Speaking on Zurich Insurance Group’s financial results for fiscal year 14, George Quinn, chief financial officer, remarked that the company intended to improve profitability with a relentless focus on underwriting and efficiency for the next two years. That’s a message that Peter Hahn, head of predictive analytics for the insurer, is tasked with making real.
“Our mission is to help our customers better understand and protect themselves from the risks,” Hahn says. “Having insights into these risks also helps us to improve the business decisions we make, particularly in terms of underwriting and pricing.”
Zurich has been investing in predicative analytics for commercial insurance over the past six or seven years, he says, and Zurich’s investment has accelerated over the last 18 months. “We see it as a critical capability,” Hahn says.
Internally, Hahn says Zurich makes no distinction between big data and predictive analytics capabilities. “Our people group those topics together. In some areas it would splash more big data; in others more analytics — but the touchstone is that we are focused on generating actionable, distinctive risk insights.” Hahn is guarded about specific use cases, however, offering only that they are focused on front-line underwriters, and enabling them to consistently use and execute on predictive models and risk insights.
In North America, Hahn says weather and geospatial data sets have become much more accessible, expanding the volume of data elements available to better understand risks, particularly for commercial property.
“We are big fans of the Open Government Initiative and Data.gov,” Hahn says. “And, we appreciate the data sets that have become available from NOAA.gov [National Oceanic and Atmospheric Administration], for all the weather related data, and from U.S. Geological Surveys for the geospatial data sets,” Hahn says, adding that the combination of that data with municipal building data sets, which are available from individual counties and cities, enrich Zurich’s risk assessment of any given property location, and then can improve underwriters’ decision making.
“Data and analytics are a core capability for Zurich,” Hahn says, but they are not the only factor in Zurich’s success. “There is, and always will be, a human element to commercial P&C, and what that means is that adoption and consistent execution on our models and insights by the front line underwriters are critical,” Hahn says.
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