Data, and its role in the digital transformation of the insurance mechanism, has been enjoying its moment in the sun for a while now, and it doesn’t look like that sun will be setting anytime soon. For the likes of Nick Mair (pictured), co-founder of the insurtech DQPro, which has spent a number of years serving the specialty insurance market, seeing the sea-change in how London Market carriers value having a second pair of eyes on their data has been deeply rewarding.
“I think it’s fair to say that as an industry, we’ve always known data was important but we’ve almost neglected it for a long time,” he said. “I think now is a really interesting moment because a combination of regulation and a need for increased efficiency is really driving attention back to this space again.
“What we’ve found in specialty insurance, in particular, is there’s a massive problem with data that relates to the complexity that you have there, compared to say personal lines and retail insurance. You might have 300+ lines of business coming in from all over the world, and there’s still a lot of manual keying and still a shocking lack of standards in the market around moving that data from A to B.”
The market is also grappling with a lot of legacy problems resulting from the older systems in place, he said, which is the recipe for a perfect storm of data issues. Mair noted that insurance is a bit like a river system – if you don’t get the data right upstream, everything else downstream becomes polluted. As a result, one data issue can have five times its impact if it’s not dealt with early on.
For DQPro, which entered the market in 2015 and has since expanded to provide data quality oversight across almost the entire London Market, this is where the opportunity to shine comes in, he said. Its software is created with the purpose of helping insurance businesses do what makes them more efficient by saving on back-office costs and supporting them in becoming more compliant.
DQPro’s technology plugs into existing technology, he said, and helps insurers understand the health issues within their data but also to resolve those through workflow and reporting. Recently, the efforts of Mair and his team have been focused on developing an API roadmap for the markets’ specialty carriers.
“We’re at a very interesting point, where, in order to achieve digital transformation, we have lots of different components along the risk placement process that need to start talking to each other and, more importantly, passing data to each other,” he said. “I think that’s something that retail insurance and general insurance have done a much better job of. There have been standards and systems exchanging data in that space for over a decade.
“But in specialty, we haven’t been able to achieve that until now. What’s really interesting is we now have a combination of changes to the market infrastructure, acceptance that we need a common standard, and private enterprise rather than waiting to see what the market does. Change is being driven by [industry players] saying, ‘OK, if the market infrastructure is going to be slow about delivering this, then we’re going to start offering solutions ourselves’.”
That’s a much more powerful force because it creates healthy competition, Mair said. And what this means for API development is that APIs are evolving in an ecosystem with an improved attitude towards connectivity. Newer systems are built to be API-native and with connectivity in mind, as opposed to the more traditional market approach which saw vendors look to own as much as they could of the chain commercially.
“For them, letting other vendors plug into your infrastructure was seen as a commercial threat,” he said. “But actually, I believe the opposite is true.”
More and more industry experts around pressing topics such as data, digitalisation and customer expectations are encouraging insurance players to look beyond the examples set by the rest of the insurance market for insight and best practices. Mair has similar advice for those looking to embrace change in this space, and highlighted the example of Salesforce which has created a powerful software product but also built a community around that.
That community sees other builders and creators develop their own apps which plug into the product and add value to it, bolstering the value of Salesforce as the common factor between these solutions, but also adding greater value to Salesforce’s customer base. Now the larger vendors are starting to realise that the market infrastructure is undergoing a historical period of change, he said, and one that is markedly different to anything that has come before.
“You may have heard about this “historical change” before in the specialty market, where they tried to instigate mass change, and it has not worked out,” he said. “But I have more confidence now than ever, that we’re on the right track. Purely because we’ve learned so many lessons from the past, and we have the right people and the right forces involved. And there is going to be a considerable competitive disadvantage if you do not change.
“And some of the emergent leaders are taking a different approach to market change and realising we have to invest in it. For example, The Future at Lloyd’s transformation programme is openly talking about the concept of an ecosystem, where different players who each have a role to play in moving risk data from A to B, can all plug in at different points in the value chain, and add value and contribute to the placement process. I think it’s really important they deliver on that and we will see where it goes from there.”
