Spotlight: Smarter decision making – Better, faster decision-making

With insurance evolving at an unrivalled pace, Satyen Paneri of Guidewire Software argues investment in a smart loop analytics can help companies make ‘brilliant’ decisions to achieve better outcomes

The world we live in has changed, much more so in the past two years than ever before. The way individuals and businesses work has fundamentally changed due to the Covid-19 pandemic; cybercrime is exploding; there is a significant rise in intangible assets; the protection gap keeps growing; and rules and regulations keep changing. The nature, frequency, and severity of risk has changed, and to stay relevant and competitive, insurers must adapt quickly to this new environment.​

Fortunately, the business of insurance is the business of data and today the amount of data available is huge and keeps increasing exponentially. Both companies and individuals imprint digital footprints that can be traced, measured, and gathered to create insights for competitive advantages. Insurers are investing heavily in artificial intelligence and advanced analytics to exploit the many opportunities for innovation that they offer across claims, underwriting, and pricing. Insurers have also put in place teams of data scientists and use a variety of tools, technologies, languages, and platforms. But few are seeing a return on their investment. Many a times, unclear business objectives, misalignment of teams, and lack of early strategic planning hold them back.

Embedded real-time analytics

Insurers make tens of thousands of decisions daily. The main purpose of data is to provide actionable insights for decision making. What if these decisions were smarter, faster, and consistent? What if the people making these decisions were ‘brilliant in the moment’?

Being ‘brilliant in the moment’ requires having the right information in the right place at the right time. A smart loop analytics platform makes this possible by enabling insurers to make agile predictions based on current, validated data that is fed into predictive models that in turn embed actionable insights into business processes.

So how does a smart loop analytics platform work?

First the smart loop analytics platform equips insurers with data from all sources. This includes data from their core systems; behavioural and hard to find social data; valuable third-party data such as telematics and demographics; and aggregated, anonymised peer benchmarking data.

Simply collecting all the data is not sufficient. The data must be curated to make it useful and accessible. This is a very hard problem to solve and is often the biggest barrier to success. It is not uncommon for the data curation effort to be spent in any analytics project almost 80% of the time. The smart loop analytics platform makes data curation easier with automated metadata-based techniques. Moreover, as additional data continues to flow in, it is curated and made available in near real time.

Next the smart loop platform adds a modelling platform to build predictive and prescriptive models that turn the data into insights and then into value by embedding the intelligence into core business processes in real time.

The modelling platform offers a rich set of machine-learning algorithmic techniques such as tree-based approaches (including boosting and bagging techniques), regression-based approaches (including generalised linear models (GLMs) and several forms of penalised regression), text mining, and neural networks. The platform easily plugs into open-source languages and supports the import of models built using third-party tools. It also includes ready-to-use modelling solutions for common use cases across claims, underwriting, and pricing.

The smart loop analytics platform enables a consistent and repeatable model building and deployment process that turns your analytics workshop into a modelling factory. Models deliver business value in a matter of weeks rather than months and years.

Finally, business conditions and modelling data change all the time. Therefore, it is essential to continuously evaluate how a model is performing and how it is impacting the business. The smart loop analytics platform automatically detects model deterioration, data drifts, and finds abnormal activity by monitoring details at a transaction level. It enables A/B testing for models and the ability to continuously evaluate risk. This feedback mechanism is what make the smart loop analytics platform unique and powerful.

The smart loop analytics platform is like a flywheel that spins faster and faster with each of the pieces reinforcing the other [see infographic, below]. It keeps getting more powerful with more data and with more usage. The smart loop platform makes data and analytics accessible to a wide array of people, facilitates the sharing of information with the team and keeps records for model management.

Optimal outcomes

More than 200 insurers are successfully using the smart loop analytics platform for improving risk selection, turning around underwriting profitability, smarter claims triage, maximising recovery, more straight through processing, and improving loss ratios.

Analytics is a creative process, and this must not be compromised – but neither can speed to market. To navigate what is next in today’s fast-moving world; an investment in a smart loop analytics platform can help insurers achieve agile prediction by making each decision brilliant. 

Sponsored

More from sponsor

• Technology

Spotlight: Smarter decision making – Intelligent lead pricing: helping counter SME underinsurance

For businesses, finding at the time of a claim that their policy will not pay out can be catastrophic. Unfortunately, underinsurance among SMEs is a growing problem. Valerie Hart looks at how improving intelligent lead pricing through digital technology and data enrichment can help

• 16 Sep 2021