How big data drives insurance innovation and better experiences
As advanced technologies continue to fuel disruptive changes in many industries today, insurers are intent on leveraging the benefits of big data, also known as data analytics, to help improve everything from customer service to underwriting.
Here are three areas where the value of data analytics and technology is already fueling insurance innovation and better customer experiences.
- AI-based underwriting
Artificial intelligence (AI) is accelerating the technology revolution currently underway in insurance. In fact, according to one forecast, the transformative effect of AI and machine learning on the insurance process just can’t be overstated. As AI continues to evolve, the report concludes, it’s likely to shift insurance from the perspective of “detect and repair” to “predict and prevent.” In our connected world of big data and digital devices, for example, insurers already are leveraging usage-based information to better understand customer risks and coverage needs. This predictive data is inspiring new products, more tailored underwriting, and real-time service delivery. Consider a manufacturing facility where information from wearable-equipped employees and fleet telematics is connected to an actuarial database. Using AI algorithms, an insurer could calculate the business’s risk based on employees’ and vehicles’ activities, as well as the probability and severity of potential events. The benefits of a data-driven approach help both customers and insurers by:- Encouraging safety;
- Delivering more accurate risk assessments and underwriting;
- Helping to reduce claims costs; and
- Changing the customer-insurer relationship from reactive to proactive.
The bottom line? When first-hand data informs the insurance situation, the benefits can include better risk identification and underwriting evaluation and more tailored solutions
Proactive policy management via big data automation
Technology is also creating easier access to more reliable data and speedier evaluation of risk.
Liberty Mutual Insurance and its technology partners are harnessing this power of big data to more accurately identify account opportunities and develop proactive coverage solutions for customers. Through its latest relationship with Intellect SEEC, for example, thousands of third-party data sources – like court filings, industry data, and government records, – are analyzed and packaged into actionable information so underwriters can more quickly identify, underwrite, and service potential accounts. The result is a win-win for brokers and customers, providing:
An enhanced ability to understand each potential customer’s insurance service and product needs,
An ongoing window into an account to identify new needs, which can help to customize coverage options and solutions to meet changing risks.
With these deeper insights, Liberty Mutual can more quickly understand current and potential customer needs and create product solutions that help customers better manage their exposures.
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