When XL Group acquired Catlin Group Limited earlier this year, the move created a top 10 global reinsurer with a leading position in many insurance and reinsurance specialty lines – and an organization with large data assets on which to build out new predictive modeling and analytics.
The companies’ combined dataset has created an opportunity for XL Catlin to be “be better equipped to serve its clients across a range of distribution channels and geographies with an enhanced suite of capabilities and products,” Catlin CEO Stephen Catlin noted at the time of the acquisition.
But XL Catlin knows much of its IT success depends on teamwork and talent.
Getting to know you, getting to know all about you….
Today, XL Catlin is using data analytics to better understand individual customer needs with insurance or reinsurance coverage – more so than competitors, it hopes. That is leading to the development of new underwriting tools to better serve those customers and to give the firm’s underwriters a leg-up. In this highly competitive space, any strategic advantage is especially welcome.
“There are forces that companies have limited control over. But analytics and other emerging technologies we think may represent a new green field opportunity for profits, profitability and growth,” explains Jay Rajendra, vice president of strategic analytics at XL Catlin. “For us, analytics gives us unique insights into our client’s and when we understand our clients better than our competition it also results in better strategies and better underwriting. All of that leads to better profitability.”
Neither XL Group nor Catlin Group was a stranger to data analytics. Both had individual histories of working with data analytics and understood its potential to increase efficiency and profitability. But they were somewhat unique in that sense as the insurance industry is not known for analytics superstars, Rajendra notes. And he has no doubt what it takes to truly succeed with data analytics – total commitment at all levels and facets of the organization – its operations, its people, and its culture.
“From a cultural aspect it’s really important that analytics is something that is embedded in the culture of the organization. It has to be valued, it has to be important to everyone in an organization – it has to pump through its veins,” Rajendra stresses.
Begins with Teamwork
That had been the approach at XL Group. Four years ago the firm “was one of the first in our industry to create a central data analytics team to drive insights throughout the organization,” Rajendra says.
The work started with the team assessing what data the organization had, where it was stored, who needed access to it, and how it could best be applied to existing business challenges. Rajendra was the fifth member to join XL’s strategic analytics team, which, since the merger, has grown to 20 staff with Rajendra heading the group.
“Part of the effort was around making the data available to analysts, and then the more important challenge was how you fit the analytics into all aspects of the business -- that it is aligned and has a really good fit with the operations, the people, and the culture of the business,” Rajendra notes.
Succeeding in that, the group now delivers a wealth of data trend analysis to decision makers in the organization “with the touch of a button.… Our business leaders can use that to develop evidence-based strategies,” Rajendra explains.
The result: “Analytics gives us unique insights into our clients, so we understand our clients’ risks better than our competition,” Rajendra explains. “Some of our biggest successes have been working with our business units to develop new underwriting tools, which have enabled our business units to make better decisions and improve profitability.”
But these results are not the end of the journey. They are the beginning, Rajendra points out.
The “Analytics Journey” as Rajendra calls it, is also the topic of his presentation at the Insurance Networking News’ analytics event, which will be held in Boston October 5 and 6 (http://www.insurancenetworking.com/conferences/insurance-analytics-symposium/). Subtitled “Getting from Here to There,” the session will offer real-life examples of how managers have successfully transformed their businesses and overcome barriers to change.
Building On Talent
So how does an IT leader infuse analytics into an organization’s culture?
It starts with assembling the right talent.
“We have a very diverse team, and that is intentional,” Rajendra notes. “We have a mix of people from the insurance industry and people from other industries because we thought that was important. We have people that have technical skills in different areas. Some might have a more technology leaning, more of a data engineering leaning, or more of a data science leaning. We also have people who understand business strategy as well as insurance strategy, and the people side.”
This combination has been a key to the analytics success with XL Catlin. Also vital has been the focus on truly exceptional talent, Rajendra stresses.
“Hiring and retaining the right talent is critical for our success and we want a diverse team that can deliver results,” Rajendra says.
“In our experience the key skills for a data scientist or a data analyst go far beyond the traditional skills. We look for people who are creative, who are excellent communicators and can collaborate in diverse cross-functional teams,” Rajendra continues.
“The use of analytics can help us grow profitably, and it can also help other insurance companies and other industries,” Rajendra concludes. “As a result, there is definitely going to be a shortage of analytics talent. We believe we’re well placed for hiring the best talent in the market because we offer the opportunities to work on high profile projects that generate huge impacts. Not many other companies can point to our success and track record.”
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