Big data is undoubtedly a step forward in risk intelligence and analytics. But it is the ability to view external sources of data in context that is going to bring particular added value in future, linking and exploiting data for the benefit of insurers.

Only once we bring together myriad data sources and cross-check to provide a single reference point can we start to derive real value. LexID® is derived from SALT (see below) which has been called the “magic ingredient” that runs through many of our database solutions. But here’s a slightly more real world explanation.

Consider that an insurer needs to make sure individual entities or individuals can be resolved to a single data point. That sounds like a simple thing. But can you confidentially or confidently identify individuals across your different databases? If data is really old and addresses haven’t been updated for many years, it’s sometimes very difficult to match a John Smith from 2016 to a record from John Smith 2010. John Smith (or Jane Smith) may have moved addresses three times in that period. Incomplete records can also be caused by customers mis-keying or mis-stating information in their application.

Can you identify addresses correctly? Can you identity households? These elements will all result in better analytics if you can correctly match and align the data points together across all your datasets.

The insurer also needs to link the data sources together. How can you pull it together efficiently and accurately? At LexisNexis the two metrics we look at are called precision and recall: in other words, how precise are the matches, and how much can you bring back?

For an insurer that wants to make sure there’s a good balance between precision and recall, we pull the data sets together for analytics.

One way to understand big data is that of a “data pipe” that requires filtering and plumbing to ensure that the right data is received at the right time. This is an extremely high level view but it is one of the core functions of LexID®: to recall the correct ID data and filter out “dirty” data, to ensure data quality that really relates to the real world.

LexisNexis uses a proprietary linking technology in combination with our own unique identifier, the LexID®, to resolve, match and manage information for 50 million UK consumer identities and 276 million US consumer identities. This patented linking and clustering method is the machine behind many LexisNexis products that leverage authentication, verification and other identity management capabilities.

Contributory databases have been a driving force behind insurance innovation for a variety of markets since the 1980’s. At LexisNexis Risk Solutions we are experts in developing contributory databases, with 14 built in 25 years starting in the US. Now we are developing new opportunities through innovation in the UK with the No Claims Discount database.

LexID® and the NCD Module

From November 2016 LexID® will be a new component going into the NCD Module across the UK motor market. We offer this as a service. Not only do we use it as an integral part of our infrastructure, we’re offering our customers the opportunity to link all their data assets together, which opens up so many opportunities.

Just a few examples: insurers will know if they are quoting a home policy to an existing motor customer. They will know if someone making a claim against them used to be a customer.  They would know that a named driver being added to a policy used to be insured by them, and so on.

Amongst the many insights from the NCD Module that we serve to UK insurers for example, 13% of motorists on average over-state their NCD, generating a focus for investigation or risk-priced pricing adjustment. A similar number under-state their NCD, so we know there is a big role for cross-checking and cleaning data in pricing/underwriting but also in fraud and other areas of insurance.

How do LexID® and LexisNexis linking technology work together?

  • Identification: When we acquire a new record, LexisNexis assigns our own unique identifier, LexID®. LexID® is not derived from personally identifiable information, like a social security number.
  • Connection: Records with intersecting data points are linked together by LexisNexis patented Scalable Automated Linking Technology and are then assigned the same LexID®.
  • Enhancement: Identity profiles are continuously updated to ingest new records. This dynamic process paints an extremely accurate picture that accounts for identity changes over time.

LexisNexis linking technology called Scalable Automated Linking Technology (SALT) provides data profiling and data hygiene applications to support the data preparation process. In addition SALT provides a general data ingest application which allows input files to be combined or merged with an existing base file.

How does LexID® work with SALT?

Having the largest database of linked public and proprietary information helps our customers fight fraud, mitigate risk and remain compliant:

  • Shed light on suspicious entities or transactions
  • Quickly hone in on irregular data points or outliers
  • Identify collusion or undisclosed relationships
  • Eliminate false positives
  • Protect your customers’ personally identifiable information
  • Create a comprehensive view of an individual.

Data profiling, data hygiene and data source consistency checking, while key components of the record linking process, have their own value within the data integration process. All of these are also supported by SALT and can be leveraged even when record linking is not a necessary part of a particular data work unit.

SALT uses advanced concepts such as term specificity to determine the relevance/weight of a particular field in the scope of the linking process, and a mathematical model based on the input data, rather than the need for hand coded user rules, which is key to the overall efficiency of the method.

SALT is also used to prevent fraud by verifying identities, addresses and other factors and using information on relationships to see where collusive activities might exist within property and casualty insurance, health care fraud, mortgage fraud and other financial services transactions.

LexisNexis has been recognized by Information Week for this technology which holds 30 patents with respect to record linkage and other technology, with over 99% accuracy.

You can learn more about SALT on the HPCC Systems website.

Follow the link to the LexisNexis Risk Solutions website to find out more about how we support insurers.