Big Data and Insurtech: A Carrier Perspective
James Merz | May 19, 2020
By James Merz, Chief Actuarial and Analytics Officer, Westfield Insurance
Carriers have used big data to drive business decisions before “big data” became a term. Insurers have tapped large volumes of raw and curated data to provide insights into customer behavior, predictive models, and other market opportunities. Data provided by “traditional” data brokers provided vast amounts of information on market performance, financials, and customer preferences.
But the massive increase of “big data” has magnified the benefits of understanding risks, customers, and the markets by providing far more detailed and individualized information that is more quickly accessible for direct analysis as well as analysis by AI/ML technologies.
Over the past several years, many new data sources have become available to allow insurers to improve insights into risks, create the right products to provide the most peace of mind for customers, provide competitive pricing on those products, and provide accurate reserving.
Non-traditional insurance information such as high-quality imagery, smart devices, and social data enables carriers to provide the best coverages for the best prices within the markets we serve. High-quality imagery allows carriers to provide faster, more satisfactory claims resolution. It also helps us identify risks to mitigate before a claim event occurs and provides customers with insights they can take advantage of to grow their own businesses.
Data is becoming more ubiquitous throughout all of society, and companies are monetizing the data that passes through their systems. New data micro-providers are challenging the models of the traditional data brokers. These boutique collectors offer far greater insights into the select business verticals they specialize in. Social data helps carriers understand their relationship with consumers at an entirely new level, detect fraud, or identify gaps in customer coverage. Additionally, carriers are ensuring that customers, claimants, and related parties’ data will be used appropriately and protected.
While some insurers were challenged with accessing their own data, insurtech and big data require a newfound nimbleness to handle data from other sources, which has enabled additional techniques to source their own data. The rise in insurtech has made information collection quicker and easier than ever.
In the past, data collection devices required physical connections and significant data standardization, and often resulted in gaps in data. Insurtech has brought focus and investment on identifying and solving needs through improved connectivity and security in IoT (Internet of Things) devices.
Insurers are using these technologies to identify risks, provide early warning, and reduce losses. Insurtech has expanded not just in the commercial markets and not just machinery, but also in the creation of “smart wear” that identifies risks to workers before they become injured.
Personal and home IoT devices have become commonplace to detect failures in appliances, furnaces, and hot water tanks. IoT devices are also used in autos to reduce or eliminate claims with early warning and automated decisioning that protect the driver and prevent vehicle damage.
We’re already seeing “smart cars” that include everything from lane-drift warnings, self-braking, and safe distance technologies. Although the vehicles are more costly to repair when there are accidents, these technologies will reduce in cost as they become more pervasive.
The more data becomes available about a company or an individual, the greater the privacy challenges -- in insurance and other industries. Generational perspectives on what is shared publicly are dramatically different, and more individuals are willing to share more private information about themselves to receive better treatment from businesses that serve them.
Carriers have taken great strides in protecting the individual’s information. Data collection has its boundaries, as the more data companies collect, the greater the exposure for a potential data breach that could result in lawsuits, fines, and reputational damage. Reliable carriers invest heavily in their information security and governance programs and are always vigilant with monitoring behind walls of protection.
Federal and state privacy and consumer protection laws are increasing, like the California Consumer Protection Act (CCPA). Many other states are looking to adopt laws that place similar or even tighter protections for consumers. Such protection is putting a heavy strain on carriers, not only to secure their data, but also to have a deeper understanding of their data and whom the data is associated with. It requires carriers to uniquely identify each individual related to a record, be they policyholder, listed driver on a policy, claimant, or even a witness.
These involved parties are protected under the “right to be forgotten” provisions within select consumer protection laws. These laws are forcing carriers to invest in data modernization efforts and disciplines for managing data assets to identify a unique individual and remove information related to that individual without jeopardizing the other data related to the records.
New data sources certainly provide new insights for carriers, but with those integrations, carriers must increase their lines of defense as each new source opens with it a new risk to be addressed.
The impact of AI
The buzz around artificial intelligence (AI) and machine learning (ML) technologies is founded on strong evidence and a foundation of risk and fraud models that have been in place for decades across many carriers.
What has changed is the volume of data, speed of the processing, the maturity of analytical skills to interpret AI/ML findings and recommendations, and easy-to-use tools that allow a broader user base to understand and feel more comfortable with the data for their own analysis.
Technologies that enable more self-service to the worker allow empower employee to become a true “knowledge worker,” basing daily decisions on actionable data that is easy to understand and interpret. Simple interfaces with charts, graphs, notifications, and recommended attention areas are easier to build and use than ever due to many technology providers.
End users of these technologies do not need IT or analytical backgrounds and find these tools even easier to use than spreadsheets. Knowledge workers making decisions based on data enable carriers to make faster, more accurate decisions that benefit both the company and their customers.
Knowledge about the data itself is becoming easier for companies with AI/ML-assisted data catalogs. Carriers have large volumes of data and are incorporating more data into their processes daily. Having a deep understanding of each of those data elements is critical for a company to know not only what the data means, but what data is important and why, what is personally identifiable information (PII) or HIPAA related, which is used for critical business processes, which has levels of quality that require improvement, and other aspects needed to provide knowledge workers with the right data to make their decisions.
Data catalogs have matured quickly over the past few years beyond the traditional business rules, glossaries, and standardized codes held in a repository, often requiring large teams to maintain the metadata captured about the data assets. Utilizing advanced AI/ML capabilities, data catalogs can now automate many of these processes, reducing the resources necessary to manage the data assets and identifying new relationships between data.
Data catalogs are a must-have technology to keep up with the ever-growing volumes of new data being used across the organization. Without self-service tools and modern data catalogs, knowledge workers will struggle to keep up with demand for analytics and insurers will struggle to remain competitive.
Big data in real life
Westfield is leveraging big data in combination with AI/ML capabilities to further enable data-driven predictions and prescriptive actions as it relates to business decisions for our customers and ourselves. Use of big data is enriching our understanding of consumers to improve the effectiveness of our prospect lead and customer pipeline management, triggering account management actions for submission prioritization, underwriting and referral optimization, and improving overall customer satisfaction by being more proactive and responsive.
We’re also using big data to develop new products, including usage-based insurance and embedded home insurance. We’ve enabled business units to access and maintain vast amounts of structured, semi-structured, and unstructured data from numerous sources. This information has enabled and will continue to allow us to create new insurance paradigms that benefit our customers, our independent agency partners, and Westfield.
- COVID Drives More Reliance on Risk Management Systems, New Study Finds
- Electronic Chat with Robert Clark, CEO, Cloverleaf Analytics
- Solving Customer Communications Challenges with Hybrid Mail
- Six Trends Shaping Digital Insurance Tech Strategies in 2021
- Billing a Key Component of Customer Service, Celent Finds
- Why Data Science Fails
- Electronic Chat with Andrew Jernigan, CEO, and Allen Koski, President and Chief Innovation Officer, Insured Nomads
- Electronic Chat with Allison Martin, CEO and Founder, UDoTest
- Are Carriers Ready for the Coming Crash?
- Electronic Chat with Christopher Moore, Director for North American Sales Engineering and Solutions, Trifacta
- Next Insurance Partners with Amazon Business Prime to Provide Small Businesses with Affordable Digital Insurance Options
- An AI Walks Into an Electronics Store...
- InsurTech NY Announces Global Early-Stage Competition Winners
- World’s Worst County/Western Insurtech Song
- Electronic Chat with Anne-Laure Klein, COO, Akur8
- COVID-19 One Year Later: The Digital Transformation of Insurance
- Electronic Chat with Michael Kassing, CEO/CVO, insured.io
- BrokerTech Ventures Announces 2021 Cohort Class for Accelerator
- An Entirely Preventable Disaster
- Flipping the Fraud Triangle
- The January/February ITA Pro Magazine is here!
- Credit Risk, ESG, Cybersecurity Top Risk Concerns for Financial Institutions, Deloitte Finds
- Electronic Chat with Ellen Moser, Senior Client Executive, Origami Risk LLC
- The Answer to “So What?”
- Leaders Rise from a Year Like No Other!
- Electronic Chat with Jonathan Roomer, Co-Founder, YuLife
- Getting Creative to Hit COVID Curveballs Out of the Park
- Electronic Chat with Eugenio Gonzalez, Plug and Play
- New Report Projects Global Insurtech to Grow by $21 Billion During 2020-2024
- The 2020 Virtual Event Wasteland
- Insurtechs, Investors Optimistic About Post-COVID Future, New DIA/McKinsey Study Finds
- Finding Grandmas
- No Code / Low Code: The New “Shortest Route” In Insurance Delivery
- Are You Addicted to Copy-and-Paste?
- Electronic Chat with Nino Tarantino, CEO- Americas, Insurance and Mobility Solutions (IMS)
- Driving Life Insurance:Tech Alone Won’t Solve Business Problems
- Electronic Chat with Robin Roberson, Managing Director, North America, Claim Central Consolidated
- How Do You Make It Happen?
- Electronic Chat with Jason Liu, CEO, Zywave
- New Partnership Models Take Program Business to the Next Level
- New Study Finds Less than Half of Consumers Trust Insurers to Respond to Their Needs
- Electronic Chat with Andrew Mauritzen, CFO and Head of Insurance Industry, Exactuals
- You Want Us To Do WHAT For Free?
- Electronic Chat with Evgeny Aleksandrov, Co-founder and CEO, Pilotbird
- Electronic Chat with Chris Cheatham, CEO, RiskGenius
- New MIT Sloan Study Finds Few Companies Gain Big Benefits from AI
- The September/October ITA Pro magazine is here!
- “Being Right” is Just the Start of the Battle
- Electronic Chat with Amit Ranjan, Executive VP and CAO, Xceedance
- Planning for Your Business and Tech Future: Strategies, Plans and Budgets for Rapid Transformation
- Electronic Chat with Jimmy Padia, Founder and CEO, Floatbot
- Gelato with Dots and Sprinkles
- COVID-19 and the Insurtech “Junk Drawer”
- Even “Change” is Different Now. Your Strategic Planning Needs to Be Too.
- The Road Ahead for P&C Insurers: How to Understand Customers Better and Navigate the Post-COVID Insurance Market
- Electronic Chat with Jake Tamarkin, Co-founder and CEO, Everyday Life
- Strategic Planning in the “New Normal” Digital Era of Insurance – Your Next Move
- Insurer Tech Investment Priorities See Major Shift in a Post-COVID World
- Plug and Play Selects 25 Insurtech Startups for Winter Batches
- Digital Transformation – A Top Strategic Priority and New Reality
- Four Steps to Successful Migration of Insurance CCM Applications
- COVID-19 Accelerates Insurance Digitalization to Meet Customer Demand: World InsurTech Report 2020
- Electronic Chat with Greg Williams, Co-Founder, President & CEO, Acrisure
- Electronic Chat with Matt Perlman, Partner, IA Capital Group
- Insurer Digitalization: Are you a Competitor or a Laggard?
- Leaders are Leading and Creating the Future of Insurance Distribution
- 3 Things You Need to Know About No-Code
- Electronic Chat with Adam Kiefer, CEO, Talage
- Underwriting in 3D: Using Data to Adapt and Improve Life Insurance Sales
- Getting Past the "Gelato Syndrome"
- Insurers Know CX/UX is Important, but Don't Agree on Execution, Study Finds
- Electronic Chat with Steve Lekas, Branch Insurance
- How AI Can Attract Millennial Talent to the Insurance Industry
- Preventing Data Breaches
- A New Boom for Life Insurance: Shifting Away from the 250-Year-Old Policy Transaction
- Electronic Chat with Ty Harris, Founder and CEO, Openly
- A Digital Wildfire Creates a Burning Platform for Digital Insurance Business Transformation
- Digitalization, COVID-19 Spurring More IT Investment in Cybersecurity
- Electronic Chat with Michael DeGusta, CEO, ClarionDoor
- U.S. Consumers Significantly Underestimate Flood Risk, New Survey Finds
- The Future of Insurance: Opportunities in Ecosystems
- Electronic Chat with Todd Greenbaum, CEO, Input 1
- Majesco to be Acquired by Thoma Bravo
- The Evolving Role of Managing General Agencies
- Electronic Chat with Char Hu
- Electronic Chat with Allan L. Egbert, Jr.
- Electronic Chat with Christopher Tramontano and Zbigniew Gawienczuk
- Data Science is Gelato
- Insurance Innovation: Alive and Kicking
- Independent Agents Divided on Digital Experience, New Survey Finds
- Electronic Chat with Michael Jones
- Electronic Chat with Paul VanderMarck
- As Auto Insurance Premiums Shrink, Insurers Need Mobility Ecosystem, New Study Finds
- Property & Casualty Insurers Raise Digital Games as COVID-19 Elevates Customer Expectations, J.D. Power Finds
- Electronic Chat with Bobbie Shrivastav
- Meet the Board: Marissa Buckley
- Big Data and Insurtech: A Carrier Perspective
- Traditional Insurers Need Open Ecosystems, Partnerships to Remain Competitive, CapGemini Report Finds
- Electronic Chat with John C. Siegman
- 4 Ways AI is Empowering Insurers During COVID-19
- 6 Big Changes to Insurance from the COVID-19 Crisis
- Electronic Chat with Christopher Ewing
- Independent Agency Staff Morale High During COVID-19, New Survey Finds
- Electronic Chat with Brad Epker
- Tapping AI to Improve Policyholder Experience
- Electronic Chat with Manisha Bhargava
- ITA Pro Magazine, March/April 2020
- COVID-19 a Game Changer for Workers’ Comp
- Electronic Chat with Steve Comer
- COVID-19 Pandemic Forces Cancellation of ITA LIVE 2020
- Leveraging Digital Resources in the Time of COVID-19
- Electronic Chat with Robert Hartwig on COVID-19 and Insurance
- Celent Study: Most Small Businesses Still Unclear on Importance of Cyber Insurance
- The January/February 2020 ITA Pro is here!
- Deloitte: New C-Suite Roles Mean More Opportunities for Women
- Electronic Chat with Pankaj Parashar
- Electronic Chat with Tara Kelly
- Electronic Chat with Chuck Wilson
- ITA, InsNerds Collaborate to Enhance ITA LIVE 2020 Content and Coverage
- How SMBs Can Compete in Digital Ecosystems in the 2020s
- 4 Ways Insurance Can Prepare for New Data Privacy Laws
- Brewer Lane Ventures Launches and Hires Insurtech Vet Martha Notaras as Managing Partner
- 2020 GIA Cohort Launches on January 14
- The November/December 2019 ITA Pro is here!
- Electronic Chat with Joshua Snead
- Electronic Chat with Wendy Aarons-Corman
- Simplifying the Move to a Third-party Print Provider
- Take a Business-Driven Approach to Continuous Improvement for Core Systems and Processes
- Electronic Chat with Ron Glozman
- Guidewire’s Data Guru Mike Byam on How Insurers are Using Internal and Third-Party Data
- Electronic Chat with Russ Bostick
- Electronic Chat with Rock Schindler
- Electronic Chat with John Siegman
- Electronic Chat with Martin Burlingame
- Insurtech Landscape 2019: Top 5 Takeaways
- Grinnell Mutual Tackles Massive Transformation -- in Stride
- A Candid Conversation with Paul Mang
- SageSure Insurance Managers Improved Competitiveness by Consolidating Payments to a Single Digital Platform
- Digital Does Matter in Insurance-- And Insurers are Missing the Mark
- The 22nd-Century Insurer: Taking a Cloud-First IT Approach
- The September/October 2019 issue of ITA PRO magazine is now available in digital format here:
- ITA Pro Magazine May/June 2019
- Spotlight on the 2019 IASA Conference
- ValueMomentum Selects Erie as Site of Regional Development Center
- Capgemini and Majesco Become Alliance Partners
- Electronic Chat with Dr. Dan Shoham
- Electronic Chat with Todd Greenbaum
- Martha Notaras: The “Outsider” with an Amazing Inside View
- Electronic Chat with Larissa Tosch
- Martha Notaras Will Join ITA LIVE 2019 as a Keynote Speaker
- Five Things to Consider When Evaluating Your Cyber Risk
- ITA Pro Magazine, January/February 2019
- Synergy Between Insurers' IT and Analytics Teams Key to Operationalizing Insights, Says Novarica
- Major Ransomware Attack Could Hit U.S. with $89B In Economic Damages
- ITA Announces 1st of Three Keynote Speakers at ITA LIVE 2019
- Electronic Chat with Jeroen Morrenhof
- Legacy Systems Are Dead. Really? Don't Count On It.
- Now Accepting Nominations for the 2019 ITA Bridge Awards
- It's time to register for ITA LIVE!
- Registration is Now Open for ITA LIVE 2019!
- What to Expect from a Digital Experience Platform Implementation
- ITA Pro Magazine September Edition is Now Available
- It's National IT Professionals Day
- Save the Date for ITA-LIVE 2019
- OneShield Software and UrbanStat Work Together to Improve Real-Time Analytics and Risk Decision-Making
- ITA LIVE 2019 - SAVE THE DATE!
- Insurance Technology Association Announces New Editor-in-Chief
- August 2018 Edition ITA Pro Magazine is Now Available
- Enterprise Architecture in an Agile World
- Top 10 Tips for Securing Your Mobile Devices and Sensitive Client Data
- Industry Insight: 4 Global Insurance Trends in Digital, Data, Content Services and Security
- Diving Deeper into Prioritizing Your Strategic Digital investments
- Why Content Rules
- How Mass Personalization Will Open the Small Business Benefits Market
- At Year End 2017, Will Your Organization Be Protected from Cyber Risks?
- Do Insurance Bots Dream of Mitigating Risk?
- Conditioned to Respond
- Managing & Mobilizing Insurance Data in a Connected World
- Race to the Finish Line
- New Tools, New Opportunities in Claims
- ITA LIVE: Reaching Insurance Industry Crossroads
- Advice to Insurance IT Leaders: Keep Your Eye on the Ball
- New Date, Venue for ITA LIVE 2017
- Guidewire Makes Major Push to Small and Midtier Market by Acquiring ISCS
- Insurance Disruption is Happening Right Now
- Insurity Adds Strategic Investment Partner, General Atlantic
- Beyond Transformation: The Convergence of Finance, Risk, and Actuarial Functions
- The Rapid Evolution of Consumer Protection Regulation
- Talent Hunt: Finding, Attracting, Retaining Top People
- Insurers Flexing Their Distribution Models
- Technology Driving Disruption in Insurance
- Fear of ‘Next Bubble’ Challenges Life, Annuity Carriers
- Technology Allows Commercial Lines Insurers to Stand Out
- Single Sign-on Viewed as Biggest Tech Challenge for Agencies
- ISCS Observes 20th Anniversary; Scurto Predicts Major Changes Ahead
- Policyholders and Their First Impressions
- Progressive Making Progress on the UBI Front
- High and Dry: Insurers Search for Disaster Recovery Plans
- Insurers Sign The (Un)Dotted Line
- Reflections of a Retired Insurance CIO
- Mobile Device Management Just One Answer to BYOD Issue
- Lessons from GEICO and Progressive on Winning the Critical Buying Stage
- You Are a Target for a Cyber Attack
- Web-based Systems are the Next Evolution in Claims Technology
- Gaining a “Wow” Experience from Web Users
- Time to Shift from Business/IT Alignment to Business/IT Alliance
- Healthcare Insurers Changing to Consumer Model
- Organization is the Key for Selecting Software Vendors
- Analysts Expound on the Needs of the Mid-tier Insurance Market
- Finding the Cure for Obamacare’s Website
- New Software Solutions Benefit Insurers on the Inside and Outside
- Products, Market Impede Investment in Systems for Life Insurers
- Combatting Cyber Threats: Predict, Prevent, Persist
- The Future of Telematics Heads Beyond Insurance
- The Shame in Cyber Security Lapses
- Building Policy Administration Systems for the Future
- Insurers Look Into The Eyes of Their Policyholders
- It’s a New Dawn for the ITA
INSURANCE IT NEWS
- Crawford Technologies Announces Second Annual Customer Communications Virtual Summit
- Zywave Acquires Risk Management Solutions Provider Enquiron
- eMaxx Launches Customer Centric Platform for Variable Cost Captive Programs
- Brewer Lane Ventures Hires David Castellani, Former New York Life Executive and Head of Technology
- RW Exchange, Sterling Seacrest Pritchard Announce Partnership
- Protecht Hires Todd Hancock as Chief Insurance Officer
- IMS Signs Partnership with Car Sharing Marketplace Turo
- Erie Insurance to Upgrade Majesco Billing for P&C on Majesco CloudInsurer® and Implement Majesco Insurance Data and Analytics Platform
The Email Chat is a regular feature of the ITA Pro magazine and website. We send a series of questions to an insurance IT leader in search of thought-provoking responses on important issues facing the insurance industry.
ITA LIVE 2020
ITA LIVE 2020 –SAVE THE DATE!
April 5th – 7th, 2020
The Diplomat Resort
Become a member today to receive updates – www.itapro.org/MR
BLOGS AND COLUMNS
Even the most digitally transformed insurance organizations struggle with ad hoc customer communications. Luckily, technology can help... READ MORE
Data science projects that “fail” all have one element in common... READ MORE
You have surely heard it said that small businesses are the growth engine for America. Today, the phrase has a special ring to it for benefits... READ MORE
With stagnant growth and lingering low interest rates, the life insurance industry faces a challenging future... READ MORE
Finding insurance carriers willing to write commercial lines risks has always been a challenge for producers... READ MORE
As Guidewire Software prepares for the start of Connections, its 11th annual user conference that begins on Nov. 2, Brian Desmond, chief marketing... READ MORE
COVID-19 has accelerated digital adoption, especially in the areas of claims adjustment and fraud prevention... READ MORE
- Vendor Views