NEEDHAM, Mass. – December 17, 2013 – Enservio, Inc. (www.enservio.com) today released research that burglary theft claims – exceptional for being the largest category leader in the insurance property business – spike during certain times of the year and are increasing in frequency, value, and suspicion. Reinforcing these findings, a recent NICB study pointed to a sharp rise in "questionable" property claims it received from its carrier members over a three-year period.
Enservio research revealed notable data points including:
- Average property contents claim settlement is $4,000 and growing.
- Burglary claims reported to insurers spike in December, April, and September.
- The average stated value of many items being claimed is more than twice the actual retail value.
- Burglary claims are increasing in value, outpacing the rate of inflation* by two to three percent.
A report released in October by the National Insurance Crime Bureau further validates the data. Suspicious personal property claims reported to the NICB increased by 46% from January 1, 2010 to December 31, 2012. The vast majority (72%) of these "questionable claims" were associated with homeowners' policies. (Source: http://dld.bz/cSXkw)
Enservio derived its findings by conducting a statistical analysis of its data warehouse comprising billions of dollars' worth of settled contents claims across all geographies, perils, policy types and claim sizes. Data from the aggregated pricing of millions of consumer products from hundreds of retailers, with pricing refreshed daily, were also factored.
"We have terabytes of data about the contents inside the average American home tied to its location and demographics," said Jon McNeill, Enservio CEO. "Searching for insights to better service our carriers, we delved into this data to analyze all types of property claims against consumer product categories. We studied the frequency of property claims and time of year when claims were filed to arrive at our findings.
Top Category Leaders: Jewelry, Electronics, Apparel
The top item in the jewelry category that people claim most are rings, with the average settlement of $834. However data show that the average retail price for a ring is $350, which amounts to a 138% difference.
In the electronics category, Enservio data show that laptops are the most frequent item claimed, with an average settlement of $772. However the average retail price for a laptop is $456 -- a difference of 69%.
The third most popular category where insureds are filing claims is apparel. Women's purses is the top item. The average settlement is $448, however the average retail price for a women's purse is only $65, which accounts for a difference of 589%.
Seasonal Impact on Burglary Claims
Not surprisingly, the highest volume in theft claims occurs in December, at the height of the holiday season. The second highest volume of claims recorded takes place in April, during tax time. September is the third highest in claims frequency, a time of year typically associated with back to school shopping and tuition payments.
Recommendations: Slow down and scrutinize
Despite standard industry practices of fast-tracking these high-volume, low-value claims, Enservio recommends that carriers simply slow down the settlement process during the heaviest claims transactions of the year – during December, April, and September – and apply closer scrutiny during these months. Other recommendations include:
- Use data analysis to score claims on their fraud potential early in the process
- Compare claim values to actual average retail values to flag questionable claims
- On suspicious claim values, ask the policyholder for proof of purchase, or credit card statement; make careful comparisons to the police report
- Give adjusters access to current retail prices on the most common claims category leaders
- Prepare adjusters with a list of qualifying questions to ask the claimant, which will speed the investigation process
- Allow technology to flag suspicious claim amounts, allowing claims professionals to focus their time on higher value cases and most important, to expedite legitimate claims for loyal customers
- Use the power of predictive analytics to deliver more accurate payment amounts to insureds
- Use data analysis to identify who are the most loyal and profitable customers and develop more meaningful products and programs for these valued policyholders
"Our findings show that a simple form of analysis of big data can reveal important trends and spur actionable results that should make a real difference in the profitability of homeowners insurance," noted McNeill.
* (Rate of inflation is under 2% for 2013. Source: The Bureau of Labor Statistics, Consumer Price Index http://www.bls.gov/news.release/cpi.toc.htm)
Enservio® works on the biggest challenge in property insurance – what's inside. We provide a complete suite of software and service solutions to help property insurance carriers price their policies correctly, settle their contents claims quickly and accurately, pay their claims, and help policyholders get their stuff back. Founded in 2004, we are headquartered in Needham, MA, with offices and professional staff across the United States. Enservio is a strategic partner of the National Insurance Crime Bureau (NICB) in their continued fight against insurance fraud. For additional information, please visit the company's web site www.enservio.com or call 888.567.7557. Connect with Enservio via LinkedIn (http://us.linkedin.com/company/enservio), Twitter (https://twitter.com/enservio), and Facebook (https://www.facebook.com/enservio).
Enservio is a registered trademark of Enservio, Inc. All other trademarks referenced are the property of their respective holders.