Taking Data Analytics to The Next Level
Paul Mang, chief innovation officer at Guidewire Software, explains how insurers can harness non-traditional forms of data and sophisticated automation to improve outcomes for customers.
Data analysis technology is accelerating and evolving at a rapid pace – and it is already transforming the insurance sector.
For several years, financial services companies have been talking about the transformational potential of ‘big data’ and artificial intelligence (AI).
At Guidewire, we know that this is already happening – and we want to help your business harness its power. For nearly two decades, we have been developing data tools for the insurance sector to help providers collect, store, and process customer data across P&C and small business lines.
Shaping the Data Agenda
Guidewire has established itself as the ‘system of record’ for a significant proportion of the insurance industry worldwide, working with more than 400 insurers worldwide. We are helping shape the data agenda across the insurance sector.
By harnessing the right data at the right time and putting it in front of the right people, we have already helped our clients make their underwriting and claims processes more efficient as the market-leading ‘system of record’. This helps ensure claims adjusters and underwriters have the right information in the right place at the right time. This in turn helps to reduce the variability of claims and increase the predictability of business operations.
Insurance carriers make hundreds of thousands of micro-decisions every day. Onboarding new customers requires dozens of decisions to be made about what the information they provide means for the price of their policy. Processing claims involves dozens more decisions about coverage, fraud checks, prorogation, and pay outs.
The way an insurer can make sure that a customer does better is by making each one of those decisions better. It’s not going to come about through one big insight or one big ‘eureka’ moment. That moment has to be translated into something tangible to help inform the decision on one customer.
In 2017, Guidewire bought Cyence, a leading data analytics company. Since then, we have been integrating its technology with our market-leading data platform – that ‘system of record’ – to bring new functionality to our clients’ core systems.
One of the key capabilities of Cyence’s technology involves the capture of non-traditional data from public and licensed private sources. This gives insurers a much greater depth and breadth of data from which to draw on when making decisions.
A System of Influence
Now, we want to go further in helping shape the data agenda for our clients and the insurance sector. We want to help insurers take the next step and turn this system of record into a ‘system of influence’.
To do this, we need to take our data analytics to the next level.
Many data companies will be able to process your data and present it back to you in a way that looks impressive in a presentation. As provider of a system of record, we know that processing huge volumes of data is not a trivial matter and requires significant investment into programming, staffing, security, and analysis. However, this only takes you so far.
Data analytics and insights form an important part of the insurance process, but they are nowhere near the end of the lifecycle. This is where our system of influence comes in.
For these insights to have a real-world impact, they need to be translated into a decision – and that decision needs to change an outcome. Only then will that analysis and insight have proven its value to an insurance business.
It’s time to make your data work harder for you.
At Guidewire, we are developing a smart data platform that can analyse the huge volume of data and information on our systems and brought in from other sources by Cyence’s technology. The analyses and insights from this data will then be applied to each claim or new policy that an insurer receives, presenting the adjuster or underwriter with not only all the data they need, but also a recommended course of action.
This system of influence will influence the assessment of claims and new business. It will make recommendations that are relevant for each decision insurance staff make, based on the facts and an assessment of the criteria. If the system is good enough, ultimately there will not be much of a decision to make.
We realise that, in the real world, insurance isn’t always that simple. Many decisions require a level of judgement that automated systems are not capable of making. However, putting the right comprehensive set of facts at the fingertips of the adjuster or underwriter at the right time will make that judgement much more straightforward. The quality of that judgement will be improved significantly by an industrialised, repeatable process behind it that can be improved over time.
Guidewire’s mission is not to automate every one of those hundreds of thousands of decisions that insurers make every day. Instead, we want to identify where they can be automated or improved – to make each decision that bit better.
Consistent data and reliable, repeatable decision-making processes will have far-reaching consequences for insurance companies’ efficiency. The benefits will be seen across the board, from the boardroom to the individual customer.
It’s time to make your data work harder for you.