The data revolution has long since been underway for personal lines of insurance – but it’s taken far longer to catch up with the commercial space. So with the wealth of information available, why aren’t commercial insurers leveraging it more efficiently?
It’s a question that’s weighed on Graeme Newman’s mind since he first entered the insurance space.
“I remember when I first started working in the insurance space, we had these huge questionnaires that asked hundreds of different things,” says Newman. “But only a tiny subset of that information was actually being stored for analysis – so if we weren’t doing anything meaningful with it, why were we asking so many questions and creating such a barrier for entry to new customers?”
But the tides are starting to turn, and the old tendency to ask for every conceivable scrap of data with hopes of using a tiny fraction later is beginning to moderate.
Today, as Chief Innovation Officer of CFC, Newman works to change that paradigm – or in his words, “turn it on its head”. It’s a process geared at making it easier for both brokers and customers alike to gain access to the products they need.
Newman points to CFC’s own cyber policies as an example.
Data-gathering for a cyber policy, he explains, tends to take the form of assessing a company’s digital footprint – so it’s not unusual to learn more about the company than they know about themselves.
“The issue of course, is that prospective hackers are doing the same thing – digitally casing the joint,” says Newman. “Our job is to map that and get a view of a company’s cyber-risk profile – and the data around that, and therefore their risk profile, changes every single day.”
CFC’s own upcoming Connect platform – scheduled for launch here in Australia this month - aims to implement the digital footprint approach for prospective clients, delivering quotes within less than a minute.
It simplifies the underwriting process to one easy question – the client’s website. Using CFC’s proprietary data enrichment engine, CFC accesses hundreds of data points from basics like email security and hosting providers to mentions of the client’s business on the dark web. These data sets are cross-referenced against CFC’s Australian cyber claims data over the past 20 years to provide limit benchmarking and true claims profiles for the most statistically relevant peer group. This seamless interrogation of data from the answer to one question delivers an instant quote and supporting sales pack in less than a minute.
“Realistically, we want to do two main things – improve the customer experience, and improve our ability to risk select and price products,” explains Newman. “We don’t actually need to ask the client for tons of information to do that; there’s a lot of data points that can be automated at the back end allowing us to capture the information we need without having to ask clients for it. The added benefit is that it saves brokers an enormous amount of time and the supporting sales pack makes it easier for them to convert a quote into a sale.”
Newman is quick to point out that these aren’t fundamentally new ideas.
“We’re more interested in making a smoother wheel, rather than reinventing it entirely,” he notes.
The challenge in the commercial lines space is finding the right ways to access the large volumes of structured data that insurers need to be able to make intelligent pricing decisions, and deliver a smoother and quicker experience for brokers and clients alike. For CFC, its Connect cyber platform represents the starting point and a model to replicate.
“Buying insurance is buying peace of mind, and I think that’s something we need to be very conscious of, irrespective of industry and type of insurance that we’re selling,” says Newman. “It’s more about being aware of how we can leverage techniques like this over the longer term – as well as looking at ways we can funnel it into new services that we can offer to brokers and coverholders.”
Looking beyond 2020, Newman believes that insurers will have to come to grips with such data considerations across a broader range of industries.
“At broker level, I think we’re going to see things streamlined,” says Newman. “Certainly there’s still a critical role to play in explaining the nature of products and why they’d be important to the client.”
Person to person interaction is still the most effective tool for that, Newman believes, even as tech continues to advance.
“Even in a world of data, we still need that human element to connect effectively,” he smiles.
