Innovation in Insurance: The Strategic Power of Data

Navigating Data in Insurance

We spoke with a prominent figure in the insurance industry to gain practical insights into using data as a strategic asset. Our guest, an Underwriting Consulting Director at CNA Insurance with a background in actuarial sciences, sheds light on the significance of data in underwriting.

Her experience underscores the wealth of data available, ranging from proprietary insurer information to public datasets like CMS data.

The Evolution of Data Accessibility

Looking back a few years, our guest highlights the substantial increase in available data, citing examples from CMS data during the pandemic. Information on staff turnover in nursing homes, previously undisclosed, became critical in assessing risk. 

Insurers and insurance companies are responsible for capturing and utilizing such information effectively, acting as proactive advisors to their insured.

Data Analytics in Risk Assessment

As data volumes continue to surge, this calls for adaptive risk assessment methodologies. With advanced analytics, including AI and machine learning, insurers are better equipped to analyze complex variables. 

However, challenges persist, requiring a delicate balance between leveraging AI capabilities and maintaining confidentiality.

The Rise of Location-Based Data

Location-based data emerges as a vital component in risk assessment. Our guest emphasizes the varying accessibility of public information, depending on a state’s inclination towards government transparency. 

States favoring less government control tend to provide less readily usable public information, posing challenges in acquiring location-specific data.

External Brokers and Legislative Updates

Insurance firms have increasingly relied on external brokers for valuable insights in the past year. Large brokerage firms like Willis Towers Watson share claims reports, average settlements, and legislative updates, influencing the industry’s trajectory. 

Legislative changes are pivotal, driving shifts in insurance dynamics and prompting carriers to adapt their offerings.

Risk Profiles in a Post-COVID World

The post-COVID world has led to more refined risk profiles. Carriers have responded with innovative coverage solutions, introducing new entrants to the insurance space. 

Market cycles, marked by increased rates and reduced capacity, create opportunities for new players to enter the market and address emerging needs.

AI, Automation, and Streamlining Processes

The operational landscape is evolving, with increased competition and a surge in available data. Our guest details the shift towards AI, especially in data processing and analytics. 

Streamlining processes, however, remains a challenge as the industry navigates through various software programs and tools to assess risks accurately.

Usage-Based Insurance

Usage-based insurance, a paradigm where risk assessments are calculated beforehand, is gaining traction. Insurers are exploring innovative approaches, incorporating additional services like fall detection programs. 

While it introduces exciting possibilities, the industry remains cautious about such models’ long-term viability and customer acceptance.

Long-Term Strategy in Insurance: Specialization and Balance

Addressing the challenge of long-term strategy, our guest advocates for specialization. Insurance firms, whether carriers or brokers benefit from focusing on specific niches rather than adopting a one-size-fits-all approach. 

Specialization fosters a deeper understanding of industry trends, facilitates cross-collaboration, and positions firms as trusted advisors.

Building a Data-Driven Future for Insurance

In conclusion, the path to innovation in insurance lies in treating data as a strategic asset. From shifting perceptions to addressing challenges and embracing technological advancements, insurance firms have the opportunity to unlock new realms of possibilities. 

As the industry continues to evolve, the strategic use of data will undoubtedly be the driving force behind sustained success and growth.