Indatech Consulting Services ... since 2001

Data-sharing by VIN protects repair facilities, insurers and owners

2011-03-28T20:05:00.000-07:00

(Reproduced from story I wrote for Collision Management Magazine January 2011 Issue)

The vehicle identification number, or VIN, used on all cars and trucks today became a standardized 17-digit number in 1981. The numbers and letters are codes for such things as the make and model, model year, and a final six-digit sequence that identifies the specific vehicle. It’s the vehicle’s “fingerprint,” and when used on repairs and shared between collision facilities, insurance companies, police and the public, it can provide a level of protection for all of them.

Improving the accuracy

Insurance companies recorded VINs on their policies early on, but not with much accuracy or consistency, especially since VIN decoding and verification software wasn’t readily available twenty years ago. But in the mid-1990’s, the insurance industry and Ontario’s Ministry of Transportation began work on the Uninsured Vehicles (UV) Project to verify that vehicles carried mandatory insurance. Starting last fall, the project was phased in to alert vehicle owners of potential VIN issues prior to their license plate renewals. It is expected to expand in future, allowing police to access the insurance database to verify insurance coverage at roadside.

What the UV project initially found was that many companies were entering VINs incorrectly, with some well below 50 percent accuracy. This was usually due to it being manually entered, where characters could be missed or mixed up. The UV initiative accelerated the process of insurers cleaning up their VINs, with a goal of better than 99 per cent accuracy.

CLEAR thinking

The timing coincided with other industry initiatives, including insurers moving to a new, experience-based vehicle rating system called Canadian Loss Experience Automobile Rating, or CLEAR. Using historical insurance data by vehicle model, CLEAR bases each model’s expected costs on such factors as theft rates, repair costs and frequency of injuries. In conjunction with CLEAR, new products were being developed, including decoding software that would ensure VIN accuracy and let insurers know they were properly rating the vehicle.

An accurate VIN lets the industry better verify other information, such as if the vehicle had been previously branded as irreparable, salvage, rebuilt or stolen.

Data Sharing has enormous potential

Data sharing through the VIN has enormous potential for the industry. Collision facility owners can access information that would identify areas of previous damage, which can potentially protect shops – and the car’s owner – when it comes to the vehicle’s structural integrity. Claims fraud can potentially decrease as insurers are able to trace the vehicle’s history, and vehicle buyers can follow a car’s travels through any insurance claims or collision repairs, as well as check the accuracy of its odometer reading and any service records.

Vehicle history reports are now available to car buyers, and collision repair facilities maintaining accurate VIN records of their repairs will help make this information part of the package. This may even help drive consumers to facilities prominently displayed on the report to ensure they maintain their vehicle’s value following a collision. There’s a lot of value in those 17 digits at every step of a vehicle’s life.

Dare to take the plunge!

2011-03-10T09:11:00.000-08:00

Whether you need to deal with new technology, compliance issues, analytics opportunities or overall innovation within your organization, don't be afraid to take the plunge with confidence... but be sure you are properly prepared, and enjoy the ride!

Yes, that's me in the picture.

Due diligence for commercial risks

2011-02-17T19:42:00.000-08:00

Do you wonder if some regulatory rules such as the upcoming Solvency II or requirements such as the OECD’s Financial Action Task Force (FATF) Recommendation 5: Customer due diligence and record-keeping, are something that would impact a Property and Casualty Insurance organization.

Specifically when it comes to verification of beneficiaries before issuing payments (stated as protecting policyholders and beneficiaries), by verifying information such as in ownership, articles of incorporation, business names, bankruptcy, litigation (history and pending), etc. for current or potential risks. Apparently, some financial institutions don’t even ask the policyholder for the information, but rather automatically go to a third party to get that information. This is to avoid any possibility of getting incorrect, outdated or falsified documents.

The OECD requirements outlined FATF Recommendation 5 which affects all insurance and financial institutions globally. There are a lot of requirements regarding Customer Due Diligence (CDD) and about insurance companies’ need to confirm identification of policyholders and beneficiaries. For example, bullet a): “Identifying the customer and verifying that customer’s identity using reliable, independent source documents, data or information”.

I wonder if companies think about this at all, or to what degree, if they do. There are service providers that currently provide much of this information to life insurers and banks, but not very many P&C insurers at this time. Maybe this will change with time.

My take on this is that by acquiring the information for all risks at the underwriting level, you would be able to do an analysis on commercial risks to find a relationship between corporate profiles and loss experience, and then possibly get automatic updates (like credit score updates for consumers) for any changes in a commercial enterprise. The information would also then be available for claims investigations 100% of the time rather than only once in a while.

Food for thought, but drop me a line if you have any thoughts on this.

Roch

rlacroix@indatech.ca

Go beyond R & D

2010-12-27T20:32:00.000-08:00

http://www.indatech.ca/

Webster's defines...

Strategy : An elaborate and systematic plan of action.

Compliance : Conformity in fulfilling official requirements.

Innovation : A new idea, method or device.

Go beyond R&D. Develop a strategy to achieve a competitive advantage maximizing the use of data, information, knowledge and technology. Find the golden nuggets before the competition.

Within a constantly changing environment, deciphering the impact of new rules isn't always easy. Changes can impact all facets of your business - finance, underwriting, pricing, claims, reporting... Make sure you are complying with new rules.

Technology is always changing. With a flood of new technologies, how do you determine what is right for you. Be innovative and proactive, but careful. The wrong decision can set you back instead of forward. Indatech can help you assess what innovations are right for you.

Indatech Consulting Services provides short-term "drop-in" expertise that immediately understands your business and the industry. We bring more than 20 years of diverse industry experience to help your business grow and improve efficiencies.

Roch Lacroix, Principal Consultant

Roch Lacroix is Principal Consultant with Indatech Consulting Services, a position he has held since 2001. His unique industry background provides an important link between business and technology for any insurance organization. With a background in Actuarial Science evolving to Senior Management Sales, Marketing and Consulting positions in the Property and Casualty insurance industry, Roch has become a visionary leader in the use of insurance data and technology to identify new opportunities to improve efficiencies, increase profitability, expand market reach and ensure compliance with changing regulations. An experienced senior manager that can manage overall operations, budgets and staff located across the country and is experienced across all functions of an insurance company including Actuarial, Underwriting, Claims, Finance and Marketing.

Prior to founding Indatech, he spent two years from 1999 to 2001 as Vice President of Sales and Operations for the Canadian division of Mitchell International, a U.S.-based data and technology organization delivering information products and software to the collision repair and insurance industries. Roch had responsibility for sales & marketing, after-sale service, key account relationships and management of the Canadian office, including the company’s annual Canadian sales target and sales and support staff across Canada.

From 1997 to 1999, he was Vice President of Marketing and Client Services for the Insurance Bureau of Canada’s Data Centre where he managed the division, developed strategic plans and reported the status of projects on a regular basis to the Board of Directors, made up primarily of CEOs from Canada’s largest insurance companies. Roch was responsible for developing and maintaining relationships with insurers, vehicle manufacturers, regulators and strategic partners.

As Vice President of the Vehicle Information Centre of Canada from 1994 to 1997, Roch, in addition to performing the organization’s marketing and client services functions, also led all research initiatives, development of applications and rating products. He worked extensively with private and government-run insurers, vehicle manufacturers and insurance regulators towards the successful implementation of rating products.

Roch started his insurance career with the Insurance Bureau of Canada in 1988, following his Actuarial Science studies at the University of Toronto. He developed and delivered pricing and reserving products - from the industry’s largest database - for industry actuaries, underwriters, marketers, brokers and senior executives. He has an in-depth understanding of voluntary and mandatory industry data reporting requirements. His technical and analytical skills include analyzing and interpreting large amounts of data to provide meaningful knowledge-based information and tools, and defining data reporting requirements to address legislative changes.

Roch’s extensive work on the technology front has included leading activities in systems development and project management, including defining system requirements, selection of applications, and monitoring of project costs and timelines.

Roch is an experienced bilingual presenter with public and media relations experience, which includes giving interviews to radio, television and paper media; writing magazine articles, newsletters and brochures; conducting seminars; giving presentations to large industry groups.

Roch can be reached at rlacroix@indatech.ca or (416) 720-1498.