Page 20 - July2017

Correct assessment at the point of acquisition and full universe compared to what may be perceived by
underwriting reduces the possibility of incorrectly pricing an organization’s own frame of reference. The ability to
risks which can only add to widening loss ratios, damaging analyze industry level benchmarking data is key to gaining e
profitability and diminishing the customer experience. Data a holistic view.
analytics can also help manage the overall underwriting
and claims activity more efficiently: putting adjusters A holistic view of data brings complexity and
onto claims being scored as more complex or more likely it requires a more collaborative approach to
to result in legal expenses. This can speed up claims external data to be able to gain actionable
handling - resulting in more low-touch or no-touch claims, insights. The first step of the data lifecycle,
reducing settlement amounts, and ultimately improving the collaboration in harvesting data, is fairly
customer experience. In terms of fraud, predictive analysis straightforward. It is in the ingesting and
is getting much better at identifying fraud earlier in the graphical presentation of the data - or the
claims cycle. With a combination of rule modeling and exploring, visual, iterative ability to inform
database searches it is able to score claims according to business decisions - that the process becomes
those worthy of management time and manual handling - more challenging.
creating a more efficient claims process.
How Advanced Analytics Help Carriers Compete and
Retention of a carrier’s best customers is a key element Grow More Profitably
of profitable growth. With continued analysis of its The insurance business model is moving to a fast,
book of business, a carrier can effectively manage and sophisticated process where consumers expect providers
maintain a positive customer experience so that at the to know their needs and preferences. Customers do not
point of renewal, the customer is less tempted to shop for want to be asked repeatedly for their personal data at each
alternative providers. touchpoint and this requires many new partnerships to
bring together external data sources. This was confirmed in
Our own research (UK Consumer Study) our own research (UK Consumer Study) where LexisNexis
identified that 25% of consumers admitted to found that 90% of consumers are comfortable with
feeling it is acceptable to provide inaccurate insurers’ auto-filling online applications.
information when arranging a motor insurance
policy. Fifty percent said that when this occurs, More than three quarters of motorists said they would like
“claims should still be settled.” It’s not just with insurers to take a whole lifetime of driving data, to be able
major fraud but with this long tail of casual to price more effectively. These are just a few examples
fraud where analytics offers big efficiency of how the connected world is transforming the insurance
savings. delivery model and propelling it toward greater self-
selection.
Everyone has data. And more is going to come flooding in
as new sources arise. But is it the right data? Do you have The volume and sources of data required to deliver the
the right resources, including technology, techniques and changes is already overwhelming. And there is every
talent in place to effectively evaluate, dissect and harness indication that it will continue to grow exponentially in the
the data to get the holistic view the business requires? short-term. This is not just a trend that will affect insurance
at the margins, it is akin to an industrial revolution in the
No matter the approach taken - internal, way all digital (non-physical) products are serviced and
external, or a combination of resources - delivered – and it’s all powered by data.
carriers must master advanced analytics and
integrate the results into the entire organization Big data and using insights from analytics no longer reside
to maintain a competitive edge and profitable only in narrow objectives set by the CIO or data scientists.
growth. Insurance carriers must be ready to leverage every bit of
data and every new advancement across the continuum
Why Advanced Analytics Capabilities are Important in a way that will help them maintain a competitive
An ever-rising tide of data already exists, but there’s also a advantage.
tsunami of IoT data about to break shore from a range of
sources. Carriers need to integrate advanced analytics into Questioning comes before learning. To create,
the decision workflow to leverage all of this incoming data carriers must first question everything and this
to fine-tune scores, segmentation, pricing, risk assessments goes to the heart of the challenges: making sure
and claims processing - in short, every aspect of the analytics are interrogating data in ways the
business that impacts the bottom line. With more data business needs and then communicating that
and more analytics power to process and make that data throughout the business, handing insights over
actionable, a carrier can have a more holistic view not only to operational processes all along the chain.
of its own business, but of the industry, that will add insight
and confidence into making decisions in line with business
objectives. John Beal is Senior Vice President, Analytics, for LexisNexis
Risk Solutions. He is responsible for leading the company’s
Holistic View insurance analytics team in product and services
An individual insurance carrier will often have a much development.
narrower view than might be obvious. Relying only on
Policies in Force (PIF) data does not give the full view
of the market. Carriers need proof points showing the

20 insight july 2017