This article was produced in partnership with Percayso Inform
Mia Wallace of Insurance Business sat down with Rich Tomlinson, MD of Percayso Inform to discuss the evolution of data analytics.
Never one to rest on its laurels, the team at Percayso Inform have taken the first quarter of 2023 at a running start – completing a “rocket ship” of an acquisition in Cazana and announcing key partnerships with the likes of Acturis, Shift Technology and Total Systems.
Discussing the insurance data intelligence provider’s whirlwind progression with Insurance Business, managing director Rich Tomlinson (pictured) emphasised how this mirrors the pace of change seen across the wider data analytics ecosystem. Going back to when Percayso first laid down roots in the market, he said, the biggest breakthrough at the time was the use of third-party data sets at the point-of-quote.
“That was ground-breaking at the time,” he said. “Because enriching the tens if not hundreds of millions of quotes flying around every single day was as much a technological challenge as it was a pricing, underwriting and fraud challenge. For us, it has been about moving that piece on further – enabling all these data points to have a bearing across all insurance lines.
“Because while this really started in motor, it has moved across property and SME and travel – and it’s got a place in all insurance lines and across the entire insurance lifecycle. Because the impact of this data functionality goes beyond just the point-of-quote, it can be increasingly used at renewal. And that’s a core area of focus for insurers right now given that it costs twice as much to win a new customer as to retain an existing one, and given the regulatory changes facing the sector.”
Watching this evolution play out in real-time has been fascinating to see, Tomlinson said, not least for its implications on where the data analytics ecosystem might go next. A key trend that he is seeing is the shift from confirmative data (i.e. checking information that already exists) to predictive data (i.e. using machine learning models and additional third-party data to predict an outcome).
It has been quite a natural evolution, he said, aided in no small part by enablers across the insurance profession who have championed the power of using data effectively. Because what insurers tend to be quite good at is asking ‘what’s next’ and seeking out solutions that will give them the edge over their competitors. This is especially true of those in the aggregator space, where you only need to be slightly better to gain a significant competitive advantage.
It has been understood by the market for quite some time that “data is an arms race”, Tomlinson said, but all too often insurers and brokers have made the mistake of looking to amass huge amounts of data for its own sake rather than taking an outcome-orientated approach. There are a number of insurance providers that are doing really good, interesting things with data, but there’s a lag when it comes to full optimisation of what they can achieve with regards to pricing, quoting fraud detection, policy cancellations etc.
“An optimal data strategy includes all product lines and all stages of the lifecycle,” he said, “but it doesn’t stop there because as your competitors make improvements, you’ve got to keep moving that line. At the end of the day, most insurers are trying to avoid the worst kind of business – and that’s not just fraud but also high-risk customers or people who are going to cancel quickly.
“If you’re not avoiding those and your competitors are because their data strategy is optimised better, then you’re not going to get the highest calibre of business. When times are good, you can just about survive but we are seeing a few across the industry who are not surviving. And I would say that is largely due to the fact they haven’t nailed that data enrichment strategy piece.”
In the five years Percayso has served the insurance sector, it has seen for itself the disparity in capability that exists across the market. And it’s not simply a larger versus smaller provider issue, Tomlinson said. Among even the largest insurers, there are pockets of excellence which are not necessarily being leveraged consistently. With that in mind, taking a quality-over-quantity approach is key to how Percayso engages with its partners.
“There’s a lot of value to be added by actually working with an insurer or broker to understand what it is that they’re fundamentally looking to achieve, what tools they have, what IT infrastructure is in place and what their history is in terms of outcomes, claims, cancellations, conversations and the lifetime value of their policyholders,” he said. “As the data specialists, we need to understand all that in order to know what solution is the most appropriate and can offer the best value for money.”
Creating flexible, accessible and bespoke solutions, that are tailored to the challenge the client is looking to overcome, requires an inherently collaborative approach. But it’s not about making the client reliant on Percayso, he said, but rather empowering them with the right tools and platform to allow them to optimise and utilise their data as they see fit going forward.
“And unless you provide those tools and offer that collaboration, an insurance provider isn’t going to be able to achieve that as easily or as quickly as they need to,” he said. “That’s what we’ve really looked to accomplish since we launched and we’ve seen a lot of success because of that… And converting intelligence insight into strategy is a really big task and there are multiple stakeholders included in that so, for us, it’s about championing an iterative process of optimisation, so you can turn ideas into actions – and keep updating that value chain as you go along.”
When Percayso establishes a strategy with a partner, it’s anchored by the recognition that the strategy needs to play out in the real world. There’s a strong technology component to that, Tomlinson said, but other key criteria include consistency of vision and having the right infrastructure and distribution angles.
“And then ultimately, it’s all about the outcome,” he said. “That outcome can take a variety of forms – it could be claims, cancellations, lifetime value, cross-selling opportunities, upselling opportunities, profit/loss ratio, retention rates etc. Depending on the size and shape of your business, all of these outcomes and more are important.
“What we do, is take a complete view of the entire flowchart. It all flows through, starting with the data but going through these steps to ultimately reach the right outcome. If you start with the outcome and work back, that tells you what data you’re going to need and how you’re going to need to use it. Getting this right is about understanding the problem you solve and what outcomes you need to achieve to have an impact – and that’s the exciting part for us at Percayso.”
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