I get to work with some very talented folks at Intermap Technologies on a Natural Catastrophe Risk product called InsitePro. It is a tool designed for underwriters that analyzes and scores location-based risk. With H.R.2901 - Flood Insurance Market Parity and Modernization Act - making its way through Congress, thus enabling the Private Flood Insurance Market to close the Insurance Protection Gap as well as alleviate some of the NFIP’s $25B debt load, we are seeing a growing interest in InsitePro. One reason for that interest is our U.S. flood model called FloodScope. It is derived from a seamless proprietary 5m elevation dataset and is both distinctly different from and more useful than FEMA’s FIRMs for evaluating flood risk at a single location. Here is the difference…
The problems facing private insurers are both many and well documented.
In a BenefitsPro article titled Insurers still coming up short on digitalization written by Jack Craver in November of this year, he stated, “One of the most common barriers to truly transforming the business via digital solutions is the persistence of legacy systems that employees continue to rely on instead of newer approaches. In fact, 80 percent say that while the organization is currently undergoing upgrades to their system, the implementation is hampered by fragmented leadership that conflicts about replacing legacy systems for policy administration and agency management.” And, in a PropertyCasualty360 article from the same month titled Top 7 Insurance industry concerns for 2017, author Jamie Yoder states his first two concerns as:
- The rise of insurance technology
There are several business challenges that established insurers are facing as they try to meet new customer needs while improving core insurance functions. A specific focus on insurance technology, or “InsurTech,” has emerged to help insurers solve these challenges.
- Artificial intelligence
The initial impact of artificial intelligence (AI) primarily relates to improving efficiencies and automating existing customer-facing, underwriting and claims processes. Over time, its impact will be more profound; it will identify, assess and underwrite emerging risks and identify new revenue sources…
Fabio Moioli, head of Consulting & Services at Microsoft offers this thought regarding Insurance: the very near future via LinkedIn, “All insurance companies need to create new smart, customer-centric operations. They must develop a strategic, digital-first approach, where internal and external data are constantly blended. They must enable improved risk insights, powered by machine learning. They can uncover new product opportunities, generated by IoT.”
The result? I guess it depends on the way you view risk (i.e. that of your own organization).
Is your own glass half empty?
Change is difficult. Complacency will kill. Maybe I’ll wait.
Or is it half full?
In an article titled ‘Berkley Downplays Effects of Trump, Brexit Elections; Remains optimistic for Insurance’ earlier this month in Insurance Journal where William Berkley of W.R. Berkley gives a more optimistic view as the keynote speaker at the annual meeting of the American Institute of Marine Underwriters in New York.
Here are 3 snippets…
• “This business will come back to disciplined pricing and underwriting skill…
• New and updated information continually come into play and let you make better and better judgements…
• We will be better able to assess the risks as the data accumulates. It’s really going to require a more data-driven approach to the business. It’s exciting and like everything else, we’ll all have to change.”
Water, water everywhere…here’s to a Better Data = Better Decisions = Better Profitability kind of 2017!