The phrases “data is the new gold” or “data is the new oil” indicate data has become a commodity in the insurance industry, but how can insurers harness their data to make processes faster and more efficient?
Executive SummaryThree experts spoke at Carrier Management's May 2023 InsurTech Summit about how insurance underwriters can use data to find their niche and exercise a competitive advantage in a fast-paced environment. They said unlocking the value of data in underwriting goes beyond simple data collection and means underwriters need to develop a system for organizing and using their data to introduce new efficiencies. They warned against the dangers of collecting too much data, and explored the uses for AI in helping insurers sort data faster and free themselves up for more complex tasks. Ultimately, they said, underwriters that use data well are the ones that will stand out in the future.
During Carrier Management’s fourth annual InsurTech Summit earlier this month, a panel of three experts shared their perspectives on how data will continue shaping the insurance underwriting process.
“I think the gold really is in using all of that data — and the analytics — to turn it into valuable insights to be able to assess that risk,” said John Willemsen, U.S. head of Distribution at Accelerant, sharing how insurers can use this process to identify niches and competitive advantages.Changing Data
Jason Wexler, head of insurance underwriting at Procore Insurance Services, explained that while “everybody used to underwrite the same data” on insurance applications, new companies are now exploring third-party data and new data sources that enable them to become more specific and granular in their underwriting.
Previously, for example, underwriters would assess traditional flood maps provided by the National Flood Insurance Program to understand how close a location was to a river and determine risk levels. Now, with better data from satellites, elevations can be assessed. This can significantly shift the risk level of the underwriting assessment, Wexler said.