Relationship building ‘surely the end goal’ of analytics

Data Matrix

Insurers need to do more to build on their data and analytics capabilities to address customer needs, a conference heard.

Data can be used as a tool to mitigate risk for clients, but so far insurers have largely relied on it to bolster their internal workings, delegates at Guidewire Connections in Las Vegas heard.

Axis global head of cyber, Dan Trueman said: “Using data and analytics and the tools we have to improve our relationships is surely the end goal.

“How many of the problems we seem to try to deal with and face are about our internal challenges?” He asked. “One of the biggest debates: we have been offering marine insurance for 300 years and we can’t decide whether piracy is a peril of the sea or needs its own class of insurance. That is the sort of thing we deal with on a daily basis. It’s not really moving the needle and taking us forward.

“How do we make insurance better? How do we stop lagging behind other industries? The great use case for that is the idea of how do we turn that externally and make the risk better.

“A particularly good example is: Cyence gave us really useful insight last year. Before Wannacry and Notpetya, was the Eternal Blue hack. We were able to look at that, look at the vulnerabilities it was going to exploit, then look at our client base and use it as an opportunity to talk to those clients.”

Trueman was responding to comments made by Aviva managing director of SME, Gareth Hemming.

“We are behind,” Hemming warned. “We are behind because we have used our capability for our purpose and not thought about how we can use it for customer purposes.

“It is a massive irony that we are an industry based on data and based in predicting loss and have been doing it for hundreds of years. And yet we’ve got to the point where we are just doing it for ourselves.

“Over the last 10 years or so we have moved to the point where we are automating and underwriting straight through about 60% of our SME policy count, but that’s still 40% of SMEs that we are saying are too complicated. That doesn’t make sense to me, with what you can do elsewhere.

“The bigger shame is that what we’ve put our skill to use for is our benefit. Better return on investment, lower loss ratios, better capacity, better efficiency, and it’s only recently really that we have started to turn our attention to how we can use our skills and capability for the customers’ benefit. How can we start to predict incidents, or losses, or issues for that customer?”

Hemming added: “Generic warnings don’t work. People just get used to them. If you can be really precise, really helpful and in my part of the business, if I can stop small businesses being disrupted then I feel we are doing a massive good. There is employment there. There are businesses that will succeed.”

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