Using data to better understand risks

Using data to better understand risks

Using data to better understand risks | Insurance Business America

What do clients really want from their insurance partners?

Using data to better understand risks

Risk Management News

Oriane Valdelievre

This article was provided by AXA XL.

Technology, and the data and information it can provide us with, can help us to better understand losses. This can then allow us to better help clients to monitor their risks and be more prepared for future events by taking steps to mitigate, or ideally avoid, future losses. Oriane Valdelièvre, head of claims service and transformation for APAC & Europe at AXA XL, discusses how data and technology can help improve our insights into losses and, ultimately, optimise prevention and risk management.

What do clients want from the claims journey?

Our clients are often risk managers of large corporates and one of their main aims is to understand and monitor the diversity of risks of their different subsidiaries, across all of their assets – from people to products, processes and real estate, to name a few.

Broadly speaking, clients are looking for three things from the claims journey. First, the ‘what’ – expertise about different contracts, laws and jurisdictions, markets and lines of business specificities, information that can be gained from years of experience encompassing multiple loss scenarios. Clients need us not just to use our expertise to help settle a claim, but also to derive an understanding of losses and help identify future trends.  

The second thing clients are looking for is the ‘how’. Here they want rapid loss notification acknowledgment, responsiveness and proactivity, and transparency about the status of their claim.

Last but not least, the ‘who’.  This requires an understanding of the client’s financial context and strategic priorities and its role in its industry. This understanding is aided by long-lasting relationships.

What are technology and data bringing to the claims journey?

Clients want their insurance partner to have the ability to use technology and data to help them understand their losses and, ideally, to improve loss prevention and reduce the risk of further claims. There is a huge potential for insurers to go beyond their traditional role of paying valid claims and using mainly spreadsheets to communicate with clients.

With technology and data, we can give our clients more meaningful loss data insights, that help us to deliver on these three dimensions of client needs.

It helps us to improve our processes too; we use technology and improved data flows to better capture information, like when the loss notification was made, or when the reserve was set. We can also leverage unstructured information from policies, emails and loss adjuster reports, and so on track upcoming actions on a claim and, ultimately, speed up the time it takes to pay a claim. And finally, we are better at understanding our clients and their industry. We can use business intelligence dashboards to compare the client’s losses with those of their peers.

How are your clients using loss data and insights?

To start with, across all dimensions mentioned for the claims journey, we are working on ‘giving data back’ to clients.  This is becoming a core component of what our clients expect. They want accurate, timely and granular data reports on their loss history. They really care about data, and they want data they can access and use as part of their own systems.

Our claims teams are working with key clients to deliver the relevant insights to them, irrespective of their recent loss history, thanks to regular claims reviews, lessons learned and feedback loops with underwriting teams.

What types of technology and data are helping claims teams to better understand events and losses? And how does this help risk management?

There are many ways in which technology, and the data it produces, can help us to better manage and understand claims. For example, the use of geospatial technology can enable us to understand – quickly – the nature and extent of losses from natural catastrophes, particularly when areas remain inaccessible or dangerous to access after an event. In 2017, for example, when Hurricane Irma devastated large swathes of the Caribbean islands, satellite imagery helped insurers to understand swiftly where losses had occurred, identifying at scale the impact of the damages for instance through image-change detection.

Satellite imagery can also help us to understand the circumstances of a loss. For example, in marine claims, we can use geospatial data to track a vessel throughout its voyage and understand the risks it is, or was, subject to (e.g.- piracy or sanctions). We are also able to use technologies like drones to assess losses, and this is particularly useful in the case of flood losses, for example, that are difficult to access.

Finally, another technology that can help us to better understand claims is 3D modelling and virtual reality. This can help us to visualise and recreate what happened during an explosion, for example, to get an understanding of what happened during a loss – and what lessons can be learned for the future.

How do you see the use of data and technology benefitting your clients in the future?

Our aim is to build claims ecosystems that capture, structure and help analyse a wealth of internal and external information on past losses and emerging risks, throughout the claims journey. We are convinced that the combination of this information is hugely powerful in enabling us to understand claims, detect trends and use data to feed back to our clients to help in their loss prevention efforts.

When used appropriately, technologies such as Artificial Intelligence, machine learning and natural language processing can be really useful in helping us to improve our clients’ experience of the claims journey and the lessons they derive from it. These technologies not only enable us to gather and deploy relevant data fast, they free up our claims colleagues’ time to focus on the areas where their expertise is most relevant. And we know their time is not well-spent going through pages of PDF in search of one simple data point or copying and pasting data fields from one system to another. In commercial lines insurance, the claims our clients face are often complex, and their exposures evolving on a daily basis.

Working with technology and data can enable our claims experts to focus their efforts on the areas where their expertise and knowledge can add the most value for clients, particularly in sensitive, sometimes stressful, times.

How would you like to see the claims function evolve?

I’d love to see claims teams more often involved or even at the forefront of innovative projects within insurance companies – they are the ‘Voice of Clients’ when the insurance promise materialises. The advances in technology that are happening all the time and capturing almost real-time information can help us bring even more value to our clients and learn continuously from risks which turn into reality.

We want to bring our clients insights on what actually happened during previous large events and crises and continue to feed their views as risk managers on what may happen in the future. While our focus is, and will remain, on being there for our clients when they need us to pay valid claims, we can also help them to reduce the quantum of losses or prevent them altogether.