Data & analytics in a dynamic E&S insurance marketplace

Data & analytics in a dynamic E&S insurance marketplace | Insurance Business America

Data & analytics in a dynamic E&S insurance marketplace

The fast-paced and ever-changing excess and surplus (E&S) lines industry in the US needs to innovate in order to survive and thrive.

Change is rife in the E&S marketplace. Mergers and acquisitions are mixing up the distribution landscape, and new entrants – including some highly specialized insurtech start-ups – are challenging the status quo and forcing E&S incumbents to step up their games. Furthermore, as technology continues to advance, risks that once sat comfortably in the E&S market have started to commoditize and shift over towards the standard markets. Again, this is forcing E&S providers to up their value propositions and incorporate technology – primarily, data & analytics – into their businesses.

One E&S provider resolute about the need to incorporate technology and data & analytics into its business in order to better manage the pricing, products and services it provides is Nationwide E&S/Specialty. The organization, which was founded in 1982, is focused on innovation under the leadership of president Tom Clark, especially where it can increase the speed, efficiency and ease of doing business with distribution partners.

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“The E&S marketplace is very dynamic right now,” said David Nelson, senior vice president, contract underwriting, Nationwide E&S/Specialty. “There are mergers and acquisitions happening and a lot of new entrants coming into the marketplace. When new companies start up or when insurtechs start to think about getting into the E&S marketplace, it causes us to think a little bit differently about how we transact business. It begs for E&S providers to look at our operating models in terms of how we market through technology and how we create speed and efficiency, not only for ourselves but also for the wholesale brokers and MGAs that we do business through.”

Speed and efficiency are two key priorities for insurers playing the innovation game, especially when it comes to translating data & analytics into actionable insights. To meet these priorities for its distribution partners, Nationwide E&S/Specialty is developing its internal underwriting system, which utilizes both internal and external data sources to make faster decisions on risks.

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Thomas Jurgens, senior vice president, brokerage underwriting, Nationwide E&S/Specialty, explained: “In our space, it’s all about speed. How can we leverage all of the data that’s available in order to get back to our distribution partners on a quick and timely basis with a ‘Yes’ or ‘No’ to a submission? We’re focusing on how we can do a better job through automation so we can improve the ease and efficiency of doing business with us.

“There’s so much data available today. We’ve been in the E&S business for over 35 years, so we have the added benefit of lots of historical data, but with all these new sources we’re thinking about how we can approach data differently. We’re finding now that many of our wholesale partners are gathering a lot more data than they used to. Moving forwards, we need to figure out how we can jointly utilize all of our data together.”

There are a lot of conversations in the insurance industry about unlocking the value of data. Nelson commented: “Each organization has their share of historical data that hasn’t been leveraged to its fulness, but today there are a lot more conversations around how we can share our learnings in a good way.” He added that in the age of digital innovation, it’s useful for partners to couple up and solve problems together rather than innovating independently and then meeting down the road at two different points.