Data: The final frontier

If you are from my generation, you would remember the first time Personal Access Display Device or Padds started appearing in Star Trek. The creators of the series were true visionaries and their vision was brought forward by Apple in 2010. Every time I hold my iPad – which is now a device that is more essential than ever, as it holds the connection to the world “out there” – it is a throwback to those episodes of the crew on the Enterprise.

This digital technology has fuelled accelerating shifts in consumer demand and competition from insurtech players. In the face of so many disruptive forces, it is important to be aware of the huge opportunities available for insurers.

Walking a mile in someone else’s shoes

For almost 20 years, Swiss Re’s online placement channel, SwiftRe®, has provided an automated, easy-to-use platform, available worldwide for our facultative reinsurance clients 24/7. It was digital before digital became a buzzword and in two decades helped more than 1,600 insurers by giving them a simple and cost-effective method of managing a risk portfolio. As we become more connected and client expectations continue to demand a faster turnaround, SwiftRe® keeps you one step ahead and gives you time back by binding risks in less than five minutes.

SwiftRe® reduces the cost of writing smaller to medium-sized risk portfolios (where the economics may be slimmer) by decreasing the underwriting effort substantially. Targeting new market segments is also less risky. For instance, if you were looking for a way to enter a new domestic mid-market segment, SwiftRe® offers a highly customisable reinsurance solution that reflects your appetite making sure you have a simple, low-cost channel to place such portfolios. 

Having efficiency gains also means increasing the transparency of your performance. As SwiftRe® captures all the data into a single platform, it provides a full picture of your portfolio to help you more easily steer the business. Ultimately, driven by the intrinsic desire for insightful and superior data, we constantly keep upgrading our quantitative capabilities from highly regarded sources to have better data. As we look into 2021, the journey does not stop and there are many more enhancements to come on SwiftRe®.

External data brings new perspective on markets and risks 

While an insurer’s internal performance data will still be a cornerstone for risk pricing, it is also always biased towards the specific focus on client segments written so far, therefore not telling the full story. The comprehensive view is extremely important when your goal is to expand into new markets and segments. For example, leveraging highly granular data on geographical factors that drive the motor accident risk allows us to obtain a view on the risk landscape in a region – even before writing a single policy in that region.

External data can also help understand the digitisation of vehicles. Sensors in various car components – from those inside the mirrors able to spot other cars to airflow meters in motor grills – are an example on how technology is affecting the price of cars. While such advancements in advanced driver-assistance systems have a positive impact on the insurance risk, they also increase repair costs. Detailed external data on prices of latest spare parts allows to understand those dynamics that often do not occur gradually, but rather more erratically. Such insights enable us to foresee corresponding claims inflation and put us in the position to proactively include it into pricing and portfolio steering.

Making the most of digital claims management platforms using machine learning

The real benefits from digitalising processes in the insurance industry are harvested, when the treasure chest is open using the right key: analytics. Embedding analytics from inception into digital processes truly optimises the value chain. We assisted in moving one of our clients to a digital platform for claims management. Such automation worked with a machine learning decision engine, built on existing rules, previously manually applied by the claims experts.

Thanks to the new solution, now fully automated, the client benefits from an increased data quality, reduced cost of manual intervention and increased customer satisfaction. In addition to digitising the processes along the insurance value chain and harnessing new data, analytics capabilities are key to harvest all benefits and win the market in the next decade.

Data enables us to explore new worlds. Space – the final frontier.

Jason Richards is head of casualty underwriting, reinsurance at Swiss Re

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