Last week OneAdvent CEO, Tim Quayle, joined a panel discussion hosted by Mike Keating, CEO of the MGAA exploring the role of AI and data in a soft market.
The insurance market continues to weather a period of softening, although there are marked distinctions in the degree to which this affecting different lines of business. Despite the challenges that this market brings, opportunities remain. As Tim commented during the panel discussion “pockets of good rates can still be found for niche products that sit within sub-classes of business and which may have struggled otherwise.”
However, alongside these opportunities lies a clear warning. The panellists cautioned that firms must not repeat past mistakes and, instead of concentrating on top line revenue growth, they should focus on making underwriting discipline a priority.
Using AI and Data
AI, when used well, can create a meaningful strategic advantage. One powerful use case is applying it to review areas of profitability to drive business choice.
MGAs are in a unique position to take advantage of AI. Their niche focus on a particular line of business means the data they collect tends to be cleaner and more consistent. This enables AI to better understand the nuances of individual risks. In turn, the inherent flexibility built into MGAs, means they can make changes quickly and be proactive.
AI is able to support both insurance-specific and non-insurance tasks. Its role in taking on the more repetitive and mundane tasks within a process, for example by removing the need for double and triple re-keying, will not only lead to a better quality work life for employees but also greater profitability for firms who are putting this technology to effective use.
Most importantly, AI is there to support and not replace people. The human element remains critical.
The Data Challenge
The panel went on to discuss how the majority of firms are still grappling with unstructured, inconsistent data, making analysis difficult. A recent survey from Dun & Bradstreet with UK insurers and brokers revealed only 29% “felt equipped to make informed business decisions based on the data they currently hold”. Tim commented “every single data point must be captured in a structured way now”. He went on to say that such information may not be needed at this very moment but could be invaluable in the future. He also emphasised there was no excuse not to do so as flexible data storage and existing technology means that it can be kept securely and indefinitely.
The panel agreed what firms need to take into consideration is where they want to be and then what role AI can play in taking them there.
Technology can also be used to try to future proof data. Firms that integrate/build systems that can produce high-quality data and use AI to anticipate changes in said data will have a significant competitive advantage.
Role of Brokers
The discussion then turned to brokers, with some of the panellists arguing that they have a meaningful role to play in improving data quality. Tim responded that he was “a bit more cynical about brokers,” noting that many may continue doing things the way they always have. Old habits, it seems, remain a challenge.
Looking to the Future
In a softening market firms are looking to balance underwriting discipline and profitability. By applying AI smartly and effectively and ensuring all data points are captured in a consistent way, firms will be able to ride out this softening market and be prepared for the future.
Thanks to Tim’s fellow panellists Naz El-Sayegh, VP of Sales at Unitary, Matt Chaplin, Commercial COO at AXA UK and Gavin Lillywhite, SVP, Operating Leader UKI and Europe at Xceedance.
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