application fraud.

Now, powerful fraud solutions already working to tackle identity fraud in the banking sector, are being extended to the insurance sector. Based on the email address and other personal information provided during the application or claims process, this solution can provide an instant risk score[iii] at the point of quote, based on billions of transactions from global payment processors and other online industries, including over 82,000 fraud events shared on average daily[iv].

The score indicates whether the identity is genuine or whether it could be fraudulent by evaluating email address metadata points, such as whether the email and domain even exist, or whether the email bears a close resemblance to the proposer’s name for the policy. As well as automatically validating quotes, the score can also inform pricing, underwriting and claims decisions alongside the use of other datasets.

The rise in ghost broking has heightened the demand for data and technology to deliver swift ID validation and flags for fraud risk, without creating friction for genuine customers. Identity verification processes in the insurance market must continue to evolve to help the market keep pace with the ever-changing tactics of fraudsters.