Data and analytics capabilities are becoming increasingly important ‘table stakes’ in the property and casualty sector across Europe, North America and Asia, according to a session at the Barbados Risk and Insurance Management (BRIM) conference.
Speaking at the session ‘Next generation insurtech: predictive modelling and artificial intelligence (AI)’, Klaas Stijnen, co-founder and chief product officer at Montoux, cited NewVantage Partners’ 2022 Big Data and AI Executive Survey, which found that although investment in data and AI initiatives continues to grow, achieving data-driven leadership remains an elusive goal for most organisations.
Similarly, the survey found that although the take-up of AI initiatives is accelerating, the actual implementation of AI into widespread production remains low.
Stijnen outlined that a data analysis-driven approach is led by data scientists, in which the focus is on available, known data and is separate from the decision-making process.
Alternatively, a decision-driven approach is based on data science, which more readily challenges bias to seek missing data and is integrated into a firm’s decision-making process.
Therefore, the transition to becoming data-driven requires an organisational focus on cultural change, Stijnen said. He observed that actuaries are increasingly interested in automation and decision science — now, they just require a working example of how best to embed decision science culture, technology and processes.
This also involves ‘inverting the actuarial pyramid’. Stijnen explained that the limitations of legacy systems and processes limit actuaries from delivering strategic insights or developing, monitoring and ensuring quality, as their time is primarily devoted to operational and production tasks.
Developing the actuarial function through workflow automation can further strategic value and provide actuaries with access to data and decision science capabilities, Stijnen added.
An example of how data and analytics is being employed to change the traditional approach to underwriting is best demonstrated in the expansion of digital healthcare. This was discussed in a separate session at the BRIM conference by Robert Panza, healthcare underwriter at CFC Underwriting.
Panza noted that digital healthcare is being employed on a wider basis owing to appointment backlogs and lack of providers from the COVID-19 pandemic.
In addition, the COVID-19 pandemic highlighted the need for mental health services, as the ongoing effects of pandemic include isolation, loss of income, fear of unemployment and bereavement.
While the ability to access specialty providers was historically limited owing to lack of providers and geographic location, virtual access spurred by the COVID-19 pandemic has demonstrated the speed and convenience of digital health for both providers and patients.
AI can be employed to triage patients to ensure they are referred efficiently to the correct provider, in a system that prioritises patients that are most in need.
Panza added that significant growth in the digital health space has seen a rise in intellectual property claims, relating to copyright infringement and theft of trade secrets.
With this increasing competition and complexity, it is crucial that insurance considerations include exposures to loss stemming from multiple channels. Panza concluded the session by highlighting the advantages of a bespoke policy form that encompasses the bodily injury, technology, intellectual property rights, product failure, cyber liability and general liability exposures in the digital healthcare space.
