More Niches Uncovered: Specialty Insurers Poised to Gain From Analytic Advances

This article is part of Carrier Management’s series on the Future of Insurance.

Jeff Richardson, Senior Vice President, OneBeacon Insurance Group, sees a particular opportunity on the horizon for specialty carriers as the flow of big data and analytics increases.

Jeff Richardson, Senior Vice President, OneBeacon Insurance Group

Jeff Richardson, Senior Vice President, OneBeacon Insurance Group, is accountable for the company’s Entertainment, Government Risks and Technology businesses.

Q: What major changes do you see on the horizon for the property/casualty insurance industry in the next 10 years? What will insurance companies, insurance leaders, the industry and its workforce look like in the next decade? What risks will they insure?

Richardson (OneBeacon): People will continue to be our industry’s future and consequently must be today’s priority. From actuaries to underwriters and all the job descriptions in between, it is imperative that we replace this aging workforce with our future employees. By attracting, training and mentoring top talent, we can confidently prepare for ongoing innovation and best-in-class experiences for delivering our products, servicing our customers, handling claims and so on. Furthermore, as technology continues to change the business and our tools, we need to ensure that our future workforce is technology-savvy and adaptable to continually evolving business operations.

Niches within the industry will become even more focused as analytics allow the industry to “slice and dice” into micro-segments.

With “big data” becoming available at an unprecedented rate, the challenge for the insurance industry is how to best gather, decipher and utilize the information. The ever-increasing flow of analytics will only benefit those insurers that remain diligent in separating noise from actual breakthrough findings. And it’s important to recognize that technology will drive both good and bad decisions in the industry, so maintaining a disciplined underwriting approach and sound risk selection is still the key to bottom-line success.

New technologies will change what and how we insure things such as self-driving vehicles, on-demand risks and yet-to-emerge exposures. The ability to achieve good results through better risk selection derived from data is a particular opportunity for specialty carriers to become even more specialized. Niches within the industry will become even more focused as analytics allow the industry to “slice and dice” into micro-segments. Ultimately, insureds will gain a better understanding of what risks are driving their insurance costs, which will facilitate pricing discussions.

Q: How will insurance products and services be distributed?

Richardson (One Beacon): The emergence of the gig economy and sharing experiences will prompt an expectation for the industry to deliver products that better resonate with customers. Expectations for niche coverage “when I need it” and only for “however long I expect to truly be at risk” will reshape the insurance experience. From flexible policy periods to mobile technology to on-demand risk advisers, the paradigm is evolving, which makes this a particularly exciting time for our industry and our potential.

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