Unlike most of the lifers in the insurance industry, and especially those who reach C-level responsibilities, Mark Showers, EVP and CIO of RGA Reinsurance, a life reinsurer, has been in the industry just four years. Previously he was CIO for Monsanto, an agricultural manufacturing company.
As a relative newcomer, Showers has an interesting perspective on the insurance industry.
At the Insurance Leadership Forum, “Insurance Underwriting In an Age of Data Super-Abundance,” hosted by L&T Infotech and moderated by Deb Smallwood, founder of Strategy Meets Action, Showers said he was surprised at the depth of the impact legacy systems have on insurers’ ability to leverage analytics. But more important, he said that insurers’ concerns not radically dissimilar from the concerns of CIOs in other industries.
“Coming from a whole different industry, what I continue to find is the consistency of our problems. They are all the same, and the approaches we take to solving them are pretty similar,” Showers said. “Getting the data linked together, getting the governance right, getting the quality of the data, finding people who can actually analyze it, and then figuring out how you monetize that analytics. Find something interesting that either helps you to improve pricing or underwriting. We are all doing them at different paces, but we are all trying to tackle the same thing.”
Showers offered that observation in light of the very diverse panel he sat on, which included Bill Madison, CEO of LexisNexis Risk Solutions, a data provider, Shawn O’ Rourke, CIO of Amerisure, a P&C carrier, Ramanujam Rao, VP of IT strategy and enterprise architecture for Asurion, an insurer of technology.
“In my mind, we had an amazing similarity in the focus and how you go about this,” Showers said. And in addition to the same needs driving the projects, all companies are grappling with the same challenges, such as where to draw the line between automation and human judgment, which he said likely will always play a role in underwriting.
Finding that balance between analytics overriding an underwriter’s decision, the underwriter overriding the analytics, will be critical.
“You may have a certain class where the analytics win, but you have predefined the checkpoint where you want to refer it to an underwriter to look at it," Showers said. "And so it’s not all one or the other, it’s both. It’s hard to imagine you would go truly 100 percent automated with analytics.”
As with any change management, setting boundaries is critical to the success of underwriting projects, he said. “People can see that this doesn’t make sense and the other doesn’t make sense; where’s the happy median?”
Having access to both internal and external data also is a game changer, for example whereas the perspective of insurers seemed to be ‘how many questions can one reasonably ask’ in the underwriting process, the question now seems to be ‘how few questions can you reasonably ask,’ given the availability of so much third-party data.
“[Co-panelist] Bill Madison said, if you find that you can impute the answer, then stopping that question on your underwriting form, which is an interesting point, I’m sure people are thinking about that. But the whole process is coming back to that: how does that change things… it shows how dynamic you can get: how few questions can you ask? Can I just ask you your name, address and social security number and now we can underwrite you.”
Chris McMahon is a senior editor for Insurance Networking News.
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