Insurers still looking at data in ‘monolithic way’

Many insurers are looking at data in a very ”monolithic way” despite its use becoming more important in insurance.

That was according to Paul Williams, chief executive of Ripe Thinking, who felt firms doing this were missing an opportunity to improve underwriting processes.

And he noted that businesses which were not keeping pace will eventually put a rate rise through their books due to “hoovering the wrong sorts of customers”.

“If you have data science in your business and start to get under the skin of that, you can make big changes to your underwriting result,” Williams said during the Insurtech Insights Europe conference in March.

”What will happen is that players who are not doing that will start hoovering the risks that are more prevalent in claims and the underwriting deteriorates over time.”

SME

This came after Vipr chief executive Paul Templar told Insurance Times  that with there being “more and more data” now available to underwriters, there was more focus being given to the analytics of that data and using it to improve the book.

Philip Thorn, managing director of digital and SME at Aon UK, said data driven underwriting was a “key opportunity” for insurers where SMEs were concerned.

“There’s a huge amount of inefficiency in a lot of the processes, for me that’s the biggest opportunity,” he said.

”A lot of people are not making money dealing with SME clients, so the opportunity to segment down and then automate more of the business through technology systems – that’s huge.

”There are some interesting startups helping insurers automate the majority of that process.”

AI

Meanwhile, Kanika Chaganty, chief data officer at Brit Insurance, added that ”the world was rapidly moving from data driven to artificial intelligence driven”.

AI has become a trend that is here to stay in the insurance industry, with more firms starting to explore its uses.

For example, insurer Zurich said it was experimenting with ChatGPT earlier this year (27 March 2023) as it looked at how it could use AI technology for tasks such as extracting data for claims and modelling.

“What these technologies do is give organisations the ability to connect data points faster,” Chaganty said.

”It helps organisations to understand insights or create predictions.”