How Insurers Can Leverage New, Unconventional Technologies and Insights to Improve Loss Ratio

Ham believes that new behavioral insights offer insurers a critical tool to enhance risk assessment and loss ratios. “Insurers can leverage new and unconventional behavioral insights by performing better, more thorough risk assessment,” he explained. These insights provide an additional layer of understanding that complements traditional factors used in risk evaluation. With the inclusion of behavioral insights, carriers get “a factor that to date they haven’t had access to,” offering a fuller picture of the risk profile. This allows them to make more informed and profitable decisions.

How Carriers Can Integrate Behavioral Intelligence Into Existing Risk Mitigation Strategy

Carriers can integrate behavioral intelligence into their risk mitigation strategies at multiple points in the insurance value chain, according to Ham. By using behavioral insights, they can target individuals whose profiles align with their risk appetite, tailoring risk selection from the outset. “It goes down the insurance value chain, where they can dictate the buying journeys based on these new insights,” Ham explained. Additionally, carriers can use behavioral intelligence to develop renewal strategies, allowing for a more dynamic approach to risk management.

Using Behavioral Insights to Help Carriers Achieve Goals of Equity and Fairness

Behavioral insights can play a pivotal role in helping carriers meet goals of equity and fairness. “By getting that complete picture, we have to recognize the uniqueness of individuals, and behavioral insights are exactly that they’re telling the carrier unique insights about that individual, so they don’t have to bucket them or ban them, ” said Ham. He explained that by understanding individuals on a more personal level, carriers can avoid the unintended exclusion of certain groups, ensuring a more inclusive approach to underwriting and risk management. “It’s not based on banking, so you’re getting insights that are more inclusive of individuals, as opposed to those that may unintentionally exclude some.”

About Pinpoint Predictive, Inc.

Ham described Pinpoint Predictive as “the ultimate risk selection platform.” He elaborated, “Pinpoint Predictive leverages machine learning and these new unconventional behavioral insights to deliver unparalleled precision in underwriting and actuarial decisions. The company’s platform addresses not only profitability for insurers but also improves the overall customer experience and provides agents with better tools to represent carriers effectively. “For me, Pinpoint is that ultimate risk selection platform that allows everybody to win.”

Learn more at pinpoint.ai.

To view the full interview with Scott Ham, click on the video above.

The post Enhancing Risk Mitigation with Behavioral Intelligence first appeared on AAIS.

The foundation of any property & casualty (P&C) insurance carrier rests on two main pillars: financial performance and operational effectiveness. To ensure sustainable and profitable growth, carriers need to closely monitor several key metrics that measure their ability to manage risk, optimize operations, and satisfy customer demands. These are important performance measures that can be categorized into two main themes: (a) Profitability & Risk Management and (b) Operational Efficiency & Customer Satisfaction. In this blog, we will dive into significant key performance indicators (KPIs) under each theme.

Profitability & Risk Management

Maintaining profitability while effectively managing risk is crucial to a carrier’s financial stability and long-term sustainability. These factors provide a clear picture of a carrier’s ability to price premiums appropriately, control expenses, and manage claims – all essential for ensuring a stable balance between risk exposure and financial returns. By closely monitoring these KPIs, carriers can gauge the effectiveness of their underwriting strategies, improve their capital management, and enhance their overall resilience against unexpected losses. Below are several critical metrics that guide carriers in making data-driven decisions to sustain growth and stability:

• Loss Ratio measures the proportion of premiums paid out in claims, calculated as incurred losses divided by earned premiums. A lower loss ratio indicates better profitability because fewer losses are incurred compared to premiums earned. The loss ratio can be measured for each line of business, such as Homeowners or Commercial Liability line, or aggregated for all products combined.
• Expense Ratio refers to the insurer’s operational expenses as a proportion of premiums earned. A lower expense ratio will denote that more efficiency and profitability exist in managing insurance operations.
• Combined Ratio is the sum of the loss ratio and the expense ratio, providing a comprehensive view of overall profitability. A combined ratio below 100% indicates an underwriting profit, while a ratio above 100% indicates a loss.

• Operating Ratio adds the combined ratio to the investment income ratio, offering a complete view of profitability. A low operating ratio indicates that the company is performing well in both underwriting and investment operations.
• Retention Ratio is the percentage of policies an insurer retains at the time of renewal. A high retention ratio indicates customer satisfaction and reduces the acquisition costs for new customers.
• Risk-Based Capital (RBC) Ratio measures the adequacy of the carrier’s capital against its risks. A high RBC ratio indicates financial stability in the face of unexpected losses.
• Return on Equity (ROE) is a profitability measure that shows how effectively an insurer uses shareholder equity toward the generation of profits. The higher the ROE, the greater the indication of strong financial performance and efficient use of capital.
• Investment Yield is the return an insurer generates from its investment portfolio as a percent of invested assets. The overall profitability is enhanced with a higher investment yield in a low-loss or low-expense environment.

Operational Efficiency & Customer Satisfaction

Operational efficiency and customer satisfaction are complementary metrics for insurance carriers. Efficient processes and great customer service continue to be the key link in the retention of policyholders for the sustainability of their business and, therefore, their competitiveness. A smooth claims process decreases operating costs while also increasing customer trust and loyalty. The following metrics help carriers manage costs while keeping policyholders satisfied:

• Time to Issue Policy measures the time it takes to issue a policy from the receipt of an application, including the time for quoting and revisions. Faster issuance times reflect higher operational efficiencies and improved customer satisfaction.
• First-Contact Resolution (FCR) shows the number of resolutions provided during the first contact with a customer. A higher FCR suggests that customer support processes are effective, resulting in greater customer satisfaction and loyalty.
• Customer Retention Rate measures the percentage of customers renewing their policies. A high retention rate means satisfactory service and a loyal clientele, reducing the need for costly customer replacements.
• Net Promoter Score (NPS) quantifies how willing customers are to recommend one insurer over others. A high NPS reflects positive customer experiences and brand loyalty, which translates into increased growth through word-of-mouth.
• Claims Processing Time is the average time taken for the processing and settling of any claim. Faster processing of claims leads to greater customer satisfaction with quicker problem resolution.
• Automation Rate measures the number of operations automated or the operational times that are automated compared to those performed manually. A higher automation rate means there was a greater utilization of technology for the operational efficiency, which results in fewer errors.
• Customer Lifetime Value (CLTV) is a fundamental metric that determines the total revenue an insurer can expect from a customer over the course of their relationship. A higher CLTV demonstrates good retention and satisfied customers, providing long-term financial benefits to the carrier.
• System Uptime measures the proportion of time that a carrier’s policy administrative system (PAS) or claims processing system are operational and available to employees and customers. Higher uptimes ensure smooth functionality and minimize customer frustration due to downtime or technical issues.

The Positive Impact of KPIs for Securing Reinsurance

To attract a reinsurance carrier, it is crucial to demonstrate financial stability and sound risk management. This can be done by sharing key metrics like loss ratio and combined ratio, which show that the carrier is handling claims smartly and staying profitable.

Highlighting capital reserves and solvency ratios also proves that the carrier has sufficient funds to cover unexpected claims. Sharing how a carrier assesses risks, like with catastrophe models or portfolio diversification, helps reassure the reinsurer that the carrier is minimizing big losses.

On top of that, demonstrating a carrier’s operational efficiency – such as how fast and accurately they process claim – and their use of technologies like automation to streamline processes is always beneficial when engaging with a reinsurer. Demonstrating strong underwriting practices, low policy lapses, and positive experiences with other reinsurers can strengthen trust. Compliance data, audit reports, and a focus on operational efficiency further establish the carrier as a reliable partner.

Improving Employee Culture Through Transparent KPIs

Having transparent KPIs leads to a higher morale and a healthier work environment because when an insurance carrier operates on consistent and routine KPIs, employees have a more profound understanding of what is expected from them and how their performance is contributing to overall company goals. This clarity reduces unnecessary confusion and tension that could lead to frustration. Employees feel more in control when they can monitor their own activities and see real improvements in those areas. The acknowledgment of good performance through KPIs also serves as a motivator since employees feel their efforts are valued. Ultimately, a metrics-driven culture inspires growth, support, and teamwork at all levels, building a more positive atmosphere in the workplace.

Getting the Data to Measure KPIs

Proper reporting of KPIs requires data from a wide range of sources, both internal and external. Claims management systems should be considered the most significant source because they retain all the key information on claims frequency, claims severity, and processing times, all of which are critical for assessing operational efficiency and customer satisfaction. Underwriting systems provide information on policy lapse and renewal rates, as well as their profitability, hence enabling the assessment of underwriting performance. Financial reports are another vital source, as they contain data on loss ratios, expense ratios, combined ratios, and ROE, which are all crucial determinants of profitability and risk management. Customer Relationship Management (CRM) systems house a treasury of customer data, including retention rates and NPS for the measurement of customer satisfaction and loyalty.

Some operational KPIs to consider include Time to Issue Policy and Automation Rate. These can be tracked in workflow management internal systems and IT operations-handling systems. To gather both quantitative measures of satisfaction and qualitative insights into engagement, employee and customer feedback can be collected through surveys. Additionally, audit reports and regulatory filings are other important sources, but must comply with industry standards. Benchmarking against external market data can provide an opportunity to measure performance against industry peers, track market share, and assess customer acquisition costs. Utilizing these various data sources allows an insurance carrier to monitor and enhance its performance in a holistic and informed way.

Once data sources are identified, pulling data on a regular basis, calculating KPIs, and displaying them on dashboards is vital to keep both the dashboards and the company dynamic and responsive.

Conclusion

Effective insurance carrier dashboards are all about transforming large chunks of data into meaningful insights that can be acted upon. If they focus on the right KPIs, integrate reliable sources of data, and leverage user-friendly business intelligence tools, carriers will have deeper insights into their operations. Interactive, well-designed, automatically updated dashboards can provide real-time feedback related to underwriting performance, claims processing, and customer satisfaction. This helps carriers make informed decisions toward better efficiency, profitability, and risk management.

When tested and validated, these dashboards become powerful tools that enable teams at all levels to better monitor performance against objectives and identify opportunities for improvement. More importantly, these data visualizations enhance transparency and foster a data-driven culture within the organization. Investing in high-quality dashboard creation leads to better decision-making, increased operational efficiency, and a stronger competitive position in the insurance industry.

Tracking and Leveraging KPIs with Apoorva Insurance

Apoorva Insurance provides affordable products and services in the P&C insurance industry. With 80+ employees, Apoorva services AAIS Members for all lines of business. Apoorva migrates carriers and MGAs from other rating bureaus to AAIS’s forms and manuals. Learn more about how Apoorva Insurance can support your business at Apoorvainsurance.com.

The post KPIs to Improve P&C Insurer Profitability and Risk Management first appeared on AAIS.

The Evolving Landscape of Homeowners Insurance

The homeowners insurance market is under intense pressure due to a combination of factors:

• Population Shifts and Real Estate Development: Growing populations and new developments in high-risk regions exacerbate underwriting difficulties.
• Unpredictable Weather: Increased frequency and severity of weather-related events make risk prediction more complex.
• Market Disruptions: Factors like social inflation, macroeconomic pressures, rapid innovation demands, and heightened competition are intensifying the strain on insurers. Litigation management costs surged 19% from 2018 to 2023 for the combined P&C sector, reflecting an approximate $24 billion loss adjustment expense (LAE).

These issues are compounded by a surge in consumer insurance shopping, a rise in higher-risk policies, and an increase in long-time policyholders switching carriers. Insurers are forced to make tough choices, such as raising premiums, exiting markets, or discontinuing certain coverage lines. These pressures are preventing the industry from achieving necessary positive outcomes critical for future profitability.

The Burden on Underwriters

Amid the ongoing market uncertainty, underwriters particularly are facing significant challenges:

• Overwhelming Submission Volume: An influx of submissions strains underwriting resources.
• Inaccurate Risk Prediction: Traditional methods based on demographic data and zip codes are proving to be inadequate, necessitating more precise risk assessment tools.
• Data Quality Issues: Poor-quality or unstructured data and manual processes further complicate risk assessment.

Underwriters are questioning why the process is so burdensome and how it can be alleviated. The crux of the issue is underwriting profitability, crucial for maintaining healthy bottom-line results. Fortunately, there are modern solutions to address these goals.

Modernize Risk Assessments with Behavioral Predictions

Traditional underwriting relies heavily on demographic data and location. Enhanced risk assessment goes beyond traditional methods such as ZIP Codes and credit scores by incorporating individual behavior and decision-making patterns.

Underwriters today can access a wealth of data outside traditional risk variables to deepen the understanding of their policyholder’s risk profile. By utilizing AI-powered behavioral predictions, which incorporate information about consumer activity, interests, buying choices, etc., underwriters can more accurately predict outcomes relevant to insurance underwriting performance.

To remain competitive, insurers must invest in this digital transformation and reduce reliance on complex, manual processes. In fact, a McKinsey analysis found that the most successful carriers are those leveraging the latest technologies to optimize underwriting capabilities. Enhanced approaches for success involve adding:

• Comprehensive Risk Profiles: A detailed view of prospective and existing policyholders to start transforming underwriting workflow.
• AI and Person-Level Insights: Using AI to access powerful person-level insights about customers and their individual risk propensities, which directly impact underwriting profitability.

Leveraging Behavioral Predictions Across the Insurance Value Chain

Using behavioral intelligence represents a transformative shift in insurance underwriting. By incorporating policyholder behaviors into risk evaluation, insurers gain a deeper understanding of risk profiles and individual customer nuances, leading to a more customer-centric approach to coverage. This intelligence offers specific predictions that enhance risk assessment:

• Identifying policyholders with a high propensity to seek an attorney at first notice of loss (FNOL) or a likelihood to litigate.

• Predicting claims frequency and severity for current policyholders and prospective customers.

• Assessing the likelihood of non-payment or early cancellation.
• Determining which prospects are most likely to convert to new customers and predicting their lifetime value.

When insurers identify policyholders with a higher propensity for risk, they can proactively manage these policies more precisely using unique identifiers. Meanwhile, they can handle other policies based on different qualifiers that indicate varying levels of risk. This becomes a game-changer for insurers’ ability to predict and review for underwriting.

Empowering Underwriters

Underwriters are tasked with building profitable books with targeted risk profiles. To be successful, they need to make quick, effective, and accurate assessments of the profitability of each policyholder. However, they are often working with limited or convoluted information and are under considerable time constraints.

Utilizing person-level intelligence in underwriting allows underwriters to focus their craft and expertise on the most complex risks. By integrating person-level intelligence, insurers can:

• Identify High-Risk Insureds Early: Early identification of high-risk individuals allows underwriters to focus on the most complex cases, improving resource allocation.
• Improve Efficiency: With simply using a name and address, significant risk insights can be obtained in seconds.
• Enhance Risk Handling: Focus on complex cases while automating the handling of low-risk applications, improving overall workflow efficiency.
• Provide Personalized Service: Offer coverage tailored to individual risk profiles, moving beyond traditional factors like location and credit scores.

Future-Proofing Insurance Underwriting

For P&C insurers, integrating person-level intelligence into underwriting processes offers a more precise and complete view of the policyholder risk profile. This approach helps insurers better prepare for uncertainty, respond to market volatility, avoid adverse selection, and achieve profitable, sustainable growth. These AI-powered behavioral predictions empower insurers to:

• Predict and Manage Risks More Accurately: Identify high-risk individuals earlier and adjust policies accordingly.
• Enhance Customer Understanding: Gain insights into customer behavior, such as propensity to litigate or likelihood of early cancellation, improving risk management strategies.
• Improve Underwriting Profitability: Achieve more accurate risk assessment and better manage underwriting resources, contributing to healthier bottom-line profitability and sustainable growth.

Using Advanced AI Risk Assessment with Pinpoint Predictive

A more comprehensive and inclusive risk assessment requires a deep understanding of the individual behind the policy, as well as incorporating insights into an insurer’s decision-making processes as part of risk analysis.

Pinpoint Predictive empowers underwriters by enabling them to make smarter, more equitable assessments of risk, accurately identifying high-risk and low-risk individuals. This enhanced accuracy in underwriting workflows helps insurers better serve their customers by identifying and quantifying individual risk earlier and more accurately.

By bridging the gap between the most powerful behavioral predictions made by the world’s leading tech companies and the specialized requirements of the insurance industry, Pinpoint is delivering unmatched risk-selection capabilities at various points along the insurance value chain.

Conclusion

The homeowners insurance sector faces unprecedented challenges. Behavioral intelligence, centered on individuals, represents the next generation of technology, transforming policyholder risk assessments and offering insights into future customer risks. As the industry adapts to these new technologies, the focus will shift toward more informed, efficient, and customer-centric underwriting practices, paving the way for a more resilient and profitable insurance market. Insurers that integrate these advanced risk assessment tools and insights will ultimately be the most successful in enhancing their underwriting processes, addressing the evolving risks associated with new developments and weather events, and ultimately improving financial outcomes.

Improve your Underwriting Outcomes with Pinpoint

With predictions available earlier and more accurately than any other risk solution on the market, Pinpoint is transforming the P&C insurance industry and helping underwriters drive better outcomes with an AI-powered, real-time solution for precise risk selection. For more information about how Pinpoint can help you, visit www.pinpoint.ai or contact info@pinpoint.ai.

The post Addressing Homeowners Underwriting with Behavioral Risk Predictions first appeared on AAIS.

Following the success of this model, several fire departments across North America began to develop similar mitigation strategies that were focused, coordinated, and ultimately effective in reducing fire and other emergency incidents in their communities. Surrey Fire Service in British Columbia, Canada used similar principles to reduce fire incidents by 80% in a 12-year period[iii], and Kankakee Fire Department in Illinois reduced fires in their focus area by 40% over several years[iv]. So, it raises the question, why doesn’t every local fire department embrace CRR if it promises such significant potential reductions in losses?

Have We Created a Moral Hazard by Incentivizing the Wrong Things?

A large part of the answer to that question rests in the fact that most of what we measure, and thus incentivize fire departments to focus on, tends to be response oriented. What has been missing from this equation for far too long is any meaningful evaluation of how good of a job our communities and the fire departments that protect them are doing in terms of reducing risk, not just responding to it. Frankly, it is far easier for fire departments to largely ignore proactive risk mitigation strategies and take a more reactive suppression-focused approach. Doing “the right thing” in terms of executing effective CRR programs takes time, effort, passion, and money.

There is little if any incentive for fire departments to take this CRR paradigm shift seriously. To put it in more stark terms, we have created a Moral Hazard where we inadvertently reward all of the wrong things, and thus we should not be surprised that CRR efforts are given short shrift. So, to answer the question of “Why don’t more fire departments embrace CRR?”, it is because the way we grade and evaluate fire departments doesn’t meaningfully evaluate CRR. For CRR to become more than just the “right thing to do,” we need to put CRR front and center in how we evaluate public fire protection…and that’s exactly what AAIS is doing.

AAIS’s Role: FLAMES

Each community is different, faces different risks, and needs different interventions. Yet, it is challenging to develop a standardized and consistent way to objectively measure how well a community is doing in terms of understanding its various risks, developing meaningful strategies to reduce those risks, and measuring the effectiveness of their efforts, at scale. AAIS has developed a novel approach to rating modern public fire protection called FLAMES (Fire Loss and Mitigation Evaluation Score). FLAMES challenges the legacy assumptions that limit modern insurers’ ability to accurately select and price risk by turning the focus from counting response equipment to evaluating mitigation effectiveness.

Building upon this existing filed approach, AAIS is expanding and enhancing its fire loss model countrywide to give insurers a more granular and accurate understanding of fire losses. AAIS is also developing an innovative methodology for evaluating local mitigation efforts where they are the most effective: at the local level. This approach will provide insurers and communities with important insights about the effectiveness of local mitigation programs and services in a market constantly disrupted by ever-increasing losses.

To learn more about what’s to come with the FLAMES initiative, visit AAISonline.com or contact an AAIS Engagement Manager.

[i] British fire services classify fires as either primary fires, the most severe, or secondary fires, which pose less immediate risk to life or property. They also break out dwellings fires out of the wider statistics about primary fires. These statistics were compiled from data publicized by the British Home Office.

[ii] NFPA annually compiles national fire loss estimates.

[iii] The Surrey Fire Service – HomeSafe program has been evaluated to determine the efficacy of the program.

[iv] The American Red Cross conducted an evaluation of its smoke alarm installation program partnership with the Kankakee Fire Department.

The post Community Risk Reduction: A Paradigm Changing Public Fire Protection first appeared on AAIS.

Catastrophes, higher building costs, and inflation are all impacting commercial underwriting performance and insurer profitability. Proper portfolio valuation is becoming exponentially important as the reinsurance market tightens. So, how can insurance companies better manage their books of business now and into an uncertain future? The answer is rooted in addressing valuation issues by tapping third-party vendors. The answer is tied to partnering with a robust digital platform provider. The answer is collaboration.

In the past, it was easy for insurers to dismiss data as untrustworthy because they didn’t want to invest in it. Now, third-party vendors present necessary advances that help to paint the bigger picture. Platforms like OneShield are the glue that brings these tools together. And, not just for underwriting purposes. In the commercial lines business, customers are generally good risk management partners. OneShield and its customers have seen tremendous engagement with agents and policyholders who want to proactively manage risk. Failing to enable that is a missed opportunity.

Undervaluation Issues

One critical issue plaguing the commercial property insurance sector is undervaluation. Many insured properties are not accurately valued, leading to potential discrepancies when claims occur. This issue is exacerbated by the changing climate, which has expanded the geographic reach of natural disasters.

The Tightening Reinsurance Market

A convergence of global events leading into 2023 resulted in the hardest property-catastrophe reinsurance market in generations. Tightening reinsurance capacity puts pressure on carriers and raises both portfolio-level and granular questions. Commercial insurers are digging into the vulnerabilities and susceptibilities of individual properties.

Beyond Underwriting

A crucial takeaway from a past webinar with OneShield and AAIS was the need for insurers to go beyond traditional underwriting practices to effectively manage a book of business into the future.

We emphasized the value of using data not only for new business but also for existing clients. The webinar showcased how third-party data and insights enhance insurers’ risk management capabilities. Platforms like OneShield act as central hubs that connect these data-driven tools, enabling insurers to engage with agents and policyholders for proactive risk management.

The Path Forward

To remain competitive in the ever-changing commercial insurance space, carriers will need to continue to embrace change along with the unknown, adopting new technology and tools along with data-driven processes to improve loss ratios and customer satisfaction. Each carrier’s path forward is different. What matters most is they begin taking steps to implement new tools and data into their processes that improve loss ratios and customer satisfaction.

About OneShield

OneShield Software provides business solutions for P&C insurers and MGAs of all sizes. OneShield’s cloud-based and SaaS platforms include enterprise-level policy management, billing, claims, rating, relationship management, product configuration, business intelligence, and smart analytics.

Designed specifically for personal, commercial, and specialty insurance, our solutions support over 90 lines of business. OneShield’s clients, some of the world’s leading insurers, benefit from optimized workflows, pre-built content, seamless upgrades, collaborative implementations, and pricing models designed to lower the total cost of ownership. Our global footprint includes corporate headquarters in Marlborough, MA, with additional offices throughout India.

For more information, visit OneShield.com.

The post Commercial Property Preparedness: Bracing for Changing Risks first appeared on AAIS.

Trends in Commercial Property

Dunn started off the discussion by requesting overviews of what the panelist are currently seeing in the market. Coan explained that while inflation isn’t a new trend, COVID did have a larger effect than normal. One point that he likes to make clear, is that inflation is not one in the same. It is different regionally and by state. “Florida has a 7.14 average inflation rate across the state, but Fort Myers and Miami are both over nine,” Coan reported. “Fort Myers is over nine because of [Hurricane] Ian, and Miami is over nine because inflation is driven by the people who live [there].” When developing costs, Coan insisted that it is important to keep in mind regional costs all the way down to zip code and census block level. “When you’re underwriting, you need to understand that different regions are experiencing inflation and cost factors differently.”

Inflation is affecting every American and when it comes to the confluence of factors in the renewal books, Heine has noticed there tends to be a mismatch of pricing terms and conditions. “We’re urging our clients to take a good healthy look at the renewal book to make sure that they’re managing that risk,” he said. “When you’re adjusting values, you have to look at everything.”

Current Challenges and Actions Carriers Can Take to Address Them

Coan reported that more than 50% of homes are short to value. “These [catastrophic] losses all over the country have shown that no one has a book that’s a true value,” he emphasized. “Everyone thinks they have a book that’s insured to value, but you don’t. When you run books of business, you’re going to see the valuations of those books are more than 50% undervalued.” Coan admitted that this is a common problem, even more so on the commercial side. “They get looked at less often,” he stated, “and there’s less information that the carrier is getting from the broker or the agent to write those policies.”

Heine believes carriers are under great pressure due to the tightening capacity. “There are a lot more questions at the portfolio and individual property levels when it comes to the middle market and large commercial,” he said. “At that level of discipline, folks are able to show that they actually have a command over their book and a process to help manage that. Part of what we’re seeing is a gap in terms of what these folks are insuring for and what the reinsurers are looking at.”

In terms of action to help address these problems, Coan believes it starts with data and technology. “You need to have third-party data built in because you can’t have all the information on this risk,” he advised. “It has been proven that vendors like Betterview and e2Value can help adjust the data, dissect that data, and provide customers with really good information on these risks.” Coen stressed that it is important to take advantage of these advances in the marketplace. “If you’re not in a more digital world doing things like incorporating an API and pulling in real-time information so you can give a real-time solution, then you’re going to fall behind,” he claimed. “Everyone understands new technology, so the excuse that customers aren’t going to want to do that is not true. You need to bring in the right data to process your claims, your underwriting, and your submission policies.”

The Way Forward: Progress of Insurers & Technology/Data Working Together

The integration of new technology such as API has been helpful for companies like Betterview when it comes to strategy. “Resources are at a premium wherever you go and or customers were absorbing that,” Heine explained. “Now, it’s like someone flipped that discussion and we’ve decided to absorb that time, effort, and cost. Overall, technology has advanced the actual value of what folks can get over a period of time.”

While there may be some hesitancy to get involved with data and technology providers, especially from legacy carriers, Coan believes it will pay off in the long run. “It actually makes that traditional underwriting and claims process more robust because you’re able to filter out those risks that are functioning and priced correctly and focus more time on where your risk is really valuable,” he assured. “So, you’re not losing any of the traditional core values your company may have. You’re actually enhancing them.”

If you would like to view the presentation again in its entirety, please click the video above.

Questions? Please don’t hesitate to reach out to any of the featured speakers through the contact information below.

Stephanie Vasey

Product Manager of Commercial Lines and Inland Marine (AAIS)

stephaniev@aaisonline.com

John Dunn

Vice President (OneShield)

jdunn@oneshield.com

Jeff Heine

Chief Revenue Officer (Betterview)

jheine@betterview.com

Skip Coan

Vice President (e2Value, Inc.)

scoan@e2value.com

The post Webinar: Property Preparedness & Bracing for the Future of Commercial Insurance first appeared on AAIS.