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Motor insurance companies encouraged to use new data sharing hub to cut fraud

Insurers will gain access to information about drivers' motoring convictions and penalty points through a new data sharing hub if they comply with a range of technical and security standards, the Association of British Insurers (ABI) has announced.19 Nov 2013

The trade body has encouraged firms to adopt the scheme and said those that do will be able to better identify fraudsters, settle claims faster and set motor insurance premiums at a more accurate rate to reflect the risk individual drivers present.

The scheme will work by requiring motor insurance cover applicants to provide their driving licence number to insurers that sign up. This information would then be used to find out details about applicants' motoring convictions and penalty points, the ABI said.

The new data sharing programme has been formed by the ABI, Motor Insurers’ Bureau (MIB), the DVLA and the Department for Transport and is scheduled to be introduced before the end of June 2014 following a testing phase in February.

'Honest customers' will save £15 on average on their annual premiums and individuals seeking motor insurance cover will fill in fewer questions during the application process, the ABI said.

"An industry hub, managed by the MIB, is being developed and will enable the motor insurance market to securely obtain the driver data from the DVLA, with the aim of improving the pricing of premiums against accurate driver information and reducing fraud," the ABI said. "The MIB will work with participants using the hub to ensure they comply with the technical standards and have adequate security and data protection safeguards in place."

Insurers, brokers, comparison websites and software providers are being encouraged to display a 'MyLicence' logo on their websites, customer communications and marketing material to raise awareness among the public of their need to supply their driving licence number to obtain a quote.

"To get the DVLA data, every broker, insurer and price comparison website will need to use the hub," Ashton West, chief executive of the MIB, said. "This is supported by a range of standards and governance, and should give the public assurance that their data is being gathered securely and appropriately. Some of the industry’s leading software houses, price comparison sites and brokers are already gearing up and preparing their systems to link to the hub early in the New Year."