For the January/February print edition of Carrier Management, we welcome Katey Walker and Ben Williams as guest editors of our features about the use of data and predictive analytics in the property/casualty insurance industry.
Walker, a Senior Director for Willis Towers Watson based in the Stamford, Conn. office, has 20 years of experience in the property/casualty industry as a consultant and in executive and senior management roles for top 10 insurance companies. She joined Willis Towers Watson in October 2018 from Pinnacle Actuarial Resources, where she served as Consulting Actuary focusing on Predictive Analytics. Prior to that, she was Assistant Vice President and Actuary for Specialty Pricing at CNA Insurance and a Senior Managing Actuary and AVP for Loss Reserving and Financial Reporting at Liberty Mutual.
She is a Fellow of the Casualty Actuarial Society, a Member of the American Academy of Actuaries and a Certified Specialist in Predictive Analytics from the CAS Institute.
An active member of the CAS, Walker is a member of the CAS Board of Directors. Her goals as a board member are to present new ideas, to challenge existing “it still works” practices and to build a more capable organization to add value to our industry.
Williams, bringing similar expertise but with a more international resume, is a Willis Towers Watson Director. He started in the position as a consultant with EMB Actuaries and Consultants in Spain and Portugal, which was integrated with Willis Towers Watson in 2011. Currently in the New York office of Willis Towers Watson, Williams was previously an Actuary for Liberty Seguros in Spain and for Allianz in Italy. Before that, he held various pricing and actuarial positions in New Zealand.
Like many actuaries, Walker and Williams have both seen their careers evolve from roles focused on insurance loss reserving and pricing to specializations in predictive analytics.
While there has been much discussion in the industry about data scientists encroaching on actuaries’ turf, the two editors believe that casualty actuaries, who have long served as the main interpreters of valuable information hidden in reams of data captured by insurers, are well placed to continue leading predictive analytics initiatives in the P/C industry—even as they start partnering with professionals singularly focused on data science who enter our industry from others.
“To further advance the insurance industry, actuaries and data scientists must form symbiotic relationships. Actuaries are essential for their extensive insurance knowledge and can provide deeper insights when partnering with data scientists,” Walker said.
“Actuaries have a tremendous industry knowledge and business acumen. They are insurance experts. The training and credentialing process for actuaries is rigorous and provides a superior foundational knowledge that is universally trusted by regulators and the public,” she added.
She also explained the CSPA designation. It was developed by the CAS Institutes to create a standard of qualifications in the Analytics space. This universal designation for both actuaries and non-actuaries signifies a level of expertise that will become a standard of excellence in the insurance industry.
What Does a Guest Editor Do?
Working as guest editors for Carrier Management, Walker and Williams were responsible for providing 16 pages of content—a lead article written by Walker, as well as articles contributed by outside authors they engaged to offer new perspectives and to spark innovative thinking about current and future uses of data and predictive analytics by insurers and reinsurers.
Walker and Williams responded to our invitation for casualty actuaries to serve as guest editors with articles that might seem far outside the usual territory covered by the actuarial profession, with insights on improving claims, underwriting and marketing functions, as well as to improve customer relations.
Walker’s article, addressing future data sources—including telematics and social media—that will tie insurance carriers closer to customers, explains that carriers are positioning themselves to help their customers mitigate risk as they compete on more than price.
“Insurance carriers must support the entire spectrum of customer relations to provide value and an improved customer experience—or risk becoming niche players,” she warned.
Other articles sourced by Walker and Williams give insights on how carriers can decode unstructured data with techniques like sentiment analysis and latent semantic indexing to assist their claims departments, or use machine learning and analytics to optimize commercial underwriting with fewer or better questions.
The uses of machine learning and analytics expand even further beyond actuarial functions. What about using machine learning to help claims departments sift through millions of URLs that “might” be relevant to a claim? Or analyzing the marketing communications of competitors to understand which customers and prospects are in their sights?
A final article, from Shane Barnes, an actuary heading data science teams at The Hartford, touches on a final non-actuarial function that will help bring all these possibilities to life: talent management. Barnes, explaining how The Hartford aligns data scientists with business teams, writes: “Data scientists who do not know how the business operates—from selling insurance to servicing a policy and paying a claim—cannot identify with the problem and will be hard-pressed to design the appropriate solution.”
Actuaries, however, who have been both immersing themselves in data and bridging gaps between analytical and real business problems for decades, are right in the center of the action as predictive analytics initiatives bring fresh insights to the industry in 2019.