As our world becomes increasingly digital, leveraging new sources of data becomes an imperative for claims professionals. As an industry, we are doing well, but there is more data available to help us overcome challenges and capture new opportunities. We invited Pat Saporito to discuss how claims professionals can upskill in the era of big data.
The Role of Data in the Insurance Industry
We already know that data plays an enormous role in claims operations, underwriting and loss prevention. For example:
Actuaries use internal claims data along with traditional industry databases for pricing analysis to determine pure loss costs.
Underwriters use data to identify emerging loss exposures.
Loss control engineers use data to review the effectiveness of current lost control procedures or to develop new processes.
Claims professionals leverage data for service provider sourcing, benchmarking and performance management, fraud management and subrogation and recoveries activities.
But there is now an enormous amount of data generated outside the insurer’s organization. Accessing and applying this information is crucial for better operations and for a better bottom line. For example, when SUVs first came onto the market, turnover accidents were prevalent. Insurers used data sources outside of traditional public records and discovered that faulty tires were to blame. This data enabled them to pursue subrogation against tire manufacturers. Similarly, warranty data uncovered subrogation opportunities for fires caused by faulty dishwashers.
Most claims professionals are proficient at using internal claims data and shared industry databases. But they must “up their game” by adding new skills to use this external data to find solutions and to enrich insights even further.
Enriching Claims with Unstructured Data
Most insurers can tap into structured data sources easily. These include databases, spreadsheets and similar tools where the data is stored in an organized manner. But today’s challenge is accessing the vast amount of useful data residing in unstructured data sources like PDFs, images, videos and conversations. Consider these new sources of valuable data:
Google Images offers adjusters the ability to look at improvements to homes or to reveal whether trampolines are in the yard.
Drones can be used in lieu of investigators for inspections in hard-hit areas where it’s not safe to travel.
Car videos and cell phone videos offer “true” narratives on accidents.
SMS conversations and emails between claims adjusters and customers offer new understanding of customer behaviors and sentiments.
Understanding the Data
The challenge is the ability for your claims team to quickly collect or access data, understand its nuance, know when to apply it and make accurate decisions from it. Upskilling the claims workforce is a critical piece of the equation, but often neglected. Insurance carriers need to first create a talent strategy that identifies critical skills for the centralized claims analytics team. Every frontline employee needs the skills to leverage this new data currency in those everyday decisions and interactions that create value for the company.
Business value opportunities are endless if we evolve our data literacy and embed it into our day-to-day thinking. Carriers can instill an analytical culture which can help define evolving business questions to answer in order to improve the organization exponentially. It can make them think through not only the data they have, but that which they would like to have and where they can get it. It also helps them pragmatically think about how they can measure progress by defining new internal and competitive metrics. If we can make this fundamental change at the roots of our organizations, then we can build resilient companies that can handle the constantly evolving changes in our environment.
Webinar: Increasing Data Literacy in Claims
To learn more about upskilling the claims workforce in the era of big data, watch a recorded webinar where Pat Saporito reviews overall data and analytic trends, claims analytics opportunities and challenges and ways claims leaders can improve the analytics capabilities for their organization. You’ll learn about tools to better-frame analytic opportunities, discover ways to ensure data and analytics actionability and hear ideas to engage staff in claims innovation. The webinar can help claims leaders increase the capabilities amongst reps and supervisors to quickly absorb machine learning models and natural language processing outputs and put them into action to create results. *For webinar access, visit https://bit.ly/UpskillingClaims.
About Patricia Saporito, Founder & CEO, Saporito & Associates, LLC
Pat Saporito, CPCU, is founder and CEO of Saporito & Associates, LLC, a consulting firm that helps organizations innovate and improve business performance through data and analytics. Pat has 20 years of progressive claims field and home office claims experience. Her experience at leading organizations like Teradata and SAP have allowed her to apply and evolve her pragmatic approach in airlines, banking, consumer products, healthcare, insurance, public sector and utility industries.
She is the author of Applied Insurance Analytics, published by FT Press. She is a member of the Advisory Board for the Stevens Institute of Technology’s Big Data and Analytics Master’s Program and mentors InsurTech startups through the Global Insurance Accelerator.
Pat is a Chartered Property Casualty Underwriter and past president of the Society of Insurance Research, an organization for product developers and innovators. She has developed and taught classes on using data analytics in insurance and banking for ACORD, IDMA, Moody’s Analytics, RIMS and the Society of CPCUs, and numerous insurers and corporate clients.