Verisk brings together analytics and data from across insurance, energy and payments covering areas such as fraud, catastrophe risk and loss.
In this week's episode Matthew Grant talks to Mark Anquillare, COO of Verisk about how the company supports innovation within its own companies and through partnering with third parties and some of the latest trends it is seeing.
Making the World Better, Safer, and Stronger - Episode 78 Highlights
Can you share more of the strategy at Verisk? How are you thinking about the future of insurance and data and analytics?
From the Verisk perspective, we are looking at the entire lifecycle of the insurance transaction. We believe that insurers want the ability to seamlessly integrate with their applications and other third parties.
We insert data and analytics to help them with pricing their selection of risks and are always are looking for some proprietary type of data that would be unique and helpful. We've always attempted to be deeply embedded to help our customers with those key decisions.
How big is Verisk now? What sort of metrics have you got around revenue and people?
We are an S&P 500 company worth about $25 billion. We do over $2 billion of revenue, with the majority of that being in the insurance sector.
We're also focused on the cards and payment space and we work with oil and gas companies around underground assets and the reserves associated with oil and gas investment. We provide strategic information for their decision making.
How are you using data to help those oil and gas companies?
We have information that helps oil and gas companies identify where they want to do their own discovery. We've used that data to help insurers with underwriting those types of risks.
All the property characteristics about onshore and offshore wells and the characteristics about the risks of those types of businesses, are now also included in an energy writing platform.
In terms of partners, do you actively seek out people to work with who could integrate into your systems?
We want to be a participant in the overall ecosystem, so for us to be most effective in helping our customers, they need to be able to make choices as well. It might be on the claims side around repairing a home, or some of the solutions we have that relate to how we develop loss costs and wordings.
Our customers are looking to access our information through those third parties, so we try to be very open to that type of interaction and interconnectivity with partners.
What are the themes that your companies are looking at, beyond how we might traditionally think about risk and analytics?
We see three major themes out in the insurance industry. One is data analytics. Everyone has a team now and is looking to leverage the advances made by AI and machine learning. From a data analytics perspective, our people are intently interested in keeping up or staying ahead with how our customers process claims or handle fraud.
The second, which is becoming increasingly more important, is digital engagement. Our policyholders are very interested in having the same experience they get when they shop online. if they're on Amazon, they don't have to worry about getting that gift tomorrow in the right size and the right colour. They expect that type of service as they process a claim.
The third one is a little broader, but it relates to automation. There's been heavy investment in insurtech, back-office systems in general because everyone's looking to automate with the idea that they would save costs and be more efficient, but they're also dealing with a “greying” workforce.
How big a problem is that greying workforce, and how are you using automation to address it?
In the United States, as an example, there are about 2.4 million people working in the insurance industry and close to 500,000 are due for retirement over the next two, three years. There needs to be a transition to these expert systems so that we can replicate some of that expertise.
We have a term called “right touch claims adjusting”. What that means is if it's a really thorny claim, we're going to put our experts on it. But for those high frequency, low severity claims, we look for ways to automate so it's almost no touch.
The focus is on flow underwriting. How can an insurer handle it in a way that needs very little manual intervention? Are they confident in the data that's being provided so they can underwrite this claim? If it's a more challenging higher risk claim, then they know when to bring the experts in. That's some of the theme of automation we've seen.
Does Verisk have a definition, or do you personally have a definition, of what insurtech is?
We don't think of insurtech as a business type, we think of it as a capability that is looking to try to make the process more effective and more efficient.
There are insurtechs on the insurance, or insurance business distribution, side of things, so they're going to be an underwriter or a managing general agent. That is more of a distribution play. There's also a lot of service providers, that are more competitive, in some cases, to Verisk.
What we've seen is that that push on insurtech has caused a lot of large and very sophisticated insurers to be more focused on technology and digital engagement. It’s driven the industry in a very positive and good direction.
Are you seeing any shifts in how companies are using you to perform analytics following Covid-19? Is it driving anything faster than might have been happening otherwise?
Tools that use and access policyholder information in combination with video collaboration or pictures have become very important to insurers, not just on the underwriting side, but also to process claims.
The other thing that is people are concerned about fraud. We have been tightening some of the algorithms, and we have some solutions to help banks and those in the payment space, as well as on the insurance side, to detect and fight fraud.
Innovation is important to Verisk. How do you create that innovation culture across individual companies in the group?
Innovation is cultural. We need to make sure that everyone feels like every day, they're focused on the customer and what can we do better. What can we improve? How do we create innovation from that?
Innovation doesn't have to be an invention or a wonderful new application, it could be systematic changes, features, and enhancements that are constantly improving.
We try to make sure every employee feels that innovation is a part of their job and being close to the customer is key to that. We also try to formally organise a big ideas event each year to get people coming forward with ideas.
Are there areas where you've still got really hard problems to solve and are looking for solutions?
As insurtech has evolved, most of the money has come into the front end of the system. It’s probably been less focused on distribution.
What we're always looking for is new data relating to pricing and segmentation. The algorithms have been there for decades, but now there's so much more data available, and it can processed it speeds that were never possible in the past at such a low cost.
The other thing we realised is there's been less investment on the claim side. We’re continuing to put a lot of effort into fraud detection. It’s not as high on the radar for many companies as I think it should be. Fraud detection is a key area for us, we think there should be more capability there.
If anybody wants to contact Verisk with an idea, what's the best way into the organisation for them?
Well, I'm always happy to take questions and calls and you can find me on the website. We have some teams that are specifically involved, so I'll get emails to the right person so that we can reach out.
We’re always happy to work with others. I think collaboration is key to how we can make everything better.
Continuing Professional Development - Learning Objectives
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After listening to Episode 78 you will know:
- How Verisk defines insurtech
- The key themes Verisk see in the insurance industry
- How Verisk supports innovation within its own companies
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