“The CIO of a mutual might have a
45-year-old admin system he needs to re-
place. Is he thinking about that or finding
a place for all the data he hasn’t any room
for?” asks Edwards. “Insurers delayed the
inevitable in terms of what needed to be
done for so long that they are caught in
this trap. They have to do a core system
replacement and they are kicking the can
down the road. They can’t take care of the
foundational stuff so they can move into
the more innovative areas.”
The delays get longer because it takes
so much time to seek out and find the
right platform.
“How long does it take for an insurance company to settle on a core system
vendor? You have to hire a consultant,
spin off all these resources and the
process has become so challenging and
consuming,” says Edwards.
The Future
In 2014, Pauli believes the big data
streams will become more normal
streams. Instead of Big Data being a
project, she believes it will become part
of the mainstream data.
“It’s getting easier in part because
of technology,” Pauli explains. “Cloud
technology allows us to leverage tech-
nology without the cost of infrastructure
projects. That makes it easier and more
manageable.”
The data is going to get better,
insists Fowler, and will allow carriers to
examine each part of their business—
underwriting, claims, marketing—with a
holistic view of all the actions and inter-
actions among agents and customers.
“You will find interactions you never
knew about or interactions you are
missing,” says Fowler. “I guarantee those
are out there. I’ll take that to the business
unit level and they’ll get amazing results.
How to profile the book of business
and map that to what we already know
about. We can profile a risk or profile the
set of activities that underwriters should
go through to minimize the time it takes
them to get the best possible quote out
there.”
A second focus for the future is
telematics and what is going to happen
going forward with the different technol-
ogies and data capabilities.
“The type of data that is going to be
thrust upon us without even asking for
it is going to be something we have to be
ready for,” says Fowler. “I wish it was top
of mind, but at least it’s in the back of my
mind because it is going to be a whole set
of issue and you can’t let it pass you by.”
Telematics data can help customers
steer clear of situations that might be
risks for them and for the insurer.
“We price insurance based on the
past, but telematics brings the past so
much closer to us,” says Fowler. “It’s not
four or five months in the past, but four
or five minutes.”
Going forward, Conlon sees more
insurers using risk- and claims-related
scores but also using different scores
for determining whether they need to
do a premium audit to determine the
likelihood of a positive action. Examples
of this involve sending a representative
onsite as opposed to accepting a report
over the phone.
Additionally, carriers are extending
predictive models to determine which
claims are candidates for subrogation or
litigation—and if they are, what claims
are prospects for settlement. The other
area Novarica has learned involves
insurers just starting to use predictive
models to manage workflow and task
assignments to become a more efficient
organization. That includes using models
that score a claim to determine which
adjuster should adjudicate the claim,
using a risk score to determine which
adjuster to assign it to, or determine the
workflow for that particular submission.
“It’s not just quantifying characteristics of the risks or claims, but using
models to manage the work process
and the assignment of tasks and
hopefully contributing to better underwriting and more efficient internal
operations,” says Conlon.
Overwhelming
“I’m sure you’ve heard the cliché that in-
surance is data rich and information poor,”
says Edwards. “We have all this data and
we can’t make heads or tails of it.”
“One of the perils of a business
intelligence project is you put the project
together and at the end of the day you
have reports,” he says. “It became a re-
porting project. What are the questions
I’m asking around decisions I need to
make to drive my business?”
When you ask the questions you
need all the data points and then it
becomes a technology issue to assemble
them. Insurers often lack people on the
business side that ask questions and are
looking for new data to evaluate the
most effective agents and why.
“The last piece is important,” says
Fowler. “You can look at hit ratios and
retention rates, but what is it about their
business, some homogeneity around the
way they do things, that makes them
successful. Someone has to ask that
question. It can’t be driven by IT.” ITA
“You can look
at hit ratios and
retention rates, but
what is it about
their business . . .
that makes them
successful.”
Miguel Edwards
Allstate Ivantage Select
