Is disruption coming to the property/casualty insurance industry? According to a new report from Novarica, five factors may bring change to the sector, with “Big Data and analytics” and “catastrophe losses” among them. Fourteen percent of respondents, according to the survey of 82 property/casualty and life insurers, identify Big Data and analytics as one of the top potential disruptors, and 11 percent cite catastrophe losses.
According to the survey, as reported in Insurance Networking News, carriers haven’t equipped their IT infrastructures to handle “massive amounts of structured and unstructured data,” yet they’re planning to rely on such information to gain an edge in the market. While there aren’t many projects currently in progress, the study indicates that many are in the evaluation and planning phase.
The opportunities available through software as a service (SaaS) — in which insurers transfer infrastructure maintenance and expense to a service provider — help address the need many companies have for a robust infrastructure. SaaS also can alleviate a considerable amount of internal IT risk. ISO ClaimSearch® houses more than 840 million claim records, providing the tools for full analysis to improve overall claims handling and identify and investigate suspicious activity.
As you think about your new Big Data initiatives in the coming months, keep in mind the advantages of SaaS. In particular, think about expanding your use of the industry’s all-claims database. In the second quarter of 2013, we’re preparing to release a new network analytics service that scans ISO ClaimSearch and uses predictive analytics to identify cases of potential organized fraud. (To learn more, fill out the form below.)
The Novarica survey respondents also expect catastrophe losses to prompt a reevaluation of how insurers can improve their understanding of exposures. That response isn’t surprising, given the effects of Superstorm Sandy. To help in the effort, Property Claim Services® (PCS®) has a total of eight catastrophe resurveys in progress (including Sandy). You can learn more about the PCS resurvey process in our most recent report on the catastrophe bond market.
With catastrophe losses expected to continue on their upward trajectory, the need for industrywide data for setting loss reserves, deploying adjusters, and improving capital management is both great and growing. When a catastrophe occurs, claims departments have a unique opportunity to demonstrate superior customer service, ultimately improving retention and generating word-of-mouth recommendations to prospective insureds. To help you handle the claims associated with a catastrophe, use PCS catastrophe loss bulletins to gain an industrywide view, benchmark your company’s performance against other affected carriers, and send your adjusters to the areas most in need.
Significant change is on the horizon — along with much opportunity.