What goes hand in hand for insurers?

What goes hand in hand for insurers? | Insurance Business America

What goes hand in hand for insurers?

Data analytics in the property and casualty (P&C) insurance sector has become essential for creating products and solutions that can respond to the growing frequency and severity of natural catastrophe (CAT) events in North America.

Kristin Marr, head of analytics at Insurity, has been in the technology space for the last 20 years, helping the industry understand and build out data analytics infrastructure and embedded insurance solutions to help P&C carriers and managing general agents (MGAs) stay agile.

“Data analytics should be portable as customers use many software tools to run their business,” she said. “We help customers make informed decisions in underwriting, claims, and portfolio management to improve profitability and response time.”

One helpful tool for managing CAT events is geospatial analytics, which gathers location-based data such as GPS and satellite imagery, helping insurers in the P&C sector make more informed decisions based on a region’s unique risk landscape. Geospatial risk mapping has evolved rapidly over the past few years to help create the most comprehensive products.

Read more: Data analytics – where do we begin?

“A great part of what is happening in the geospatial space is predictive analytics,” Marr explained. “Since first coming into the P&C industry, I’ve seen this technology become critical for carriers and MGAs in order to stay competitive.”

There is an insatiable appetite for carriers and MGAs to consume data to make actionable and insightful moves to remain key players in the marketplace, but many are trying to build product platforms that aren’t scalable.

“Onboarding data sources and providers, and building plugins can be very expensive,” Marr said. “The implementation strategy needs to provide flexibility to test out multiple data sources to figure out what works best for a particular business case.

“The industry needs a more holistic platform that has the ability to provide real-time relevant insights from multiple data sources.”

There are many more data providers today that are helping develop innovative solutions for insurers but a major pain point for carriers and MGAs is the volume of data being accumulated.

“The data sets that track severe weather events, such as hurricanes or wildfires, use rich imagery and location-based information,” Marr added. “Handling the volume of data is a big hurdle in itself.”

Read next: Lloyd’s partners with geospatial insurtech

In the midst of a technological transformation, the insurance industry is still burdened by a lot of legacy technology, and data providers have to work through a lot of different file formats during the integration process.

“As the industry matures, more and more providers are emerging, but some are still trying to figure out how to scale the data as a product or service,” she said. “Taking data, normalizing it, and making it actionable is invaluable.”

Overhauling technological infrastructure to accommodate data providers is a focus for carriers and MGAs that have the budget to do so, but for other players in the P&C market, it is much more difficult.

“Data visualization is a critical advancement that helps carriers and MGAs make better product decisions,” Marr continued. “Having multiple visuals in a solitary platform really helps the industry get a comprehensive understanding of a property and its unique set of risks.”