Big data and analytics are driving a transformation in insurance purchasing decisions, and insurance company chief risk officers are among those being impacted by the wave of change.
Executive SummaryInsurance carriers are not just using data analytics in underwriting and claims, according to Claude Yoder, head of Global Analytics at Marsh, who explains the growing use of analytics by the risk management function. Using the example of an insurance carrier evaluating the adequacy of D&O limits, Yoder explains that analytics are transforming enterprise risk management, giving insurance company risk managers tools to justify insurance purchasing decisions and evaluate capital adequacy.
Carriers are challenging their risk management teams to provide data-driven insight to support recommended insurance purchases and the cost efficiency of the coverage programs they recommend, along with assessments of underlying risk exposures, thereby ensuring that insurance program structures are appropriately aligned to strategic objectives.
As carriers use such information to fully understand the risks of implementing their business strategies, their risk managers are applying enhanced modeling, analytics and insights to their own insurance purchasing decisions. This dramatic industrywide shift toward analytics-based decision-making at every level is changing the way carriers evaluate their enterprise risk and execute their insurance purchases.