What Do You Think?
The amount of data available to insurance carriers today should offer better insight
into their customers.
We are living in a data-rich world and it is getting bigger by the moment. The barrage of data sources continues
at an unfettered pace thanks to the Internet of Things and the telematics solutions that continue to grow in
popularity. Finding a way to use all this data is another problem, though, and insurers are losing out on a great
opportunity if they don’t tackle the issue. How best to do that? We asked three leading insurance industry
consultants for their opinions. Participating in this month’s feature are Bill Jenkins, co-founder of Agile Insurance
Analytics; Donald Light, director, North America property/casualty practice for Celent; and Jeff Goldberg, senior
vice president of research and consulting at Novarica.
This month’s question:
With the amount of data supplied and available through the Internet of Things
and telematics devices, should insurers have a clearer vision of their customers?
Agile Insurance Analytics
The ability for
any company to
compete is to have
good insight into
those who use and
need the com-
and services. Such
many benefits inclusive of product
development, marketing, pricing, as well
as understanding which customers are
profitable, which are not, and why. Since
understanding and predicting custom-
er behaviors are the essence of the
insurance business, these insights are
particularly important for the industry.
It’s true the Io T and
telematics can and
will provide insurers
with a great deal of
new and potentially
valuable data about
prospects and poli-
cyholders. This data
can be the starting
point for understanding customers’ be-
havior, their exposures to a variety of risks,
and the likelihood of losses.
ogies of interest to
insurers include a
stream of complex
data about poli-
no question the
insurance of the
this growth—will include a focus on risk
mitigation and risk indemnification.
Achieving this better understanding
has important implications for product
design, pricing, distribution, underwriting, service, and claims management.
Data analysis will help policyholders
become better drivers, prevent leaks
from becoming major incidents, and
avoid other risks. It’s an opportunity for
insurers to build relationships that go
beyond billing and claims.
Having a customer-centric, “outside-in”
view provides a carrier with the ability
to create the right solutions and services
in a personalized and customized way. It
also brings together the narrow elements
of personalized risk management advice
and insurance coverage for an individual
rather than the insurer promoting a generic product onto its customer base.
However, the journey from data to
insights to action has many steps.
These steps include many decisions.
What kinds of data should be collected
(e.g. Are security and safety systems in
operation; When is the house occupied;
Many insurers don’t have the kind of
direct communication with their policyholders to act as a trusted data partner.
How much energy is consumed)? How
should the data be analyzed (e.g. Data
scientists using analytic software, ma-
chines learning or both?). Which insights
are valuable enough to be inserted into
workflow? And which tools will be most
effective for ensuring consistent execution
Instead, some large agents and brokers
may see this as an opportunity to provide
new value to their customers as the on-
line direct market cuts into their business.
Personalized information enables
carriers to connect customers in a more
proactive and trusted way. These are
factors customers increasingly expect in
today’s data driven world.
(e.g. guidelines, embeded rules, bots)?
The journey is just beginning.
In other cases, third-party data and
technology companies will own the relationship, pushing insurers to a smaller
position in consumer engagement. Insurers need to understand where they want
to be and how to position themselves to
make best use of this data in the future.