How big data drives insurance innovation and better experiences

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 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.
  
  

Technology is also creating easier access to more reliable data and speedier evaluation of risk.

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. 

As blockchain technology continues to mature, the insurance industry is poised to study and reap the potential benefits it creates – from automating and streamlining manual processes to eliminating the chance of errors and fraud.

For example, say a cargo truck is loaded with products and departs from the warehouse facility. Information regarding the value of the shipment, distance traveled, and route taken is automatically sent to the carrier’s insurer. Using that information, a premium is calculated to insure the shipment and is immediately debited from the company’s account. In this way, a blockchain solution supports a pay-as-you-go insurance program and facilitates billing and payment – all at once.