£1.42bn: SSP uncovers the cost of ‘lost premium’ fraud to the UK intermediary motor insurance industry

New data from SSP reveals that motor insurance fraud in the broker channel costs the industry a potential £1.42 billion in lost premiums due to customers deliberately manipulating their risk data when looking for a quote. This misrepresentation reduces the premium paid by a whopping 46% on average, with customers typically saving themselves almost £295 each by manipulating personal information such as their occupation, where they keep their car overnight, or the number of motoring convictions they have. 

This is the first time that the amount lost in premiums has been accurately measured and reveals the extent to which fraud is damaging the insurance industry – with knock-on costs for customers as well. In addition to the lost premium, SSP estimates that the exposure to claims cost in respect of those customers who are misrepresenting at application stage could be as much as £1.36bn, with those that lie at application stage considered across the industry as more likely to make a claim.

With over 1.3 million potential cases of application fraud in the broker channel in 2013 according to SSP’s data, it is clear that insurance fraud has risen sharply, highlighting the need for improved detection. Another recent study showed that insurance fraud has risen sharply since the onset of recession and by 77%1between Q4 2012 and Q4 2013 alone.

SSP handles over 3 million quote requests a day across the industry, giving it unique and unrivalled visibility of the market and consumer behaviours through its industry leading ‘SSP Hub’ solution, and has identified that 35% of converted policies typically contain one or more application fraud indicators. The problem is worst in around 5% of converted policies, which have the most significant number of potentially serious inaccuracies and contribute disproportionately more to overall losses in premiums.

Altering basic details on insurance applications can result in dramatic differences in premium costs.

SSP is today launching its new Intelligent Quotes Hub (IQH), a next generation centralised dynamic risk rating, pricing and data platform that offers improved pricing precision, unrivalled rating capabilities, allows time to market to be drastically reduced through insurer self-service and enables innovative uses of novel data as well as incorporating the most effective pre-inception counter-fraud solution on the market. SSP’s counter-fraud solution within IQH deals with complexities such as slight changes in names and addresses in order to accurately link data to create a holistic ‘single customer view’ allowing customer activities and behaviour across the whole market to be captured and monitored in real-time.

SSP’s counter-fraud solution is highly flexible and can be configured to express an individual insurer’s tolerance to application fraud. With IQH and its embedded counter-fraud capability integrated with SSP’s ecommerce and mainstream broking platforms as well the SSP Select Insurance platform, SSP has a rating and fraud detection solution suite covering every stage of the business process, from consumer through to underwriting, policy and claims management.

The SSP counter-fraud solution also has the capability to aid in the identification of potential ‘ghost broking’ activity by analysing and alerting activity generated from specific computing devices.

The unrivalled power and insight provided by the SSP counter-fraud solution creates the opportunity for significant value to be realised by both insurers and brokers. By being able to home in on the ‘worst of the worst’ customers, who are paying substantially inaccurate premiums as well as presenting a heightened claim exposure, there is an opportunity to materially improve insurer underwriting results and of course this improvement will be equally reflected positively in broker agency performance.

Adrian Coupland, the Head of Data Strategy at SSP said:
“The cost of fraud at claims stage has long been recognised but until now, lost premiums have been hard to pin down. Failures to declare motoring convictions, the usage of a vehicle for business purposes or a misrepresentation of where a car is kept overnight are regularly not picked up until a claim is made, if at all. This means that a significant number of insurance premiums are priced incorrectly creating huge losses to the industry.

“In addition, research has shown that consumers who lie on their insurance application are 66% more likely to make a claim2 on their insurance so the true cost of application fraud goes well beyond the initial loss of premium.”

SSP launches white paper to help insurers plan for digital success

SSP, a leading global provider of insurance technology, has launched its latest whitepaper, ‘Digitising the customer journey’, which identifies how insurers can harness the power of technology to drive better digital customer service.

With the explosion in the number of digital devices and channels favoured by consumers, the white paper examines the increased opportunities but also the challenges facing insurers in an increasingly competitive market.  For example, Cisco predicts that globally, the number of internet-connected devices is expected to reach 50 billion by 2020. Meanwhile, recent research from Eptica has highlighted that insurers are lagging behind other sectors such as fashion retailers, answering only 57% of customer queries online versus 79%.

SSP’s white paper identifies four critical elements of the digital customer journey which insurers should consider when adopting new technologies.

The four key areas are:

1. Enhanced digital user experiences — Increasing use of mobile devices will lead to customers expecting high levels of customer service anytime, everywhere. Insurers need to consider the value of offering mobile-friendly customer service applications for self-service.

2. Constant social connection — By 2015, Gartner predicts that 75% of consumers will tell friends about good or bad experiences using social media. Already, over 80% of UK consumers are using social media as part of their online research before purchasing non-life policies. Insurance businesses must therefore consider adding social channels to their customer service initiatives, both to monitor positive and negative sentiment and to be able to respond via the same channel that customers are choosing to use.

3. Ever-growing volumes of data — The ever-expanding volumes of customer and market data available open up huge opportunities for insurers to analyse and apply greater intelligence to decision making across the business. From customer acquisition and retention to fraud prevention and reduction, the automation of decision-making to drive business growth and improve customer relationships offers opportunities for new product development and market differentiation.

4. Speed, choice, privacy and security — Regulation and compliance needs around data privacy, security, freedom of choice and fairness will continue to underpin the decisions and processes within insurance businesses, and must be at the forefront of any change in process or business model.

Adrian Coupland, Head of Data Strategy for SSP said:
“The pace of change over recent years has been frenetic and digitalisation is now about much more than simply adding new sales channels or self-service capabilities.  Becoming digital is about fundamentally changing the way business is done whether that means better supporting end-to-end digital transactions for better operational efficiencies or ensuring the seamless experience that 21st century customers expect.”

“A complete business model re-design is a daunting prospect but anyone planning to upgrade their technologies should start by reviewing their entire business processes.  Only by mapping these out and deciding what you want the customer’s journey to look like can you establish which elements have the potential to drive the most value in the shortest possible timescales.”

Swinton extends relationship with SSP

Britain’s largest high street insurance retailer, Swinton, has extended its contract with SSP, a leading global provider of insurance technology. Swinton is upgrading to SSP Select Broker to support their ambitious business plans and move to a true multi-channel organisation. The deployment of Select Broker is building on the successful deployment last year of the SSP Quote Hub. The multi-channel capability will enhance Swinton’s ability to seamlessly handle all contact centre calls, online transactions and branch business providing: policy administration, documentation EDI and product reporting for UK customers.

The deal will see the current partnership between SSP and Swinton extended. The SSP Broker system will sit alongside Swinton’s existing centralised SSP Quote Hub and other new technology deployments, which have been successfully implemented over the past year.   Together, these will create one seamless system that centralises all customer information and data, making it easier for Swinton to provide swift and efficient customer service and meet market changes quickly.

Customers will also have the convenience and flexibility of being able to interact with Swinton across multiple channels, including online, on mobile devices, through a call centre or at one of its branches.

Steve Pearson, Managing Director, Broker Division at SSP said, “The relationship between Swinton and SSP has been a long and happy one, dating back more than three decades. We’re delighted to continue this partnership and to support Swinton in elevating its digital position in the market.

“Increasingly, consumers expect to be able to interact with their broker and insurance provider in multiple ways – for example, they may search for quotes on a smartphone, process their purchase in a branch and make enquiries through a call centre. Upgrading to SSP Select Broker gives Swinton the added power to provide this experience rapidly and seamlessly.”

Ian Chapple, Chief Information Officer at Swinton Insurance said, “SSP Quote Hub has proven its value as a key element of our long term strategy to improve efficiencies, provide our customers with a high quality service and prepare for the expansion of big data across the industry. It has allowed us to gain instant access to an expanding range of data enrichment facilities, lowering risk while reducing response times on all quotations in branches and online.

“With this in mind, we feel confident that the next phase of activity will give us a further edge by delivering a truly multi -channel experience for our customers and staff.”

Wunelli supports SSP’s telematics push into Australia and New Zealand

Wunelli, a LexisNexis company, is helping insurers, brokers and motoring organisations in Australia and New Zealand to take their first steps into the usage-based insurance arena. New smartphone app solutions being developed by Wunelli build on its long-standing and successful relationship with SSP in the UK, enabling the insurance technology specialist to offer telematics capabilities to insurance businesses operating in the antipodes.

Forming part of a wider package of IT solutions to speed insurers’ entry into the telematics market, SSP will be offering Wunelli’s mobile platform and scoring capabilities for the development of smartphone telematics apps. Wunelli’s mobile platform identifies driving DNA – the nuances of driving behaviour with acceleration, braking, origins, and destinations ensuring the driving data fed from smartphone apps is 95% accurate. If Wunelli’s mobile platform doesn’t recognise the driving style created from the initial ‘DNA’ driver then the trip isn’t used for scoring purposes. Australian and New Zealand insurers will not only have the score but a quality marking from Wunelli based on recognised driving behaviour.

Penny Searles, Managing Director, Wunelli says:
“These markets have the benefit of seeing what has worked well in the UK. We have spent a number of years perfecting the app technology and alongside the advanced operating systems now available, we are able to address issues such as battery drain, and the ability to download a new app if the original phone is lost or stolen.”

Adrian Coupland, Head of Data Services Strategy, SSP adds:
“The agreement with Wunelli allows us to offer insurers entry into the usage based insurance arena at a fraction of the cost of hard-wired devices. The smartphone apps will allow insurers to go out to the mass market and collect vast amounts of data to understand how it can be used effectively for rating purposes and claims. This is part of a long-standing relationship we have with Wunelli, combining our complementary skills to bring insurers best of breed solutions.”

SoteriaDrive evolves with Sabre pilot of telematics solution

Insurance technology specialist SSP today announces that Sabre has begun a pilot for the SoteriaDrive telematics solution. Developed by SSP in conjunction with Wunelli, SoteriaDrive is the first whole of market telematics-based insurance product to be available via high street brokers.

SoteriaDrive, an app-led solution that also supports black boxes, opens up telematics to a potential market of over 1,000 SSP brokers who account for a large slice of all UK private car transactions in the broker market, enabling them to capitalise on the growing demand for behavioural-based insurance.

In a ringing endorsement for the solution, Sabre will shortly be joined by Covéa Insurance and three other insurers committed to join the pilot. The solution has already gained acceptance within the broking community, with A-Plan going to pilot earlier this month.

“These are exciting times for the insurance industry, with telematics-based policies set to become mainstream in the coming years,” said Adrian Coupland, Head of Data Strategy at SSP.

“For too long, local independent brokers, who are at the heart of the insurance industry, have been left out of the telematics-based private motor insurance revolution. With SoteriaDrive, SSP is redressing this, firmly establishing its position as leaders in the telematics field. This has been recognised by prestigious firms such as Sabre, Covéa Insurance and A-Plan, which have a deep knowledge and experience of the motor market, choosing to work with us.”

Advanced functionality, such as the auto-start feature, makes SoteriaDrive an attractive proposition for brokers and customers alike. By detecting when the vehicle is moving and automatically activating the SoteriaDrive app, the onus on policyholders to remember to start the app every time they begin a journey is removed.

Patrick Swords, Underwriting Director at Sabre, said:
“SoteriaDrive is a unique proposition, the result of a best-of-breed partnership between two companies we have longstanding relationships with – SSP and Wunelli. As Sabre is committed to opening up the growing telematics market to our brokers, we are delighted to be at the forefront of such an innovative development.”

Third charity golf event on course to help injured servicemen

Skipton Golf Club was home to our third annual charity golf day, in aid of the On Course Foundation, on Monday 9 June. The event was organised by David Rasche in conjunction with the Halifax-based insurance software provider he founded, SSP. Although it rained for the first nine holes, the skies cleared and the Craven scenery could be seen in all its glory for the remainder of another fantastic day and evening of fundraising for the charity.

The On Course Foundation is a charity that helps severely injured servicemen and women recover through golf, as well as helping them find employment in the golfing industry and other supporting businesses. Set up four years ago by John Simpson, a former Senior Vice President of the sports management business, IMG, it is privileged to have The Duke of York as its UK Patron, and Arnold Palmer as Patron in the US.

“Golf, through the handicap system, is probably the only sport where disabled people can compete on even terms with able-bodied competitors,” said David Rasche.

“The service personnel find it a very positive force for both their mental and physical rehabilitation. Previously very fit individuals gain a new challenge, purpose, passion and social engagement through the charity which helps them rebuild their lives.”

SSP first became involved with the charity a few years ago, when David Rasche met John Simpson through golfing friends. As David’s eldest son is a senior Army Officer with experience of double tours of both Iraq and Afghanistan, he felt compelled to get involved. After supporting the charity for the past few years on SSP golf days, three years ago he decided it was time to take it a step further and organise a golf day at his home club.

Inviting business contacts from the insurance industry, the professions and local businesses, David was able to encourage 22 teams to get involved, with many insurance businesses including Beckett Insurance, Henderson Insurance, Ageas, Direct Group, RVM, Markerstudy and Premium Credit taking part. SSP and David’s other businesses, GB Group and Onyx Group, also entered teams and donated prizes.

Each team entered with three players and were then partnered with an injured serviceman to take part in the 18 hole Stapleford competition. Playing a shotgun start, all teams were off at 12.30 and after the initial rain, were lucky enough to enjoy the fabulous views in the Northern sunshine.

The scoring was excellent considering the early heavy rain and the winning three teams had insurance connections. Third place was claimed by the team from Beckett Insurance, with Sam Stoddart, ex-Kings Royal Hussars, Bob Beckett, Ilkley man, John Hanline and David’s son-in-law Paul Connolly. Second was the SSP team including David’s son Mark Rasche – a late replacement, Jonathan Davey, Richard Crocker and ex-RAF man Gez Almond.

Winners with a fabulous 99 points were the Deloitte Leeds team of Ilkley member Simon Wormald, Will Johnson, Matt Henderson and ex-Kings Royal Hussar, Richard Webb.

“Following an excellent dinner, the generosity of the guests at the auction was fantastic,” said David Rasche.

“We raised £13,000 through lots including a South African golf holiday, golf at two top Scottish courses and sporting memorabilia. Together with entry fees, donations and money collected for prizes at two par threes on the day, the grand total of money raised should be around £27,000.”

One event typifies the fortitude of the On Course members: Jason Evans, ex-REME, sadly slipped on the wet ground, twisting his prosthetic leg so badly it actually broke part of his leg around the stump. Undeterred by an ambulance trip to Airedale, he returned in amazingly good humour in time for the dinner with his team. He expected to be operated on at a hospital near home on the following day.

The charity is extremely grateful to Skipton Golf Club, everyone who took part and all the businesses and individuals who have supported the Skipton event in any way.

Bumper year for SSP topped off by Celent praise

SSP, a leading global provider of general insurance technology solutions, has had a bumper 12 months, signing up eight new clients and receiving significant praise in the recently published Celent reports on policy administration systems.

The reports rated SSP’s core insurance products (SSP Pure and SSP Select Insurance) in terms of technology and functionality, stating that: “Any insurer with a complex modernisation requirement would do well to consider SSP Select Insurance.”

SSP has invested heavily in developing its innovative SSP Select Insurance product to support the need for insurers to become more agile through digitalisation of their operations, improving customer experience and realising efficiencies. This has been recognised by insurers selecting SSP solutions and the Celent rankings.

SSP Pure Insurance’s technology ranking reflected its status as a more mature platform. The stability associated with this makes it a very popular product with SSP’s customers, as does the amount of functionality provided. This functionality was recognised by Celent, which described the product as “modern” and said that the continued investment from SSP was evident in the feedback and technology modernisation. In addition, with clients across Africa, Asia-Pacific and in Europe, SSP Pure Insurance is “clearly flexible and suited to multiple markets”.

The growth in SSP’s customer base and positive Celent rankings reflect the organisation’s commitment to continuously enhance its solutions and provide insurers with the tools they need to enable future growth and innovation.

Stephen Lathrope, Managing Director of SSP’s Insurer Division, said:
“These rankings reflect our commitment to continuously enhance our solutions to provide insurers with the tolls and solutions they need to enable future growth and innovation. With Celent also ranking SSP against its peers in terms of the service provided, based on customer interviews, the positive feedback provided demonstrates the confidence insurers have in the solutions we provide.”

These new business wins for SSP Insurer Division are in addition to new client contracts and customer upgrades in both SSP’s Broker Division and Financial Services Division.

Legal & General chooses SSP to support digital strategy

SSP today announced that Legal & General has chosen to implement SSP Select Connect in its general insurance business to help drive further improvements in efficiency and customer service.

Following a successful proof of concept, Legal & General will integrate SSP Select Connect with its existing Insure/90 policy administration system, enabling it to extend its capabilities and streamline business processes.

Legal & General chose SSP after a rigorous selection process that highlighted the capabilities of the SSP Select Connect software, as well as the knowledge and experience of the SSP team.

Rob Regan, COO of Legal & General’s general insurance business, said:
“Not only did the proof of concept prove that SSP Select Connect was the right technology, it also proved SSP had the right team in place to deliver a solution that will allow us to achieve our business objectives. During the process it was clear that SSP’s experience across the industry and their detailed operational-level knowledge of Insure/90 would help increase the pace of our innovation.

“To continue to improve the experience we deliver to our customers and to offer quality, value-for-money products across all our channels, we need to ensure we have the right technology and relationships in place. Throughout the entire process, the SSP team worked closely with our business and IT teams to ensure all our critical success factors were met. I look forward to working with SSP over the coming months to further develop our capabilities.”

Kevin Gaut, Chief Technology Officer of SSP’s insurer division, said:
“With mobile adoption and consumer expectations rising and the ease of comparison creating an unprecedented level of price transparency, delivering excellent customer service and driving down costs are key priorities for insurers. To achieve this, insurers need to continue to invest to enhance and

modernise their core systems to ensure they have the flexibility they need to respond to market demands faster than ever before.

“We are delighted to be working with Legal & General on this project and supporting its future development. Implementing SSP Select Connect will help Legal & General meet its customers’ changing needs via a range of distribution channels, while minimising disruption and risk, improving operational efficiency and controlling costs.”

A component of the SSP Select Insurance suite, SSP Select Connect is a development toolkit specifically designed to enable insurers to deliver on-demand customer self-service via the internet, improve processes and provide a seamless upgrade path to a new platform.

Unlike other web service products, SSP Select Connect has been built from the ground up by SSP’s Insure/90 experts. It is the only tool that provides a library of Insure/90 specific customisable service templates for a wide range of business processes and inquiries including quotation, quote conversion, new business, cancellation, renewal and many more, allowing rapid delivery of lower maintenance web services.