The big data differentiator

The big data differentiator | Insurance Business America

The big data differentiator

It’s an exciting time in the E&S market, where several dynamics are creating opportunities and challenges. In times like these, a competitive advantage like Big Data – the ability to digitally sift through millions of lines of information and identify trends – can allow E&S insurers to discover those opportunities and mitigate the challenges.

Jude DiBattista, chief casualty under-writing officer for brokerage individual risk at Nationwide, attributes the current boom in the E&S space to three factors: poor historical portfolio performance, new catastrophe-type losses and social inflation. He says these factors have led to a pricing correction across E&S, particularly in segments such as real estate, construction and transportation.

“These factors allow us to be innovators in areas that are in need of creative solutions,” DiBattista explains. “Meanwhile, the COVID-19 pandemic gives the industry an opportunity to help businesses reopen and provide loss control recommendations, among other things.”

“This is probably the most unique market environment that I have ever experienced,” adds John Anthony, vice president of E&S contract commercial P&C at Nationwide. “So many different compounding factors, from COVID implications, legislative and social inflation issues, and capacity changes within the marketplace – whether it’s an influx or a repeal of capacity – are creating opportunities within the E&S space. It seems like it’s changing more rapidly than I’ve ever experienced.”

These conditions create an environment where leveraging data can mean the difference between staying stagnant and being prepared to seize opportunities that may catch others off guard.

Harnessing the power of data

Known for nurturing specialists rather than generalists, Nationwide thrives on identifying challenges and opportunities and leveraging the latest technologies to make the most of them. DiBattista says this provides a deeper understanding of the industries Nationwide focuses on and enables it to improve efficiencies to make faster and better decisions.

“The use of this Big Data is really going to help us reshape how we underwrite, evolve in the market, and identify new products and emerging trends,” he says. “It will also allow us to obtain a forward-thinking view of our portfolio and the market. Historically, we always relied on analyzing the past in order to predict the future – studying five-year loss trends – but it’s really that forward-thinking view that will allow us to be successful and preserve long-term profitability. This is the value-add we can bring to our customers, and it enables us to address the challenges and opportunities we’re seeing today and into the future.”

Meanwhile, Anthony says the opportunity to leverage Nationwide’s commitment to investing in data and analytics, predictive modeling, machine learning, and artificial intelligence is a key component of what drew him to the company.

“We have developed an entire advanced analytics team,” he says. “We have 38 years of E&S-specific data that is unmatched anywhere else in the industry, and our ability to glean information from that data is a differentiator for us and our policyholders and partners.”

Forging data-driven solutions

At Nationwide, data is driving a forward-thinking strategy to provide value to both existing and potential partners.

“Within the contract space, we’ve developed what we refer to as our underwriting insights team, which is the nerve center of our contract P&C and excess underwriting department,” Anthony says. “This team is leveraging advanced analytics and modeling to empower all our internal underwriters and our agency partners with the data and information they need to make better decisions. In the end, this helps us optimize our portfolio and match exposure to premium.”

At the same time, DiBattista has been using Big Data and technology to sift through submissions and study the overall market, including trends and developments. This allowed him to identify a potential need to bridge the gap between primary and excess coverages. He applied Big Data to this question to study and find a creative solution for specific classes and segments.

“With Big Data, we can really provide creative solutions and obtain deeper understandings of the niche segments we focus on,” DiBattista says. “This enables us to differentiate both on the underwriting side and across our entire organization – from our loss control services that help keep our policyholders safe and reduce the risk of a claim, to our claims experts, who are experienced, responsive and deliver fast claims service.”

Anthony doesn’t take Nationwide’s capabilities for granted. He says most players in the E&S marketplace strive for sophistication in their approach to risk selection and appetite construction and have a data-driven decision-making mentality. But he says few are committed to deploying the resources and organizational structure to be successful.

An appetite for mutual success

The unlimited potential of data is creating boundless opportunities for the insurers that leverage it alongside more traditional relationship-building strategies.

“We talk a lot about digitization within our industry, and it really is the future of our world and our industry in particular,” Anthony says. “We’re committed to providing dynamic and adaptive digital experiences at Nationwide, and we’ve made a large investment of both time and resources to ensure we’re optimizing the ability to offer products in a digital environment. At the same time, we understand that ultimately, this is a people business. We’re committed to people and the relationships all the way throughout the transaction as we move forward and evolve as an organization.”

Both Anthony and DiBattista view Big Data and advanced technologies as a way to facilitate the ultimate goal of delivering an optimal customer experience.

“That’s why we’re invested heavily in those analytical tools and resources,” Anthony says. “To differentiate our engagement with our partners is our number-one focus, and establishing the deep relationships between our underwriting teams and agency partners is the cornerstone of our company.”