Editor's Note: This article is part of a larger feature piece on underwriting analytics; see Underwriting Analytics: Time for Action for more.
“For us, big data has quite a different flavor,” says Swiss Re’s Riccardo Baron, big data and smart analytics lead for the Americas. As a reinsurer, Swiss Re typically doesn’t have direct access to typical customer/consumer data, he says, but analytics technology is critical to the company’s underwriting of large and complex treaties, he explains: “On top of using analytics to understand the risks our clients give us, it also adds value in that it creates access to end-consumer data, needs and behaviors, and to brings it into our b-to-b business.”
Baron says his group is focused on monetization with two different areas of interest: evolutionary topics, where the goal is to increase operational efficiencies, and transformation. “This has to do with real disruption in our business, to the point that they could require a business model change,” Baron says. For example, machine learning and cognitive computing, Baron says, now are used to support underwriters in their decision-making process pertaining to risk, and loss estimation.
“In our business, 90% of the data is unstructured, and has always been unstructured, particularly in the legal treaties. Big data and analytics can help streamline the huge amount of text we process everyday. But this is just the process improvement," he says. "What we actually aim at is giving the underwriter better use for this data. We’ll allow them to take into account data that is not being considered and inform the writer of differences in taking a decision vs. another decision for scenario modeling.”
When those technologies were showcased internally, the older generation of underwriters was skeptical, Baron says. “The people in underwriting at my company are extremely risk-adverse, but this perception that you can eliminate an underwriting department in a company like Swiss Re is definitely not realistic. It might help reduce the more routine and boring work that the underwriters do, and it should actually empower them in a way.
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