This Week in Analytics: News

Insurers (and Everyone Else) Still Learning Analytics, Broken Workers’ Compensation Systems, Insurance Telematics & Pricing, Commercial Insurance Rate Cuts in June, Competitive Market Favors Workers Comp Buyers, Do’s and Don’ts of Predictive Analytics

 

Insurance Networking News: Insurers Still Learning Analytics, But So Is Everyone Else

Big data analytics have caught the business world by storm, but it appears they haven’t reached the insurance world. If anything, most insurers have barely scratched the surface, according to a report from one consultancy.

According to Bain & Company, one in three life insurers and one in five property/casualty (P&C) do not apply big data advanced analytics for any business function – including sales, marketing, underwriting, or claims. The survey covered 90 insurance carriers.

The insurance industry is known to be conservative when it comes to new technology paradigms, but may not be alone when it comes to data analytics. In a study of 564 companies I helped design and produce for EY as part of my work with Forbes Insights, we found that many organizations across the board are still struggling to derive value from their data and analytics initiatives and capabilities. Most admit that they still do not have an effective and aligned business strategy for competing in a digital, analytics enabled world, and continue to struggle with change management issues in getting business users to adopt analytic insights. Only about half of the most highly analytics-driven organizations (the top 10% of the survey group) have fully embraced analytics. Among the rest of the group, that number drops to about 10% who really are pursuing analytics in a big, well-organized way. Read the full article now…

 

Insurance Thought Leadership: Are Workers’ Comp Systems Broken?

As national conversations occur about the direction of workers’ compensation (WC) systems, I sometimes hear comments that “WC systems are broken.” Rarely are public programs either all black or all white. The material below summarizes relevant information from a variety of published Workers Compensation Research Institute (WCRI) studies about how most workers fare in WC systems. How workers fare is critical to assessing the performance of WC systems, and the effectiveness of these systems affects the competitiveness of American business.

The data from WCRI illustrates that the majority of workers in the workers’ compensation system:

  • Return to work within a few weeks of the injury, typically to their pre-injury employers at the same jobs and pay as before the injury
  • Receive their first income benefit payment in 30 days or less from the time that the payer is notified of the claim
  • Report that they were satisfied with the overall medical care received, including the time it took to have the first non-emergency visit with a provider and access to the desired medical services

Here is more detail: Read the full article now…

 

PropertyCasualty360: Telematics in Insurance: Beyond Pricing

Sometimes it is difficult to believe that vehicle telematics for usage-based insurance is 20 years old.

While the likes of Norwich Union and Progressive began planning and piloting long ago, most of the real activity in the market has taken place over the last few years.

SMA’s recently released research report, Telematics in P&C Insurance: The Need to Move Beyond Pricing, profiles the state of the UBI market in North America, with a special emphasis on data and how that translates into value propositions.

Stuck in neutral

As the report title suggests, the North American market tends to be stuck in neutral, focusing primarily on offering premium discounts to policyholders that exhibit certain driving behaviors, as tracked by the telematics device. While there are isolated instances of insurers that have gone beyond pricing, the majority of the programs in the market and the pilots underway concentrate on attracting customers through discounts (which are often substantial). Read the full article now…

 

Insurance Journal: Commercial Insurance Rate Cuts Slowed in June: MarketScout

The composite rate for commercial insurance placed in the United States moderated in June to minus 1 percent from minus 2 percent in May 2016.

“Insurers are getting tired of cutting rates,” said  Richard Kerr, CEO of MarketScout. “There are still pockets of very competitive business; however, it is beginning to look like insurers are willing to maintain the rate reductions of the past few years and not cut rates even further.”

Coverage classifications business owners policies (BOP), umbrella and professional liability all moderated by 1 percent in June 2016 as compared to the prior month. Employment practices liability insurance (EPLI) rates were up 1 percent. Commercial auto rates moved from flat to plus 2 percent. Read the full article now…

 

Business Insurance: Competitive Market Favors Workers Comp Buyers

Many employers renewing their workers compensation coverage at midyear are benefiting from increased competition, with pricing that is the same or slightly less than a year ago.

“It’s very much a buyer’s market, so we’ve been able to secure rate decreases on a significant number of our clients’ programs,” said Christopher Flatt, managing director and leader of Marsh L.L.C.’s Workers’ Compensation Center of Excellence in New York.

Most employers are seeing workers comp rates that range from flat to decreases as large as 5%, experts say.

However, employers with an unfavorable loss experience or a large number of workers in an urban area are less likely to secure significant rate decreases, he said.

Meanwhile, insurers are offering “really aggressive collateral terms for the best-performing companies” as well as “early renewal strategies or multiyear rate commitments” to keep current customers, said Mark Moitoso, Boston-based senior vice president and analytics practice leader at brokerage Lockton Cos. L.L.C. Read the full article now…

 

Insurance Networking News: The Do’s and Don’ts of Predictive Analytics

To achieve the best results from predictive analytics, prioritize these six top factors, and avoid these five common pitfalls, advises Rado Kotorov, chief innovation officer at business intelligence and data analytics firm Information Builders. (This content originally appeared on Information ManagementView the full slideshow now…

 

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