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How to extract more value from auto insurance underwriting data

Insurers are the original “big data” consumers, always pursuing more granular views of risk. However, competition and growing digital information sources demand that auto underwriters also focus on cost efficiency.

Insurers are the original “big data” consumers, always pursuing more granular views of risk.

Accuracy is crucial, but so is maximizing the value of underwriting data.

Deep, high-quality data powers decisions that can help auto insurers compete more effectively. Innovation strategies around accuracy are crucial, but innovation can also extend to maximizing the value of underwriting data.

How can auto insurance leaders make sure they get the most out of those ones and zeroes? Here are five how-to’s:

1. Change the economic formula via speed and scope

Expanding the use of scalable technologies can lead to more seamless workflows and make critical customer and policy data more accessible to enhance products and improve processes.

Efforts to streamline auto insurance underwriting have become easier with data translators, accelerators, and single-point-of-contact application programming interfaces (APIs) such as Verisk’s LightSpeed® platform for personal and commercial auto. Simplifying processes to contribute, ingest, and manage first- and third-party data can change the economic equation. Working with a strong innovation partner that delivers analytical insight can speed up reactions and increase return on investment.

Insurers can extract more value by expanding the scope of underwriting data usage

Likewise, insurers can extract more value by expanding the scope of underwriting data usage. Consider:

  • How to use the same information in multiple ways where and when it makes sense
  • Processes that can support real-time underwriting and pricing decisions
  • Optimizing smart data purchase decisions
  • Leveraging total value across the policy life cycle

2. Tap into powerful insurance-ready analytics

A quality analytics provider can harness predictive analytics for granular risk micro-segmentation to help speed workflows, boost profitability, and avoid adverse selection. Consider the quality of the information feeding the analytics and how those analytics are packaged in an insurance-ready format.

For example, Verisk’s DrivingDNA® Score can help support more precise segmentation and pricing with multisource telematics data, yielding a granular view of driving risk at the point of sale. Leveraging this data can result in a 12 times target-variable lift between top and bottom segments. Another benefit is how quickly the driving score can be brought to market. Since the score, rating factors, and rules are filed with most state regulators, it may be possible, depending on the state, for customers to have a telematics program online relatively quickly.

Verisk has numerous examples of insurance-ready analytics, including the Inflection™ Credit-Based Insurance Score. Plug-and-play, verified prefill keeps insurers ready to confront premium leakage with information, such as commercial auto firmographics, that deliver critical data on industry classifications, credit scores and years in business. And Verisk insurance and actuarial consulting services can help tie data, analytics, and technology together across the business, including assistance with rating, pricing, reserving, and expansion strategies.

3. Build on deep and granular underwriting intelligence

Speed alone won’t get the job done. Top auto underwriters gain competitive advantages by understanding their true exposure, tapping innovative and robust contributory and proprietary information, and employing predictive analytics, artificial intelligence, and machine learning.

The key is connecting critical underwriting data and risk points for every vehicle you insure—accurately.

Verisk’s innovative auto solutions can help insurers achieve profitable growth and maintain the health of their book of business across the policy life cycle

Verisk’s auto solutions can help insurers achieve profitable growth and maintain the health of their book of business across the policy life cycle.

4. Cut costs without sacrificing clarity

Cost-efficient risk indicators are an innovative solution to help contain underwriting expenses. They can be used in front of an insurer’s full-report ordering workflow as part of an ecosystem of smart expense management.

For commercial and personal auto insurers, Verisk has pioneered risk indicators as unique solutions to trim the millions of dollars insurers spend on unnecessary underwriting reports. What if you could move data forward in your quote flow and focus underwriting spend on drivers you know have recent adverse activity on their records?

Accelerating Competitiveness With A Digital Auto Insurance Ecosystem

Target your report ordering to spend pennies on the dollar:

5. Optimize value with a digital insurance ecosystem

The foundations of a digital insurance ecosystem depend on strategic partnerships that complement your core strengths with resources and technology. Plug-and-play solutions can help your business be more resilient and help you embed insurance offerings anywhere and react to on-demand market changes. 

Look for an ecosystem partner that…

  • Delivers high-quality solutions across the policy life cycle
  • Plugs you into interconnected and innovative data sources
  • Leverages scalable technologies that optimize IT capacity and streamline processes
  • Features enterprise licensing and brings overall value to help optimize your spend
  • Digs deeper and helps drive your strategic vision to the next level

A strong digital insurance ecosystem can help accelerate competitiveness and profitable growth in numerous ways.

Innovation Strategies For Auto Insurance Underwriting

To learn more about how to embrace these steps, download the new Verisk white paper, Innovation Strategies for Auto Insurance Underwriting: Accelerating Competitiveness with a Digital Insurance Ecosystem.

Download the white paper

Dorothy Kelly

Dorothy Kelly is Vice President of product management for ISO Personal Lines at Verisk. She can be reached at dkelly@verisk.com.

Diane Injic

Diane Injic is director of ISO Commercial Auto Underwriting at Verisk. Reach her at Diane.Injic@verisk.com.


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