The future of insurance is well and truly here: the only way insurance carriers will be
\nable to survive and thrive is by utilizing big data, including new and emerging data
\nsources.<\/p>\n

In an interview<\/a> with Mad Money\u2019s Jim Cramer on CNBC, Chubb Ltd.\u2019s Chairman
\nand CEO Evan Greenberg commented: \u201cWe spend a billion dollars a year on
\ntechnology. We\u2019re in a world that\u2019s going from analog to digital\u2026if you remain analog,
\nyou\u2019re history.\u201d<\/p>\n

Greenberg wasn\u2019t just describing digitizing an industry that has historically adopted
\ntechnology at glacial speeds, but how harnessing big data can help insurers actively
\npredict and prevent loss, rather than only deal with the financial aftermath.<\/p>\n

\u201cLoss costs rise every year by four to six percent,\u201d explained Greenberg. \u201cThere is always
\ninflation on liability, property, repairs, labor, and so on.\u201d<\/p>\n

This is where technology, especially AI and machine learning becomes an advantage,
\nnot just the latest industry buzzword. Traditionally, insurance carriers use legacy data
\nsources across all lines of business and some, like Chubb<\/a>, are using new and
\nalternative data sources to alleviate systemic problems. These alternative data sources
\ninclude social media and publicly available online data and have been proven to
\nmitigate loss cost, among many other benefits.<\/p>\n

In the interview, Greenberg specifically mentions claims and underwriting as areas to
\nbetter serve their clients. For example, the existing process for pricing, quoting, and
\nunderwriting small and medium-sized businesses is predominantly manual, time-
\nconsuming, expensive, and not ideal for the carrier or consumer.<\/p>\n

\u201cRight now, if you\u2019re a small business, to underwrite you we ask you about 30
\nquestions. For Chubb, over the next 18 months, that\u2019ll come down to about seven
\nquestions, because we can just scrape the answers from data that is publicly available.
\n[We] don\u2019t need to bother you with that,\u201d he told Cramer.<\/p>\n

By using this type of new and emerging data, carriers can complete the picture of new
\nbusiness and streamline their intake process by prefilling profile data and standard
\neligibility questions with validated data. But why would a carrier only evaluate the
\nbusiness once during the policy\u2019s lifetime?<\/p>\n

\u201cUntil now, carriers have looked at data at a single point in time, at the underwriting
\nstage or the first notice of loss or injury,\u201d says Max Drucker, CEO, and Co-founder of
\nCarpe Data<\/a>. \u201cBut now we live in a world where data can be accessed continuously, it\u2019s
\nfluid\u2014data is a stream. So we can see when business is offering a new service, or
\nwhen an apartment building added a pool as it happens, rather than waiting for the next,
\nundetermined point of time when a carrier may check a database.\u201d<\/p>\n

An insurer monitoring emerging data sources can see changes as they occur, giving
\nthem the potential to react sooner to both risks and opportunities, like monitoring
\nbusiness performance and reacting to material changes that either create new risk or
\nchange eligibility.<\/p>\n

Other ways that a carrier can see immediate benefits include being able to act quickly
\non inaccurate or missed data that would have been too difficult to discover without
\nconsistent data monitoring, or easing the intake of new business with better pre-fill and
\neligibility checks. For instance, a beauty salon adding waxing services, or a cafe that
\nupgraded their alcohol license from beer and wine to add liquor are scenarios that
\ncreate potential upsell opportunities and valid touchpoints for agents with their clients.<\/p>\n

In short, a matched business in the hands of an agent together with a detailed picture of
\nrisk is a very compelling sales scenario.<\/p>\n

\u201cIn the small space of time that these alternative data sources have been available to
\ncarriers, they can now be at the forefront of this evolution by having the ability to
\ncontinuously monitor their policies with real-time data, across their entire book,\u201d explains
\nDrucker.<\/p>\n

Being able to underwrite with more than a static picture results in a true return on
\ninvestment for carriers, with prevented claims, opportunities to upsell, reduced premium
\nleakage, and overall processing efficiency.<\/p>\n

Get all of your insurtech news and insights on the SVIA Blog<\/a>.<\/p>\n<\/div>\n<\/div> <\/div>\n <\/div>\n<\/section>\n