The future of insurance – a brave new world

resonateTechnology is already shaping the future of insurance from autonomous vehicles and advanced driver assistance systems (ADAS), to inter-connected homes, artificial intelligence (AI) and machine learning.

One of the biggest challenges the insurance industry faces is adapting to this brave new world and maximising the opportunities that the new technology creates. Established insurers face a huge threat from agile start-ups able to better harness the new technologies. Some of the new ‘tech’ may or may not live up to the billing and some will be certain to drive rapid change. Data and analytics, what we collect and how we extract value from the data, is one area already in motion.

The big data challenge
Big data technologies and analytics are making it easier for organisations to capture large datasets but many still struggle to generate meaningful insights from the vast amount of data.  The challenge is to convert the data into meaningful information and then connect it with and across datasets in a way that enables enrichment and deep insight.

Deep risk insights
In terms of risk management, where insurers are seeing the real value is using data and analytics to gain a deeper insight which allows for better, more profitable decision making. Using artificial intelligence and machine learning, patterns and trends can be identified that would otherwise have stayed hidden.  Technologies around data have emerged to handle the exponentially growing volumes, improve velocity to support real-time analytics, and integrate a greater variety of internal and external data. Twenty years ago, many insurers couldn’t even rate a risk by postcode, particularly those distributing through brokers, due to legacy systems and IT restrictions. Now, pricing can be based on data relating to the specific individual in real time. Personalised pricing has allowed insurers to be more targeted in the selection of customers, to proactively cross and up-sell and to target opportunities in new segments or markets with confidence.

Why the hype surrounding AI?
Machine learning techniques such as neural networks have been around for a long time and were in use in the industry during the 1990’s for predictive analytics, so what’s changed?  There are three main factors; firstly, computing power has significantly improved.  According to Moore’s law, computing power effectively doubles every couple of years.  This means that algorithms are now able to crunch much more data within timescales that were previously out of reach.  Secondly, the volume, availability, and granularity of data has also radically improved.   Thirdly, the efficiency and capability of the algorithms embedded deep within neural networks have also markedly improved. These three factors combined have resulted in these types of techniques coming more into focus recently for applications within insurance.

Insurers have been using AI technologies to improve their efficiency and speed up internal operations in terms of automating processes for claims and underwriting.  AI and neural networks can also be employed to help gain a deeper insight and to differentiate risk in a much more granular way.

Business Insight has developed its own AI platform called ‘Perspective’. It is a neural network that can take large volumes of records across many variables as data feeds before iteratively learning from the data, uncovering hidden patterns and forming an optimal solution. The software can take a vast number of input data points and hundreds of corresponding risk factors per case before constructing a more accurate estimate of risk and offering significant improvements in predictive accuracy compared to statistical data models.

Changing customer needs
Behavioural analytics and advanced data analysis can also help insurance companies gain a deeper understanding of their customer base for the development of personalised products and solutions.

Millennials, having grown up with smartphones and being used to digital interactions, want the ability to compare products quickly and easily and find value for money at the click of a button. They want the product best suited to them and their lifestyle and these are the things they are looking for from an insurer.  This is where data and technology will need to be harnessed effectively by insurers to create products for the next generation of customers. It is this need to adapt and evolve to match customer requirements and buying preferences that has led Aviva to recently launch their ‘Ask it Never’ initiative.  Aimed at Millennials, the idea is to eliminate the need for applicants to have to spend time answering lengthy questionnaires by pre-populating the fields using big data to streamline the application process, saving the customer time and making the service more efficient.

Agility and change need to be embraced by traditional insurers otherwise some may end up going the same way as Kodak, a market leading company that resisted change and saw its market share fall off a cliff when digital photography came along.

Location Matters – the next step forward for underwriting UK property insurance

The increasing challenges faced by insurers include driving business growth in a highly competitive market and ensuring customer loyalty.  Remaining competitive involves optimising underwriting performance, an in-depth understanding of exposure to risk and more accurate pricing. What if there was a tool that could help you do all this?

Location Matters© is Business Insight’s new powerful visualisation and risk mapping tool that gives insurers a unique real time view of perils risk exposure by location.   Using the latest mapping technology, it is an extremely powerful visualisation and decision tool, combining market leading property risk models and demographic data into a single, easy to use, affordable system.

Through interactive maps displaying property location, risk, perils, policies and claims data, Location Matters© is designed to help insurers with underwriting decisions at point-of -sale as well as accumulation and exposure management.

Property risk is dependent on a range of factors linked to location; including the local environment, the types and construction of buildings, local crime rates, the demographic make-up of the area and physical hazards such as flooding or storm. By viewing and analysing customers against hazard data by location, underwriters and pricing analysts are able to have a deeper understanding of risk exposure, have insight into accumulations of risk across their entire book of business and as a result, more profitable risk selection.

Location Matters© is the next step forward for underwriting UK property insurance.  It brings together the best of breed perils and geodemographic data to visualise risk at property level and allows an underwriter to log-in to a web browser from any location and interrogate a postcode (or address) to gain a deeper understanding of geographic risk and the make-up of the local area.

Being able to visualise risk at such a granular level provides a greater insight and accuracy for underwriters but also helps strengthen your market position with a more in-depth view of the risk price as you write the business.

The risk mapping software also has a number of other benefits.  For marketing departments, these include having an accurate and in-depth understanding of their target market to generate new pipelines and a clearer view of where to focus their marketing campaigns.  For claims departments, it can be used to assess the validity of individual claims and also to prioritize claims handling resources which in turn helps to strengthen customer loyalty by focusing efforts on legitimate claims and improving the customer retention rate.

Location Matters© – for a more profitable risk selection and greater exposure management.

Find out more here

Plum Underwriting select Business Insight’s risk mapping software to enhance its risk selection

plum logoInsurance technology provider Business Insight announces that Plum Underwriting, the specialist and non-standard household insurance managing general agent, which is part of Global Risk Partners Limited (GRP), has chosen their newly launched risk mapping tool Location Matters© and geographic classification model ‘RESONATE© to enhance its risk selection and customer analytics capabilities.

Read press release here: Press release 12 April 2016 Plum Underwriting

Leveraging the value of Big Data

big data square.jpgIt is claimed that 90% of all data in the world has been created in the last two years. Companies are switching on to the strategic and commercial value of harnessing this data.  A recent IBM survey (October 2015) found that 74% of insurance companies report that using big data and analytics is creating a competitive advantage for their organisations.

One way to maintain that competitive edge is by leveraging and maximising the use of big data. With much better access to data from a wide variety of sources, Insurers are able to gain new insights now into risk at a highly granular level.  Data can be used to spot and analyse trends, uncover new patterns and anomalies and identify, measure and manage risk exposure. This information can then be used by Insurers to gain a comprehensive understanding of markets, customers, products, distribution channels and competitors.

The Business Insight team has extensive big data experience and provides insurers with tools to address key business challenges such as business growth and benchmarking products and position in the market.  Our market leading products support quote enrichment, risk selection and claims validation such as ‘Location Matters©‘, one of our most recent solutions that combines geographic risk mapping and analytics with highly granular lifestyle, demographic and perils data to provide powerful new insights. The software combines state-of-the-art risk mapping technology with a complete set of highly granular perils models including best of breed data from Business Insight and partner suppliers from across the industry.

Please contact the team at Business Insight for a demonstration on 01926 421408.