MID2 Policy Supply: Recommendations for Best Practice...MIIC has a report (FR07) which lists the...
Transcript of MID2 Policy Supply: Recommendations for Best Practice...MIIC has a report (FR07) which lists the...
MID2 Policy Supply:
Recommendations for
Best Practice
1. Background and purpose of thisdocument
In 2004 Professor Greenaway made a range of
recommendations for improving the data quality of the Motor
Insurance Database (MID) in order to meet the requirements
of improved enforcement of the motor insurance obligation.
A subsequent report by PA Consulting on behalf of the
industry concluded that the enforcement regime would be
served most cost-effectively if the time-to-supply targets for
MID1 (individual) policies were reduced to 95% of records
within 7 days, and MID2 (‘fleet’) targets remained the same,
i.e. policy updates within 14 days and vehicles within 21
days.
The MIIC responded to the PA report by proposing a ‘Fitness
for Purpose’ programme which would aim to meet the
proposed revised MID1 targets (95% within 7 days) and the
existing MID2 targets (which have yet to be met), and would
address other data quality requirements which would make
the data ‘fit for purpose’. This document sets out a number
of recommendations relating to the fitness of MID2 policy
data and outlines action also being taken by MIIC in these
areas.
There are three factors which go to make up ‘fitness for
purpose’ (and which are referenced in the MIB Article 76):
• Completeness
• Accuracy
• Timeliness
Each of these is addressed in turn.
2. Completeness
In MID2 a policy cannot be accessed by MID stakeholders
unless it also has the associated vehicles loaded. The issues
surrounding MID2 vehicle supply are addressed within the
MID2 Vehicle Supply Best Practice Guide.
It should be noted that the vehicle information cannot be
loaded until the policy is present on MID2 and therefore
completeness of vehicles is impacted by the completeness
of policies.
The more information that can be populated in the MID2
policy record the better, for more effective and efficient
enforcement. However, it is MIIC's belief that ‘Class of Use’
and ‘Permitted Driver Codes’ are rarely populated on MID2
policy records and in most cases the police are informed
that they should refer to the insurance certificate.
Unfortunately, the certificate of insurance (particularly if it's a
motor trade one) is often not easy to understand and this
can potentially lead to vehicles being incorrectly impounded
or unnecessary calls from the police to insurers.
However, it is recognised that a Motor Fleet policy will very
often cover a variety of vehicles with different ‘Class of Use’
and ‘Permitted Driver Codes’. Whilst these codes are of
some value at vehicle level, at policy level the value is limited
because of the large variations typical within a fleet. For
motor trade, the complexity of class of use and permitted
drivers is even greater and this is the reason why a ‘refer to
certificate’ instruction is commonly applied.
2.1 Management Information
Report 45 (MIIC Full Data Extract Report) provides
MIIC with the capability to estimate what percentage of
MID2 policy records have the optional data fields
populated. MIIC will start the planning stage of MID2
audits during the second half of 2006, with insurer
audits likely to begin in 2007.
2.2 Insurer information
Insurers are currently sending all the MID2 relevant
information, with the possible exception of the ‘Class
of Use’ and ’Permitted Driver Codes’. None of the
insurers/DAs involved in the MID2 ‘Policy Barriers
Workshop’ believed that they submitted the ‘Class of
Use’ or ‘Permitted Driver Codes’. Therefore, MIIC
believe it is reasonable to assume that the majority of
insurers/DAs do not submit this information to MID2.
2.3 Recommendations for insurer action
To assist enforcement agencies in carrying out their
role more efficiently and effectively:
(1) Insurers should populate the ‘Class of Use’ and
‘Permitted Driver Codes’ if that information exists
within their policy management systems. If this
information is not held at policy level but exists at
vehicle level, then the insurer should only send it
if they submit vehicle information on behalf of
their policyholders.
(2) Insurers should work towards making blanket
policy insurance certificates, particularly those
relative to the motor trade, easier to understand.
However, this will first require
clarification/guidance from the police as to the
exact nature of the perceived problem. (See MIIC
action in section 2.4).
2.4 MIIC action
To assist enforcement agencies carry out their role
more efficiently:
• MIIC is aware that some police officers appear to
have difficulty interpreting fleet/motor trade policy
certificates. MIIC, with assistance from some
insurers, will provide the police with information that
could be used for training purposes.
3. Data accuracy
MID2 policy data can be inaccurate in two key ways (in
addition to the fact that it is simply not present). It may
show the wrong policy period, e.g. because the information
was incorrectly keyed in either by the insurer or the broker. It
may also have had the policyholder details entered
incorrectly. Inaccurate data can also adversely affect ‘Time
to Supply’ (TTS) figures if the correction is not detected and
applied to the MID quickly enough.
3.1 Management Information
Report 45 (MIIC Full Data Extract Report) provides
MIIC with the capability to compare insurer MID2 data
with that held on the MID and thus check the accuracy
of the data submitted to the MID. MIIC will start the
planning stage of MID2 audits during the second half
of 2006, with insurer audits likely to begin in 2007.
3.2 Insurer information
Insurers tend to know, from internal MI, who within
their organisation entered data onto their policy system
and therefore, should be able to identify those
individuals whose attention to data accuracy could be
improved.
3.3 Recommendations for insurer action
To help improve the quality of policy data submission
to MID2:
(3) Insurers should calculate the ratio of ‘Amend to
New’ records submitted and if it averages out
high (>2:1) establish whether this is down to a
data accuracy problem or the submission of
unnecessary amendments (i.e. the submission of
policy amendment records to policies that do not
change the existing information). The root cause
of the problem should then be investigated and
resolved.
(4) Insurers should retrain staff if necessary and
emphasise the need for accurate data entry. In
general, insurers' systems record which member
of staff updated the records on their internal
systems therefore, consideration should be given
to linking data accuracy into staff appraisals or
performance reviews.
MID2 Policy Supply: Recommendations for Best Practice
3.4 MIIC action
To help improve the quality of policy data submission
to MID2:
• The MIIC aims to support insurers in addressing
data quality by providing information on the
accuracy of data. Where this information is
deficient, MIIC will seek to improve the usefulness.
However, at this stage no improvements to the MI
have been identified that will have a benefit on data
accuracy for MID2 policies.
4. Time to supply
The Time to Supply target for MID2 policy data is 95% of
records to be submitted within 14 days; the market average
as measured at December 2005 is approx 90%. It should be
noted that late submissions of new policies or policy
renewals can affect the timeliness of MID2 vehicle
submissions resulting in reduced effectiveness of MID for
enforcement purposes.
The following barriers to hitting the TTS target have been
identified:
• Problems within insurers' own systems, such as
submitting unnecessary amendments with effective dates
more than 14 days late. 'Unnecessary amendments' are
the submission of policy amendment records to MID2
policies that do not change the existing information.
• Error/reject handling processing is not efficient or
effective.
• Submitting non-critical backdated corrections (e.g.
incorrect spelling of names and addresses) more than 14
days after the event.
• If there is any delay on the part of the policyholder or
broker in the notification of MID relevant changes to the
insurer - in particular Amends, Cancellations and Lapses.
• Amends/Cancellations/Lapses may take lower priority
than new business - new business typically generates
income, whilst cancellations may create bad debts.
• Some organisations (including some insurer branches and
brokers) do not currently recognise the benefits,
advantages, urgency or importance of supplying MID2
data in a timely manner. This is likely to be due to a lack
of awareness.
• Wholesale broking can adversely affect TTS due to the
multiple links in the broking chain, e.g. if there are 3
brokers involved each taking 7 days to pass the
information up the chain, it would clearly exceed the 14
day TTS target.
• Lack of electronic data transfer within the fleet/motor
trade policy market and a heavy reliance on cover notes.
• There can be delays in getting supporting documentation
from the policyholder to the broker and hence to the
insurer. This can hold up the entire policy notice to the
insurer and hence to the MID.
• Ineffective communications throughout the insurance
industry (and the public, including MID2 policyholders) on
the benefits of MID and the systems it supports.
4.1 Management Information
MIIC MID Management Information (MI) is supplied to
insurers either directly from Experian or from MIIC. This
information provides a good overview, but in some
cases it can be too generic to help insurers identify
their specific issues, which can be system or process
specific.
There is a belief that there is sometimes inconsistency
between MIIC generated MI and insurer MI. It is
believed that this is probably down to a
misunderstanding of what the MIIC MI is showing and
therefore guidelines explaining the MIIC MI should help
address any such misunderstanding.
Report 15 provides MIIC with the policy ‘Time to
Supply’ (TTS) figures for MID2 insurers; MIIC use the
information within this report to track insurers TTS
performance. This report is for MIIC use only and
cannot be issued to insurers as it contains information
that is insurer-specific.
MIIC has a report (FR07) which lists the number of
records submitted for each supplier. This report is
broken down in to the number of New, Amend, Cancel,
Lapse, Reinstatement, Renewal and Delete records.
From FR07 it is possible for MIIC to calculate the ratio
of Amend to New records submitted each month for
each insurer; the higher the ratio the more likely that
corrections or unnecessary amendments are being
applied to policy records. This report is for MIIC use
only and cannot be issued to insurers as it contains
information that is insurer-specific.
MID2 Policy Supply: Recommendations for Best Practice
4.2 Insurer information
Insurers have error messages returned to them and
therefore know which records have been rejected and
for what reasons. They are, therefore, able to identify
which records require to be corrected and resent to
MID, as a priority, in order to minimise the impact on
their TTS figures.
Insurers also know which policies reside with which
brokers and are able to identify which brokers are the
poorer performers.
Insurers know how many ‘New’ and ‘Amend’ records
they submit to MID2, since they are the ones who send
the data. They also have any errors returned to them
over their batch link; insurers therefore have some
additional information about the likely accuracy of
MID2 policy data. They can calculate the ratio of ‘New’
to ‘Amend’ records and if it is high they have the
information to investigate whether or not this is related
to corrections or unnecessary amendments; both of
which can have an adverse effect on TTS figures.
4.3 Recommendations for insurer action
Recommendations to help prevent the submission of
unnecessary amendments:
(5) Insurers should educate their own staff and
brokers as to what data items are required for
MID2 and what isn't relevant data. Distribute the
MIIC guide that provides examples of changes to
the policy that are and aren't relevant to MID2.
(6) Insurers should investigate their policy
management systems to identify unnecessary
amendments and prevent them being sent, e.g.
ensure that amendments have the appropriate
effective date and not always the policy inception
date, also ensure that changes to non-MID
elements don't trigger an amendment to be sent
to the MID. It is possible to calculate the ratio of
‘Amend’ to ‘New’ records submitted and if it
averages out high (>2:1), insurers should then
establish whether this is down to a data accuracy
problem or the submission of unnecessary
amendments. It is important to identify and
address the root cause of the problem.
(7) Insurers who submit vehicle data on behalf of
their policyholders should check their systems to
ensure that a vehicle amendment doesn't trigger
an unnecessary policy amendment.
Insurer/DA systems-related recommendations:
(8) Pre-validate data before sending it to MID2 to
help minimise the errors generated. Some
insurers have found that using a separate system
from their policy management system to sort and
submit MID2 data is an effective way of
addressing this.
(9) Don't delay sending updates to MID2 whilst
waiting on non-MID2 related data, as only
minimal data is required to set up a MID2 policy.
(10) Industry-level TTS figures available to MIIC
indicate that insurers should, when tackling the
reduction on TTS, give priority to the submission
of New records, followed by Amend followed by
Cancellations submissions to have the largest
impact on TTS. However, it should be stressed
that is based on industry-level statistics and will
not be appropriate for every insurer. Therefore
each insurer should focus priority based on the
findings of their own management information
and investigations. It should also be noted that
for a number of insurers the number of Amend
messages may be higher than the number of
New records submitted.
Recommendations on Error/Reject handling:
(11) Insurers should use/develop appropriate internal
MI to identify errors and carry out a full
investigation to identify the root cause of the
problem. It is important to use appropriately
skilled resources to carry out these activities.
(12) Insurers should ensure that errors are corrected
and resubmitted promptly, so as to minimise the
effect on TTS.
Recommendations on updating backdated corrections:
(13) Non-critical backdated changes need only be
applied from the notification date not the actual
effective date. It should be stressed that non-
critical changes are the correction of a misspelt
name or address, but not the wrong name or
address or the incorrect cover period. As an
example, ‘Stephenson's Bakers’ being changed
to ‘Stevenson's Bakers’ is a non-critical change,
but changing it to ‘Johnston's Bakers’ is a critical
change and should be submitted with the actual
effective date, so that the correct information is
returned for the whole cover period.
Recommendations to improve Broker timeliness
(14) Insurers should send a clear message to brokers
to explain what is required of them to meet MID
TTS targets. This message will be a standard
guide that all insurers can use within their broker
correspondence. The notice will be provided by
MIIC and sent to all brokers.
(15) Insurers should work closely with their brokers to
ensure TTS targets are met. Where a broker
shows a consistent record of late submissions
the insurer will need to consider what action it is
appropriate to take given the overall relationship
that exists between the insurer and broker.
(16) The aim should be to move to electronic data
transfer in the fleet/motor trade broking market,
ultimately reduce number of cover books and
issue the policy immediately. However, the move
to electronic data transfer is a longer term
solution.
(17) In wholesale broking there can be several links
(brokers) in the chain before the data reaches the
insurer. Therefore insurers should look at the
number of links and reduce the time each link
(broker) has to pass the data on, ensuring that
the total end to end time is less than 14 days. If
the insurer is not aware of the number of links in
the broking chain then this message needs to be
disseminated through the chain by the broker the
insurer interfaces with. Where there is evidence
that the chain of activity can not be reduced to
permit MID data to be provided within the
relevant TTS targets the insurer will have to
consider what other action may need to be taken.
(18) Getting supporting documentation from the
policyholder to the broker and hence to the
insurer can take a while. Therefore, insurers
should encourage brokers to focus on the
information that is required for MID2 population,
i.e. the broker should not allow non-MID related
data to prevent the sending of MID2 updates to
the insurer.
(19) Brokers should ensure that sufficient numbers of
staff are aware of the importance of submitting
accurate data for MID in a timely manner. MID
updates should be built into business
processes/procedures. Specific MID related
training should be considered.
Recommendations to insurers to address timeliness
issues
(20) Insurers sometimes receive batches of updates
from brokers. In such cases they should give
priority to incoming communications that are MID
related.
(21) Insurers should inform their MIIC account
manager if they know they're going to have poor
a TTS performance for a particular month. They
should explain the issue/problem and what action
is being taken to resolve the matter.
(22) In order to be proactive in meeting the 14 day
TTS target, insurers should develop appropriate
internal Management Information (MI) rather than
relying solely on that provided by MIIC, as the
issues faced can be specific to the insurer's
organisation/systems. It will also enable particular
problem sources to be identified.
MID2 Policy Supply: Recommendations for Best Practice
4.4 MIIC action
To help prevent the submission of unnecessary
amendments:
• The MIIC will produce guidelines that can be used
to educate the market as to what information is
required to be submitted for MID2. The guidelines
will cover what data is and isn't relevant, and also
include what constitutes an amendment on a MID2
policy, (e.g. change of address as opposed to
renewals). The guidelines should also link to, or
incorporate, the MI guidelines as appropriate.
• The MIIC will look at the ratio of ‘Amend to New’
records and approach those organisations that have
a high ratio (>2:1) with an aim to understanding why
it is high. Ensure any corrective activities are built
into the insurer's action plan.
To help improve MID awareness:
• The MIIC will approach the Government to promote
the advertisement of the MID to raise awareness
amongst the general public and MID2 policyholders.
However, there is no guarantee that the Government
will agree to undertake such a campaign.
• The MIIC will produce focused and specific MID2
communications to raise awareness within the
broker community, getting the message across on a
regular ongoing basis regarding the importance of
accurate and timely updates to the insurer.
• The MIIC will provide effective MID-related
communications to the general public and MID2
policyholders e.g. the new offence of being the
keeper of an uninsured vehicle, communication on
how MID is being used to support Automatic
Number Plate Recognition (ANPR) and the DVLA
Electronic Vehicle Licensing (EVL).
To provide clarification on MIIC generated MI:
• MIIC will provide a guide to MIIC-generated MI; it
will also describe how insurer TTS is calculated and
provide an explanation of the different update types
associated with MID2.
MID2 Policy Supply:
Recommendations for Best Practice
For further information, please contactMotor Insurers’ Bureau, Linford Wood House,
6-12 Capital Drive, Milton Keynes MK14 6XT. Tel: 01908 830001 Email: [email protected] [email protected]
www.mib.org.uk www.miic.org.uk