Three Ways Analytics Is Shaping General Insurance

New technologies have revolutionised ways of working, streamlined claims processes and led to the delivery of superior outcomes. Joe Powell, SVP of Analytics, explores how analytics innovation is shaping general insurance and the three ways insurers can utilise data-driven advancements to identify opportunities for lasting success.

The insurance landscape is rapidly evolving as technological advancements drive operational performance improvements for those who adopt them. Recent years have seen emerging technologies revolutionise ways of working amongst businesses, allowing insurers to streamline claims processes, make better decisions more consistently, and ultimately deliver superior outcomes.

Joe Powell, Senior Vice President – Gallagher Bassett North America, is spearheading innovation and analytics on a global scale. With his extensive experience and expertise, Joe is responsible for overseeing the operations of one of the largest claims databases worldwide. Currently, he is focused on identifying and analysing the significant trends in the insurance marketplace of Australia and New Zealand.

Recognised for his outstanding contributions, Joe was honoured with the prestigious Business Insurance's 2018 Break Out Awards. This accolade celebrates his position among the top 40 professionals who represent the next generation of insurance leaders. Additionally, Joe is a sought-after keynote speaker at various global industry events, where he shares his profound insights on analytics and data. His expertise in these areas makes him a prominent figure shaping the future of analytics in the insurance industry.

While the benefits of analytics innovation cannot be overstated, knowing how to leverage these tools for success is key. In this article, we explore how analytics innovation is shaping general insurance and the three ways insurers can use data-driven advancements to strengthen their processes and identify opportunities for lasting success. Namely, insurers can differentiate with analytics by:

1. Applying the latest in AI, automation, and machine learning to drive better decision-making and thus better outcomes at the claim, policy, and portfolio level.

Applying the cutting-edge technologies of automation, machine learning, and AI has revolutionized decision-making processes and paved the way for improved outcomes at the claim, policy, and portfolio levels. Let's take a closer look at how these technologies contribute:

• Automation streamlines the claims process by handling repetitive tasks and reducing errors and processing time. This frees up claims handlers to focus on complex tasks, improving efficiency and consistency while enhancing customer satisfaction.
• Machine learning based decision support tools provide underwriters and claim handlers with recommendations to improve the quality of the most important decisions that these employees make each day. Insurers and claim handlers with large claim portfolios and talented data science teams can train their own machine learning models to guide underwriters and claim handlers toward specific decisions around reserving, litigation avoidance, subrogation, settlements, fraud, and more. Best-in-class companies implement these models with feedback loops between expert decision-makers and the machine learning models — distilling the best of both machine and human knowledge.
• Generative Artificial Intelligence (AI) is a nascent but rapidly evolving field, as popularized by models like ChatGPT. Generative AI’s linguistic fluency holds tremendous potential for insurers looking to accelerate processes (e.g., document summarization) and ensure consistently high quality communications (e.g., chat with claimants and customers). Yet a rush to implement these models without due consideration of risks could end badly, as evidenced by the models’ tendency to ‘hallucinate’ falsehoods.

When building its portfolio of automation, machine learning, or AI applications, it is important that insurers and claim handlers consider which applications could drive the most significant impact on outcomes while minimizing risk.

2. Using the latest data analytics techniques to spot opportunities for continuous improvement across an insurer’s portfolio and sustained outperformance.

To achieve sustained outperformance in the insurance industry, utilising the latest data analytics techniques is crucial for continuous improvement. Analytics has become an indispensable tool for insurers to assess performance, identify excellence, and pinpoint inefficiencies in general insurance.

Digital risk management systems now have the ability to measure the performance of insurers and uncover untapped opportunities. These platforms take into account the intricacies of claims and provide a comprehensive evaluation of insurers' expected performance, establishing a benchmark for success. By leveraging these systems, insurers can compare their performance against industry standards, gaining valuable insights into areas primed for improvement.

With accurate performance measurements and the right tools, insurers are empowered to elevate efficiencies, streamline processes and enable data-driven decisions. This comprehensive approach empowers insurers to achieve desired outcomes, reduce operating costs, and maintain a competitive edge in the dynamic landscape of general insurance.

3. Adopting a world-class digital risk management system to ensure transparency into results, allowing insurers to validate that #1 and #2 above translate into the expected improvement in outcomes.

To support insurers to streamline claims processes and optimise performance, we at Gallagher Bassett have developed Luminos,

a cutting-edge RMIS tool that serves as our clients' window into our world. Gallagher Bassett’s mission is to drive demonstrably superior outcomes, and Luminos plays a vital role in achieving this goal. By leveraging Luminos, clients gain transparency into the outcomes we deliver for them. This industry-leading tool allows clients to visibility into their performance at a high level and valuable insights into their financial standing. Clients are able to track progress against performance goals, ensuring a clear line of sight to planned improvements. Any variation in high-level outcomes can be further analysed, with significant detail and explanatory power to understand root causes of any fluctuation.

Through the adoption of a world-class digital risk management system, like Luminos, insurers can ensure transparency in their results, evaluate their performance, identify areas for improvement, and make data-driven decisions to outperform their competitors. The ability to spot opportunities for continued enhancement across an insurer's portfolio is a powerful advantage in shaping the future of general insurance.

Keeping up with technology advancements and industry insights can be a challenge for many insurers. In fact, 70% of respondents in our latest whitepaper, “The Road Ahead” chose “Keeping up with technology advancements” or “Cyber Security” as the main challenge facing their businesses this year. Contact our team today and explore how we can help you utilise digital innovation to strengthen your processes and help identify opportunities for lasting success.