Making digital insurance a reality
Day three of the IASA Educational Conference and Business Show featured more than a dozen technology breakout sessions covering various topics in insurance. Following is some expert insight on analytics, agent distribution and data security.
How to become a data-driven insurance company
Top-level executive commitment is the biggest key to an analytics culture taking shape at insurance companies, according to Peter Bothwell, advanced analytics and BI executive at The Hartford.
Admittedly, it is very difficult to convince CEOs, COOs and CIOs to forgo traditional underwriting and claims practices in lieu of one centered on analytics, he said. For those industry professionals wanting to make the shift, it’s best to start with “beachhead initiatives,” or short-term projects, that are incrementally important to their businesses.
“Complete a project first and show execs the business value,” he said, during a discussion with Verisk Analytics’ VP of strategic data pperations Tracy Spadola.
The projects will likely be done “underground” with a few colleagues equally as enthusiastic about big data, Bothwell added. Also key is creating a unified in-house analytics community early. Too many insurers have separate factions for analytics and data. But a strong analytics community works together and sits together.
“Water cooler conversations are just as important as meetings,” he concluded.
Delivering the ‘right’ customer experience without compromising data security
Top cyber threats insurance companies face today include denial of service, ransomware and malware attacks, according to executives from The Columbian Financial Group, Midwest Employers Casualty and third-party vendor SPLICE software.
But it’s phishing that keeps Columbian CIO Jordan Baugh up at night, he says.
“Our agents, aged 30 to 85, use mobile devices and assume they’re secure. But they’re not,” said Baugh.
Customer expectations of receiving policy data instantaneously only adds to carriers’ troubles in finding the right balance between a great UX and proper data protection, panelists said.
Midwest Employers’ approach is to avoid catering to those customers that want to bypass punching in passwords or authentication codes for quicker access.
“You have to educate your customers like you do your staff to make sure they understand why it is so important to protect information,” said Matthew Foerst, Employers VP of IT. “They’ll end up wanting to protect the data as much as you do.”
Drawn to distribution: Cool kids want to be agents
With so many insurtechs entering the fray attempting to re-invent distribution, there’s one logical historical comparison that comes to mind for Susan Labarre, Liberty Mutual’s director of agency automation & quoting.
“I see it as the Wild West meets the California gold rush,” she says. “There are so many entrants trying to capitalize on the shopping behavior of millennials.”
Labarre keeps a spreadsheet of insurtechs documenting what they do, where they are based and what they are trying to achieve in insurance. Her list is up near 125 companies.
“I’m only concerned about those in the P&C commercial side,” she said during a panel discussion with Marie-Christine Razaire, property underwriter at Validus Group and Allan Egbert, co-founder of Ask Kodiak, a commercial insurance search engine.
Startups put pressure on insurers and agents in particular to embrace new technologies more than in the past. But, the independent agents’ days are not numbered. Even agile insurtechs following direct-to-consumer approaches face hurdles to success, Labarre says.
“What happens two years from now when [customers] realize they didn’t get all the coverage they needed?” Labarre asked. Commercial lines is a particularly complex line of business, she explained, noting that inexperienced companies could "crash and burn."