Freedom Brokers

CDL

Freedom Brokers launched in 2017 as a new personal lines provider, committed to making insurance as effortless as possible, and giving customers more time to get on with the important things in life. Its brand is fiercely independent with a focus on adopting new ideas and doing things differently.

Harnessing the latest technology is therefore a key part of its business model and it turned to CDL as a strategic partner to support it to address the growing industry challenge of application fraud and its impact in terms of post-sale cancellations and bad debt affecting the bottom line.

In particular, it wished to address 'quote manipulation', a growing challenge whereby consumers generate multiple insurance quotations, often through different channels, with key risk details, such as occupation, 'tweaked' between quote requests in an effort to obtain a lower insurance premium. Freedom sought a solution that would enable it to identify, pre-sale, when this is taking place.

To address this problem, CDL launched a game-changing anti-fraud syndicate, bringing together a number of major insurance brands to collaboratively harness technology to combat quote manipulation. By pooling quotation data, members benefit from a market-wide view of consumer activity and by sharing supporting infrastructure, they gain significant economies of scale.

Hummingbird Syndicate enables users to identify and respond to suspicious patterns of behaviour in real time. Cloud-hosted using Amazon Web Services (AWS), it is highly resilient and scalable, and its ability to analyse the huge volumes of data associated with hundreds of thousands of daily quote requests and deliver insights to inform immediate action makes it invaluable in the fight against fraud.

Boasting an average response time of under 100 milliseconds, including external API calls, and 99.99999% availability, it is a 'faster than fast' solution, analysing quote requests across all channels to deliver insight and inform actions prior to the point of a policy sale.

With Differentiated Software Partner status in the Amazon Web Services (AWS) Partner Network (APN), CDL has a strong track record in deploying Hummingbird on AWS.

AWS global deployment options are leveraged to ensure resilience and data security. These include Multiple Availability Zones and the Amazon Elastic Container Service (ECS) to enable applications to be run in a managed cluster of Amazon instances, as well as Amazon S3 object storage to give access to the same highly scalable, reliable and fast data storage infrastructure that Amazon uses to run its own global network of web sites.

AWS PrivateLink is used to securely connect a customer from Virtual Private Cloud (VPC) to Hummingbird VPC endpoint services.

Its ultra-fast performance enables sophisticated matching routines, allowing Syndicate members to detect when consumers have altered personal details across quotes and prevent fraudulent applications. Due to the granular level of the data analysed, Hummingbird also significantly reduces false positives, separating genuine quote consumer alterations from suspicious behaviour patterns.

User-driven business rules determine actions taken when suspicious behaviour is detected, including flagging cases for post-sale validation or declining to quote altogether, and Hummingbird integrates real-time look-ups to external data sources and machine learning to derive greater insight.

In the first 30 days after launch, Hummingbird Syndicate insights showed three million consumers obtained over 15 million quotes. This data highlighted that people routinely made changes to a variety of risk factors between quote requests, with 27% of people varying their annual mileage, 23% their occupation and 16% their NCB (No Claims Bonus) details. Over 20,000 people made NCB changes involving a variance of nine years. Analysis of this data revealed invaluable industry insights, including people most likely to prove fraudulent (those making multiple detail changes across four risk areas).

Freedom Brokers reported the following business impacts from Syndicate membership:

• A reduction in chase communications of 40% due to more efficient processes for policy validation
• Reduction in post-sale cost to service of 50%
• A 7% reduction in cancellations by declining to quote people engaging in significant quote manipulation

"The key benefit so far has been the significant reduction in cost-to-service. Also, declining to quote people engaging in quote manipulation, who are more likely to subsequently cancel as a result of failing to submit required documents, has already had a positive impact on cancellation rates.

"The information provided by Hummingbird Syndicate has allowed us to create sophisticated management information dashboards to help visualise the type and extent of changes people are making to key risk factors when shopping around for insurance. These have added real value to insurer presentations.

"Ultimately, solutions that potentially reduce insurance fraud and associated cancellation rates mean genuine consumers receive better service and prices, and aren't disadvantaged because of the actions of a small proportion of individuals."

Ray Westwick, Group COO at Freedom Services Group

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• Vehicle Information Services