Data has become the lifeblood of most businesses – an essential tool for unlocking savings, improving efficiencies and ensuring longevity. For the insurance industry, it is an integral part of how firms operate, yet the sector has not changed the way it uses data, even as more data, and more types of data, become available. “There’s little effort made to do anything other than traditional things with traditional data,” says Charles Clarke, global vice president of analytics at Guidewire.
The handling of analytical tools is similarly stuck in a bygone era: businesses hire vast teams of engineers to wrangle analytical insights, but still these tools remain detached from the coalface where they are most needed and necessary. Analytical solutions are frequently brought into companies at year end – and at great expense – to handle one-off analyses of data that are quickly forgotten once the annual renewal process ends.
Too often, insightful data is misused or not used at all. And other, very powerful data sources, are overlooked. “The industry majors on property data, minors on casualty data, and often misses data that describes intangible assets like reputation and IP,” says Clarke. Missing these intangible elements is a concern, he explains, because the insurable world is morphing as macro trends force change – like the shift from PAYE to gig work, remote working due to the pandemic, and autonomous driving.
Clarke suggests that, rather than treating data and analytical tools as resources to be leveraged occasionally and only by back-office experts, both should be available to and used by everyone in the organisation. The insurance industry runs on knowledge, so every insurance worker should have access to informative data and easy-to-use analytical tools.
This is the mission of Guidewire, says Clarke. “We want to turn every system of record into a system of insight. We are embedding data and analytical insights into core system workflows so everyone has instant access to the information and can subsequently make smarter decisions that improve business outcomes. What we deliver is like really, really advanced plumbing for insurers, brokers and reinsurers.”
Data should be thought of like a strategic adviser, argues Clarke. “Insurance companies need to think carefully about what they’re gathering data for – and why they use it,” he says. Of course, he recognises that this is easier said than done. Data is a capital-intensive industry if not done right, and the barrier to entry is high. “Legacy core systems and infrastructures aren’t set up to leverage real-time data from disparate sources,” says Clarke.
But Guidewire’s data and analytical tools can help. The company facilitates and administers billions of transactions each year in the US alone – all of which can be infused with analytical insights to improve outcomes. “We have a cloud-native insurance platform that is upgraded continuously and features integrated core systems, data and analytics, and digital capabilities,” says Sumeet Johar, vice president of analytical advisory at Guidewire. “Our platform allows insurers to think about how to unlock the reams of data that are generated, instead of letting it sit in a data warehouse somewhere, unharnessed and unanalysed. Take usage-based vehicle insurance: companies can take electronic data feeds from cars that inform insurers about drivers’ driving behaviour – and therefore more accurately price that customer – but they can only do this if that data is available and actionable in the company’s core system of record.
“Our system of insight allows data and analytical outputs to be at the fingertips of claims adjusters and underwriters, rather than locked away in the back office,” says Johar. “It allows underwriters to make decisions based on a breadth of real-time data and analytical assessments without opening another screen or leaving their desktop.”
But it’s not just insurers that benefit: it’s the industry as a whole. “What is particularly exciting at the minute, is the realisation that others in the industry, like brokers and reinsurers, want to join us on the journey of transforming systems of record to systems of insight as they transform their own revenue streams,” says Johar.
For more information, visit guidewire.com