How do you make data work for your business?

How do you make data work for your business? | Insurance Business America

Insurance News

How do you make data work for your business?

An in-depth look at the role of data harnessing in 2024

Insurance News

By
Chris Davis

The ready availability of data in the insurance industry of today has been something of a gamechanger – fostering health competition and pushing further innovation across the globe. Speaking to IB, Christina Lucas (pictured), global industry advisory at Guidewire, said that for her it’s revolutionized how and where they do business.

“The availability of data has really leveled the playing field,” she said. “Carriers can create new products and services due to the transparency of information they now have.”

Initially, companies focused on reporting historic data trends – however, these practices have been turned on their heads.

“Ten years ago, the big thing was building forecasting models,” Lucas told IB. Today, the industry is characterized by sophisticated models leveraging business intelligence to drive data-driven business outcomes. This shift from two-dimensional Excel spreadsheets to advanced technologies like large language models and Generative AI represents a monumental leap.

“It’s fascinating to see how we now use multifaceted data to generate insights that guide decisions,” added Lucas.

And if anyone’s primed to see these trends as they emerge, it’s Lucas. As a speaker at IB’s upcoming Women In Insurance New York, her session Opportunity by numbers – Revealing data-driven industry insights will enhance your market understanding for informed business decision-making and help you gain valuable takeaways on:

Industry data revealing pain points and opportunities
An enhanced market understanding for informed business decisions
Insights and tools for navigating market conditions
A data-driven approach to address industry challenges

In the insurance sector, the integration of AI has similarly revolutionized the analysis of claims information, which traditionally contained vast amounts of data. According to research from Appinventiv, the market value of AI in the insurance sector is projected to reach US$35.77 billion by 2030 – with 77% of insurance professionals already in some stage of adopting AI into their firms in some capacity. And for underwriting, the induction of AI is acting as a catalyst for massive, sweeping innovation.

“Underwriting and claims used to be siloed, with minimal interaction between the two,” Lucas said. “The collaboration between underwriters and claims adjusters helps create tighter models based on emerging trends.”

‘It’s not just about having the data but ensuring it’s the data needed for future insights’

But it’s not just tech and data that’s changing the game – geopolitical events have also done their fair share in shaping the sector – in particular the global pandemic.

“COVID-19 brought business interruption to the forefront, challenging us to quantify its impact,” Lucas added. “We’re using data to understand supply chain logistics risk and agricultural risk, especially with climate change. Carriers are now open to creating data sets that can be shared and even monetized. Different entities can apply their technical expertise to the same data set, producing varied and innovative products.”

For insurance leaders, the key to leveraging data effectively lies in capturing the right data, sourcing it from third parties, and employing data-savvy talent.

“It’s not just about having the data but ensuring it’s the data needed for future insights,” Lucas said. “Telematics, for instance, provides valuable data points for understanding risk profiles. We need data-savvy people who can interpret data based on their industry insights.”

‘Insurance leaders must focus on capturing relevant data’

Looking ahead, Lucas identifies two major trends in data utilization within the insurance industry: tech enablement and market capabilities.

“Tech enablement includes real-time data inputs and cloud-based platforms essential for rapid decision-making,” she told IB. And, in terms of market capabilities, Lucas highlights the rise of cyber and incident response, climate modeling, and sustainability efforts.

“We’re seeing significant advancements in climate modeling and the use of blockchain in parametric insurance. Digital-forward solutions require platforms capable of handling real-time data, often based on cloud technology. Insurance leaders must focus on capturing relevant data, leveraging third-party sources, and nurturing data-savvy talent to stay ahead.”