Property and casualty insurers have always masterfully commanded data and analytics in the daily course of their operations. Information, after all, is the cornerstone in building a successful business which must simultaneously identify real risks faced by clientele and profitably insure against them.

However, that is not to say that existing operational analytics are enough to improve underwriting results and create new revenue streams in the face of a tough economic climate, increased competition, shifting regulations, and lagging organic growth. For obstacles this challenging, property and casualty brokers must supersize their data and their analytics to overcome them.

Supersizing the effort is commonly referred to in technology circles as “big data.” The moniker is a bit misleading as this new line of analytics and data use has less to do with the size of the data than it does with the depth, breadth and precision of the data mining. And if there is anything of top importance to P&C brokers, it is precision in the analytical results.

It all starts with analyzing all existing data, not just in-house data and not just slices of data but the whole kit-and-caboodle, in new and more thorough ways.

“US property/casualty insurers have access to a rapidly expanding volume of data from transactions, claim histories, social media connections, internet searches and GPS-type devices,” according to an Ernst & Young report on the industry titled “2013 US property/casualty insurance outlook.”

“A competitive advantage exists for those insurers that are capable of capturing and analyzing this wide-ranging data, integrating it with existing data and thereby developing new views of the business that guide innovative approaches,” the report states. “Insurers have the opportunity to integrate and leverage these data capabilities across the entire value chain, from distribution and underwriting to customer service and claims.”

One example of how increased and better data coupled with more powerful and real-time analytics can change the P&C profit picture is vehicle telematics. From readily available data streams provided by third parties such as OnStar and BMW Connected Drive to insurers' own telematic tracking boxes such as Progressive's Snapbox and Allstate's Drivewise, real-time machine data renders the most accurate risk assessment based on actual user behavior. And it does so in real-time and continuously.

ABI Research said subscriptions for driving-monitoring devices are expected to grow from nearly 6 million at the end of 2013 to 107 million in 2018. That is an indicator of a developing and very serious competitive edge for those insurers who are collecting and using the resulting data.

But vehicle telematics is only the tip of the iceberg in the rich data P&C insurers can now access, analyze and use in myriad profit-building ways.

“Insurers are likely to experiment with product design, led by the pioneers in pay-as-you-go telematics,” according to a Deloitte P&C industry outlook report. “Some will invest in predictive modeling capabilities to conceive new lines of business and products that cover emerging risks. Services can be enriched with mobile and online capabilities that take a customer across the insurance cycle for real-time sales, monitoring and service.”

“Carriers should begin to benefit from ever more advanced analytics, as they transform existing processes and technology to achieve a 360-degree view of each customer,” the Deloitte report states. “Those that accomplish this innovative strategy are more likely to realize competitive advantages from cross-selling and subsequently attain the 'stickiness' that carriers strive for in customer retention. Advanced analytics can help micro-targeting of segments and facilitate cross-selling opportunities. It will also significantly improve the accuracy of fraud detection through real-time analysis of structured and unstructured data.”

P&C brokers too need to use big data tools to get a 360 degree view of customers in order to cross-sell and retain existing customers, increase referrals, and efficiently and effectively find new prospects. New business user data desktop tools are invaluable in aiding this work at the agent level.

“Data literacy throughout the organization is of utmost importance to a company's ultimate success,” said Tony Salvador, researcher and sociologist at Intel.

Special Reports /

Supersize Data and Analytics to Improve Underwriting Results

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