Improved mortality checks via Experian have helped save Guardian Financial Services from significant annuity overpayments

Experian has announced a deal to provide Experian address and mortality screening services to Guardian Financial Services, the life assurance group which manages over 300,000 life insurance and pension policies.

A proof of concept exercise enabled Guardian to recover significant annuity overpayments. Additionally, future overpayments were prevented and Guardian was able to release reserves held against these annuities. A further benefit resulted from more accurate understanding of the company’s mortality experience. Guardian has now introduced regular screening of annuity records into business processes using Experian services.

The services Experian provides to the company help screen annuity records to identify changes of address and deceased individuals, allowing data records to be corrected. This can reduce overpayments for pension funds. In particular, it significantly reduces the risk of fraud where individuals receive pension payments to customers who have died. Misdirected and insensitive communication is also a common result of unreliable data.

The Pensions Regulator has stipulated that pensions administrators and managers must adopt minimum standards for maintaining data. As of December 2012, data such as names, addresses and national insurance numbers which were created after June 2010 must be 100% accurate, while those created before June 2010 must be 95% accurate. Action plans to meet both of these targets had to be completed by the end of last year.

Guardian Financial Services now uses Experian’s customer tracing service, Autotrace Plus, to validate the addresses of policyholders receiving pensions. In addition to ongoing financial benefits Guardian has also been able to identify and correct under-payments to pensioners that it had previously been unable to trace.