There is no shortage of risk data, in our information driven world. So, how can we gather the data and get it to the right place?
There is no shortage of risk data, in our information driven world. The challenge is accessing it efficiently, harnessing its power and using the outputs to drive understanding and risk improvements. So, how can we gather the data and get it to the right place?
This question was brought home to me on a recent trip to Madeira which is both beautiful and verdant. But here’s the thing, the rich, green landscape isn’t that way by accident. In the north there is no shortage of water, the reverse is the case in the drier south. However, an ingenious water system of Levadas delivers water resources exactly where they are needed. The channels date back over 500 years and stretch some 1350 miles. The result is lush vegetation, agriculture, and even hydro-electric power.
The Levadas are a simple, elegant solution to getting the resources to the right place. There has been a similar conundrum in the risk world. Until recently manual collection and distribution of data meant that the ‘water carrying’ was a slow, inefficient and labour-intensive task. This challenge is magnified in large geographies like the United States and Australia. However, by combining technology with the skill of experienced professionals this no longer needs to be the case.
Three drivers enabling risk professionals to work smarter not harder
1. Real-time information – as little as five years ago manual surveys were the norm, which was both time consuming and inefficient. As a result, our research shows that only 2% of business risks are surveyed. However, with the greater use of technology 24/7 data gathering is a reality. As are the outputs and insights that are revealed. Learning is no longer a static process, or worse something viewed through a rear-view mirror. Also, risk professionals are being freed up to use their skills more productively. Further developments in Artificial Intelligence (AI) and machine learning will increase the speed and ability for us to act now rather than retrospectively.
2. Internet of Things (IoT) – with the drive to connect everything from domestic appliances to industrial and manufacturing machinery to the web there are huge opportunities to monitor what is happening and identify problems before they become claims. An example of this is an Australian supermarket chain who have sensors on their refrigeration units. Rather than send engineers far and wide to conduct checks they receive alerts when a failure is expected. Rather like the Levada system, engineers go precisely where they are required.
3. Risk ownership – there is a desire from stakeholders to own the risk space. Underwriters seek improved loss ratios and Claims teams want fewer incidents. Risk surveyors want to use their time and experience effectively where it can have the most impact. Clients want to get on with what they do best without their businesses being interrupted. There is a collective vested interest in continuous improvement driven by risk insights. As an industry we need to match this desire by providing benchmark data on best practice to help clients. A good example of this was an insurer who invited thousands of solicitors to engage in a professional indemnity risk survey. Their responses were rewarded with a personalised, real time risk improvement report. It will come as no surprise that the insurer saw a marked improvement in loss ratios. A virtuous circle where every stakeholder could benefit.
If you would like to know more about how Risk Solved can help you transform your risk data and drive underwriting profitability, please get in touch now.
About Lawrence Caley:
Lawrence is a Non-Executive Director for Risk Solved.
During his years at Aviva he gathered experience in Underwriting, Marketing, Scheme Management, Finance and IT. In his final twenty years he was responsible for all aspects of Broker Software House management;-contracts, budgets, technical team management and market software delivery,
Lawrence also represented the Aviva on a number of Industry committees and bodies, including chairing Polaris' Electronic Trading Practises Group and the Electronic Trading Insurer Group.
Leaving Aviva in 2009 Lawrence joined Insurance Initiatives Ltd and played a key role in developing the Industry’s leading data enrichment platform, helping to architect the infrastructure and processes to enable the UK’s General Insurers to benefit from real time data enrichment which enhanced the customer experience and reduced insurance fraud.