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Summary
- As an industry awash with inefficient, time-consuming processes, commercial insurance has slowly evolved to embrace technology to help improve efficiency, enhance service, and expand the market. However, one aspect that is crucial to enacting sector-wide change is often the most overlooked: data.
- As we continue to see additional consideration given to emerging technology, it is important to remember that the opportunities for insurance professionals to mine their data for greater business value have never been higher.
- By analysing data on claims processing, policy administration, underwriting, and other areas, insurers can identify bottlenecks and inefficiencies. This enables them to streamline processes, reduce costs, and allocate resources more effectively.
- By harnessing the power of data insights, insurers can enhance their risk assessment models, leading to more precise predictions.
- Data is a powerful tool for any business, but especially for those that deal with uncertainty, complexity, and volatility. By prioritising improving your understanding of your data, this can, in turn, lead to more accurate decision-making and ultimately a competitive advantage.
While tradition holds value, it should never hinder progress. As an industry awash with inefficient, time-consuming processes, commercial insurance has slowly evolved to embrace technology to help improve efficiency, enhance service, and expand the market. However, one aspect that is crucial to enacting sector-wide change is often the most overlooked: data.
As we continue to see additional consideration given to emerging technology, it is important to remember that the opportunities for insurance professionals to mine their data for greater business value have never been higher. As risk management is not a static or one-size-fits-all process, constant adaptation, innovation, and learning from data sets is required to stay ahead of the curve.
Read on to learn how data-driven insights and platforms are transforming the way business functions focus their time to add the most value.
Operational efficiency
When it comes to efficiency, improved data analytics has revolutionised the insurance industry, enabling companies to make more informed decisions, improve risk assessment, enhance customer experience, streamline operations, and improve performance. For example, including automatic alerts offering the ability to focus on the key risk events and being able to make faster decisions to mitigate risk, as well as improve balance sheets and risk retention strategies in captives.
By analysing data on claims processing, policy administration, underwriting, and other areas, insurers can identify bottlenecks and inefficiencies. This enables them to streamline processes, reduce costs, and allocate resources more effectively.
Risk Assessment
By harnessing the power of data insights, insurers can enhance their risk assessment models, leading to more precise predictions. The analysis of historical data encompassing customer claims, demographics, and various influencing factors enables the identification of valuable patterns and emerging trends. Armed with these insights, insurers are better equipped to assess the probability of a claim and establish suitable premium rates.
Similarly, for insurance buyers, data can be analysed to combat claims inflation and ensure that all their insurable values are accurate, reducing the risk of underinsurance and enabling businesses to make more informed decisions more quickly to better prepare for future events. The more detail that can be provided, the better.
Exposure management
Insurers are increasingly looking to improve how they collect and visualise their risk data. This is because the current way of doing business involves a lot of data being placed and sourced across a wide variety of teams and locations, with many insurers having to rely on manual updates via email and spreadsheets to even attempt to understand or visualise where their exposures are and their relation to what’s currently happening geopolitically.
To get a solid grasp of your exposure, access to good quality data and an effective form of visualisation for that data is key to both understanding and making better-informed decisions about contracts, premiums and claims.
With improved data literacy and availability, risk professionals can access detailed information about future geopolitical events, and other factors affecting policy rates, allowing them to better understand their exposures, pick up on patterns and, most importantly, focus on the details that matter most.
Renewal preparation
With risk managers facing increasing scrutiny of their submissions, high-quality data has never been more important as they compete with their peers for scarce capacity. In this environment, a corporation’s data and the ability to understand and present its risk have become essential to creating value through risk management, risk retention or risk transfer, helping reduce its exposure to market fluctuations.
To get this quality, having a solid process in place that underpins your framework is crucial. To establish this, individuals must access and own their data, aligning stakeholders by prioritising the areas of biggest impact like reducing admin or increasing data completeness. With your data consolidated, the true power of decision-informing analytics can be obtained.
A single source of truth
When it comes to technology, having a single source of truth to maintain asset and related data in a single place, minimises the need for mass consolidation exercises while a unified data model can standardise the way asset and insurance-related information is captured across the business. Last but not least, as outlined already, data accuracy is king, so take advantage of tooling that can validate your data.
Insurwave’s platform is one such tool that can help you bring together all your disparate data sources into one place alongside all stakeholders in the insurance value chain. Through the platform, users can track live risk information and automatically assess the impact on cover, from automatic declarations of war breaches required under marine war policies to automatic premium adjustments when a new property is added to a schedule of values.
Because brokers and insurers are connected to the same data, reconciliation and data disputes are eliminated. In this way, data can serve as an integration tool to strengthen the partnership that exists between all parties, with consolidated data acting as an integrator in the process.
Enabling smarter risk transfer decisions
Ultimately, it doesn’t matter how vast a data set you hold – if the quality of data is poor, the insights you get from it won’t be much better. Accurate data is essential for risk assessment, underwriting, pricing, and claims processing and good data governance helps maintain data quality and accuracy by implementing standardised processes for data collection, validation, and maintenance.
Data is a powerful tool for any business, but especially for those that deal with uncertainty, complexity, and volatility. By prioritising improving your understanding of your data, this can, in turn, lead to more accurate decision-making and ultimately a competitive advantage.