Baseball and Insurance: Don’t Make Early Assumptions About the Data

Although I touched on the sport in last week’s blog, since this week is the real start of the Major League Baseball season—despite the fact two American teams played in Japan last week (with a Japanese tech company’s logo on the batting helmets)—it’s time for my annual observation about analyzing data in different ways.

Since last season, the predictive analytics book Moneyball was turned into a movie and both Brad Pitt and Jonah Hill were nominated for Oscars for their roles, which should have excited data geeks. After all, when you can get Pitt to portray someone who believes in statistical analysis of data you’ve won half the battle, right? (He could do for actuaries what Julia Roberts did for paralegals.)

The benefit insurers have gained over baseball teams in the use of advanced statistical data is that pretty much all insurance companies believe there is value to be gained from the data. There are plenty of baseball executives and managers that only believe what they see on the field—even if they don’t always know what they are looking at.

As user-based insurance expands across the personal lines insurers—my agent tells me Nationwide will be coming out with a new personal auto telematics product this summer—it will be interesting to see how they interpret the driving data they receive.

I spoke with a friend about telematics a couple of weeks ago at the IASA Boot Camp and she said she was not looking forward to widespread use of telematics because she admits that she drives too fast.

The safe assumption is that people who drive fast are bad drivers. But what if, over time, the statistical data insurers accumulate through telematics leads us to findings that we didn’t expect.

Just as baseball managers continue to waste outs by having good batters lay down a sacrifice bunt with a fast runner on first base, will insurance companies continue to believe that those who have too many speeding tickets are bad drivers and that they don’t need telematics to prove such a belief is true—or maybe even false.

We shouldn’t be afraid of collecting more data; we should be afraid if we assume that new data always verifies old beliefs.  

So let that batter swing away with a runner on first base and let telematics tell us what the real factors are behind poor driving that leads to accidents and, inevitably, claims. We might all be surprised what the predictive analytics of that data tells us.

 

 

About the Author
Robert Regis Hyle, PropertyCasualty360.com

Robert Regis Hyle, PropertyCasualty360.com

Robert Regis Hyle is editor-in-chief of Tech Decisions magazine and technology channel editor for PropertyCasualty360.com. He has spent over three decades as a journalist for a variety of business and regional news publications including a stint with a weekly newspaper that he owned and operated. He has been with Tech Decisions since the magazine’s inception in 1999 and has written articles on virtually every issue and trend facing insurance IT professionals. Prior to joining Tech Decisions, he spent two years as editor of a sister publication, The Ohio Underwriter, where he covered insurance topics for the agency and carrier markets. He has spoken on insurance technology issues at various industry conferences such as IASA and ACORD LOMA and on a number of web seminars. He is a graduate of Xavier University in Cincinnati with a degree in Communication Arts. Hyle may be reached at rhyle@sbmedia.com

Comments

Resource Center

View All »

Making Coverage Letters Work for Your Clients

If you're a broker or insurance buyer with any length of service in the commercial...

Complimentary White Paper: The Compression of Workplace Time

How brokers and carriers respond to the compression of workplace time will create significant competitive...

The Changing Insurance Consumer: 6 Ways to Create Profitable Relationships

Today’s mobile and web-savvy consumers have new expectations when it comes to interacting with your...

Contractors General Liability Coverage 102

What is a prior work exclusion? Which option is right for my client? Why do...

Sign up today to get a 50% matching credit -...

Insurance marketing sometimes seems like it's a game of swings and misses, but we're here...

Guide: 5 Steps to Selling Cyber

Cyber risk and data security is on the agenda of every business owner and executive....

Citation Correlation

Do rigger and signalperson qualifications correlate with the cause of crane and rigging accidents? ...

Complete Guide to Electronic Signatures in Property & Casualty Insurance...

In property and casualty insurance, closing new business quickly is key. Learn how to leverage...

INSTANT ACCESS: Complimentary Sales Closer Questionnaires

Help property owners or managers compare your commercial residential property insurance coverage vs. the competition....

Determining Vacant Property Perils and Valuations

Are your clients fully covered for Vacant Properties? In this economic climate, your insureds may...

Agent & Broker Insider eNewsletter

Proven success tips and essential information to help agents and brokers grow their practice – FREE. Sign Up Now!

Advertisement. Closing in 15 seconds.