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Data Analytics in the Insurance Industry

In the insurance industry data analytics are an invaluable tool to make better decisions for measurable business outcomes. Risk has never been more frequent or severe presenting serious threats to carriers, reinsurers, and brokers across all lines of business.

With data analytics P&C companies can:

  • Embed advanced analytics into underwriting, claims and portfolio management

  • Create workflows for better and faster decision making and better customer experiences

  • Turn data into a competitive advantage

  • Have a single source of truth across your business with centralized, consistent, scalable cloud-based data management and Salesforce’s CDP (Customer Data Platform)

  • Implement solutions faster

  • Utilize analytics to create predictive models

Life and annuity companies connect with customers and give them the support they need without complicated software or distractions. Group benefits providers manage the entire benefits lifecycle by connecting teams and reducing unnecessary steps, and by scaling fast.

Innovations in digital, data and cloud technology are providing solutions to support and enhance portfolios, streamline operations, and deliver high caliber customer experiences.

Covid-19 accelerated an already burgeoning force of change in the insurance industry requiring data and analytics to drive complicated business decisions. The property and casualty insurance sector has struggled with the challenging fundamentals. Price competition increases the need to provide and show value in everything you do. Commoditization of both personal and commercial lines continues to make the marketplace competitive and fast moving. It is more important than ever to move at the speed of light and sound.

The bottom line is the future of underwriting depends on artificial intelligence, automated workflows, machine learning, and an agile approach to development of tools allowing the data to drive the business and the skilled specialty professionals to handle large, complex, high-value underwriting.

Salesforce’s cloud based solutions reduce operational costs and innovate faster with purpose-built insurance solutions. Summit Technologies can help you implement these solutions without hiring additional IT staff or extensive operational downtime.

Data and analytics capabilities are becoming the norm in the P&C sector in Europe and North America. Best-in-class performers are putting distance between themselves and competitors by building advanced data and analytics underwriting capabilities that can deliver substantial value. For example, even the leading insurers can see loss ratios improve three to five points, new business premiums increase 10 to 15 percent, and retention in profitable segments jump 5 to 10 percent, thanks to digitized underwriting. We anticipate that carriers will increasingly use the power of data and analytics to proactively assess their outlooks—similar to what hedge funds do in predicting capital markets—and identify market opportunities ahead of competition.

Insurers can’t move fast enough if they are depending on yesterday’s data to make tomorrow’s decisions. Insurers need to utilize preventative data-driven parametric models to stay ahead.

Data analytics are useful in fraud detection. With the application of data analytics, insurance claims fraud detection becomes speedier and more accurate. For example, the history of fraudulent cases is stored in the data trends of an insurance company and while processing any claim, the insurers can carefully check if the trend is repeated.

Data in the insurance industry enables insurers to collect, process and use data across various stages of the insurance product lifecycle, such as product design, marketing, sales and distribution, pricing and underwriting and claims handling. Leading insurance carriers use data and advanced analytics to reimagine risk evaluation, improve the customer experience, and enhance efficiency and decision making throughout the underwriting process. The same insights can often be used in loss prevention.

Leading insurance carriers use data and advanced analytics to reimagine risk evaluation, improve the customer experience, and enhance efficiency and decision making throughout the underwriting process. The same insights can often be used in loss prevention. Leading carriers regularly tap once-unimaginable volumes of third-party data from diverse domains, including environmental data, industry-specific data, location data, government data, and more. They have built agile capabilities to obtain, test, maintain, use, and reuse the data in their models.

Big data technology allows insurers to work quickly on a customer's profile. They can check their history, decide on a suitable risk class, form a pricing model, automate claims processing, and deliver the best services.

Insurance carriers developing sophisticated tech stacks enabling efficient model development and continual revisions are experiencing the most rapid, and most profitable growth.

Risk segmentation models powered by machine learning take the regulatory landscape into account and identify risk characteristics that help to improve pricing and reduce losses.

Actuaries rely on risk analysis software that applies statistical and mathematical models to demographic data about the insured party combined with a variety of data from external sources to calculate the likelihood of a death, sickness, injury, disability, or property loss. Machine learning and data analytics provide predictive analysis that grows and learns with every change.

Best-in-class insurance carriers have built powerful digital platforms hosting analytics-based underwriting models that deliver a distinctive broker-agent experience while mitigating risk.

Diverse external data sources may serve as fuel for a new underwriting engine, and artificial intelligence–based models may unlock valuable new insights, but no underwriting transformation is complete without a targeted plan for the people involved. Best-in-class performers invest in five activities aimed at setting up the organization for success with data and analytics initiatives.

Establish cross-functional agile teams that own the end-to-end, quote-to-bind journey

Emphasize adoption and scale from the first day

Build skills and capabilities that utilize human capital coupled with artificial intelligence

Practice continuous improvement

Partner with a technology consulting firm to bring everything together

Best-in-class underwriting requires a combination of distinctive analytics, tools, frontline and management routines, and investments in talent and capability building. The ideal mix of these elements will vary by line of business. P&C insurance carriers can benefit from the advanced in data and analytics to transform their underwriting and pricing efforts. Summit Technologies LLC can help. As leading insurers are already experiencing, the potential benefits—in the form of increased premiums, reduced loss ratios, shortened quote-to-bind times, improved risk discrimination, and increased STPs, among others—are substantial and can give insurers an edge in the challenging insurance sector.

Data analytics are just one of the many ways that Salesforce empowers reps, agents, agencies, and companies with the tools they need to deliver outstanding customer service with every interaction. A 360 degree customer view makes servicing accounts easier by removing data from siloed warehouses to be readily accessible for every customer communication. Salesforce’s cloud infrastructure works well with Vlocity, Guidewire, Duck Creek and many other insurance solutions to take your business and your data farther.

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