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Real solutions in the new playing field

01 August 2007 FAnews

With the new National Credit Act (NCA) in place, TransUnion is ideally positioned to play a vital role in the new credit environment. FAnews takes a look at this company and its role in the insurance industry.

TransUnion ITC changed its name to TransUnion in 2005 and repositioned itself.
"We have moved away from being the ‘blacklist' company to one that empowers consumers. We have found that the consumer demand for credit reports and direct to consumer products increased by more than 80% in the last year. As a registered credit bureau we are committed to complying with the regulations set by the National Credit Act", says Edward Khoury, CEO of TransUnion Credit Bureau.

Role in the insurance industry

To combat fraud, the insurance industry is collaborating in a data sharing initiative known as the Insurance Data System (IDS), which is managed by TransUnion.The Insurance Data System is a centralised database of claims and policy information to help participants achieve a single, integrated view of policyholders, their previous performance and their assets. Currently the system holds 4,5 million claim records and 1,8 million policies.

The short term insurers, brokers and underwriting managers participate by providing their policy and claim information which is stored on the system. This allows them to enquire on and assess the risk of an individual, risk address and vehicle so that better underwriting decisions can be made as the risk is assessed up front.

Combating fraud

By supplying their claims information, the participants can identify fraudulent claims as the system provides access to claims information across the short term insurance industry. The solution also includes a Claims Fraud Prevention Model which analyses several characteristics of the claims record to predict possible fraudulent activity.

Participating members to the Insurance Data System can also verify the vehicle, drivers' license and ownership of a vehicle by enquiring on the NaTIS and TransUnion Auto Information Solutions System.

Risk reduction for brokers

TransUnion has developed both generic and customer build scorecards to predict the loss ratio and potential lapse rate of a potential customer.

Initially these models were only available to direct insurers. Now, TransUnion has a new cutting edge, online delivery mechanism that makes it possible for insurers to incorporate their credit data based rating processes into the quoting system held by their brokers in one single, seamless, consistent decision within seconds. Brokers will receive a consistent quoted premium at a rate that not only suits the customer's risk profile, but is also competitive.

Brokers will enjoy cutting-edge technology with minimal upfront costs, be able to increase revenues and profits with tried and tested solutions, offer customers the best terms and increase efficiencies to maintain the competitive edge.

Industry wide solutions

The company's activities are not limited to the short-term market. "We are very excited to have been, together with business partner Astute, awarded the opportunity to develop a Life and Claims Register for the life insurance industry. We also manage, in conjunction with the Board of Healthcare Funders, the Medical Schemes Forensic Database which is a central repository of pooled information to help medical schemes and administrators proactively identify and manage fraud.

"Our systems enable collaborative data pooling across industries with the Death Claims Register with Home Affairs verification on a policyholder's death. TransUnion is currently also driving, with Business Against Crime, the implementation of the Equipment Identity Register, on behalf of the cellular industry, into the rest of Africa."

Going forward, the Insurance Data System provides the platform for TransUnion to provide a solution to assist banks in managing and monitoring the insurance of the vehicles that they finance. This would not be possible without the support of the Insurance Data System participants.

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