Underwriters look to get the most out of digital data

The way insurers leverage technology to use data is key to deriving insights useful to underwriters, experts from New York Life, Swiss Re and EPAM said, in remarks at InsurTech NY’s Nov. 15 event focused on underwriting data. Artificial intelligence and machine learning (AI/ML) can clear the way for higher-order thought and insights, they added. 

Grant Donkervoet, analytics lead and vice president at Swiss Re

It can be challenging for reinsurers to determine how insurers are using data, said Grant Donkervoet, analytics lead and vice president at Swiss Re. “It’s very important for the primary carriers to really show they actually are getting the lift from utilization of technology for data, that they’re implementing it in the correct way, and also doing it in a way that’s actually benefiting them from a customer delivery perspective,” he said.

Life insurers, on the other hand, look at data within the context of risk, according to Rashad Haque, head of the program management office at New York Life. “Life in particular is more complex because an event takes place over decades, not right away,” he said. “The struggle is actually finding clean and usable data.”

As a result, life insurers take a risk-based approach, going step by step, at the same time as underwriters are classifying data and risk alongside a machine learning model, Haque added.

Lynn Rivenburgh, managing director, EPAM.

EPAM, the system software company, invested in augmented reality/virtual reality (AR/VR) systems for insurers to handle claims, and more, according to Lynn Rivenburg, managing director. “We’re bringing it to underwriting, using it from a risk management perspective and also using it for claim adjudication,” she said.

Insurers, however, aren’t ready to use AR/VR yet, according to Donkervoet. “The execution part of it, in the flat files, is still not being utilized to the full extent,” he said. “We’re still on a long journey and these new tools around AR and VR, they can be really helpful. But on the insurance side, I still think we’re a long way from doing it.” He allowed that it could be used for workers’ comp training. 

Insurers are new to unlocking technology, said Rivenburg’s colleague, Gail McGiffin, managing director and global insurance advisory lead at EPAM, who spoke in an interview separate from the event. 

Gail McGiffin, managing director and global insurance advisory lead at EPAM

“We’re in the early stages of enabling underwriting, with new forms of access,” she said. “I like to think of not just bombarding underwriters with more data, but really leveraging technology to aggregate, synthesize and identify patterns that are meaningful, apply semantic logic to the patterns of data, and the anomalies of data, and help the underwriter focus on what they should know about, when and what to do about it.”

The insurance industry is used to “episodic” treatment of data for distinct events such as submissions, renewals and endorsements, McGiffin observed. Event-based continuous risk insights are new for underwriting, she added, but will help with “no-touch” underwriting using rules-based technologies and AI/ML. “New technology will be leveraged across the operating models for underwriting as we know them in the industry,” she said.

To wade through a drowning amount of information and get to the data that is impactful, added Rivenburgh of EPAM, means insurers need to be “innovative and really stretch themselves,” she said. 

New York Life’s Haque counseled against trying to “boil an ocean” of data, and instead “start with a sample set, and incrementally move the data forward.” Starting small gives both big and small firms a higher chance of succeeding in their data efforts, according to Haque.

Ideas on how to manage data often aren’t new, just being adapted to digitization, Swiss Re’s Donkervoet said. “We are now figuring out ways to utilize digitization within our insurance process as a whole,” he said. “From that perspective, don’t necessarily be negative when something doesn’t work, because a lot of times they aren’t going to work. But stay positive and keep on trying and experimenting because that’s how we’re going to innovate.”