2024 Executive Outlook | David Bowcott, NFP
David Bowcott, co-leader, NFP Construction & Infrastructure Group
As we enter 2024, signs exist the Canadian P&C insurance hard market is abating.
But clients are nevertheless putting in place measures they hope will sustain them through future hardening. We are beginning to see forward-looking organizations prepare their risk management strategies to harness the powers of an emerging category of risk controls — data architecture and technology.
On the data architecture front, several risk managers are planning for 2024 by adopting the growing knowledge base around data science and associated tools to make better risk management decisions. For example, traditional risk management information system (RMIS) platforms are being upgraded to better suit the needs of the specific industries served by the insurance sector. Within the construction sector, data structures used by RMIS platforms are incorporating more insightful data points. For instance, construction contractors are gathering claims data with a more standardized root cause of loss-naming protocol; plus, they are including data points that generate a better understanding of where their organizations’ biggest risks begin.
By investing in better data architecture and RMIS interfaces, progressive risk managers are grooming themselves to make more informed risk management decisions.
When it comes to technology, we continue to see an explosion of built environment technologies preventing some of the biggest risks the insurance industry faces. The term ‘built environment’ refers to human-produced spaces for human activity — i.e., buildings, parks, transportation infrastructure, etc. — and is often used in architecture, urban planning, public health and other sectors. The built environment digital twin — a virtual model designed to reflect a physical object accurately — continues to emerge and evolve to provide the modern-day risk manager access to what could be the greatest inventory of risk controls the industry has ever seen. As risk managers get their data houses in order, they will also need to prepare by harnessing the power of the various component parts of the digital twin to prevent and mitigate their biggest risks. These powerful component parts include the Internet of Things, reality capture, and project and asset management technology.
Together, these solutions will be foundational to allow risk managers to prepare and govern risk at levels previously unimagined. Also, adopting these data architecture and technology tools will enable insurance partners of those risk managers to tap into this massive repository of data. In turn, this enables insurers to measure their clients’ ability to manage the top risks that carriers see manifesting on the policies they issue, thus giving credits to those insureds that have the data to prove their abilities at managing risk.
