Insurance product mis-selling is one of the key and consistent themes that regulators everywhere place a hawkish eye on. Mis-selling compliance is very complex for insurers as it involves many agents and large number of products. The buyer/seller dynamic is exceedingly difficult to monitor.

While insurers place great emphasis on education, training, and process standardization to minimize mis-selling, it is no doubt a labor-intensive and elusive process. Breaches often get reported in the news, which often result in regulatory fines and irreparable harm to reputation.

We believe one smart way to go about detection is through the analysis of data. If events are recorded in the data, we can help to discover it.

We have had numerous conversations with insurers on this topic. While the amount and type of data varies in each company, typical insurers do record sales and agent behaviors.

In one application, we applied Relacio to the data on a portfolio of newly issued policies. The data only contains policy information. Yet with such a small size of data, our findings are interesting.

Examples of what we found are: 

Both are potentially mis-selling cases.

Relacio can be placed as a safeguard check before the policy is issued.