Claims Insights – from data to information to action

Credit: Getty Images/Zurich.

Data is widely available and easy to access. However, gaining useful, relevant and practical information from that data, and translating it into actions that improve the risk, is what really provides value for a company and has a positive business impact.

Customers often own a lot of data but they may not see the value of analysing the information they have. Some lessons can be learned from analysing a single claim or a small number of claims. But for proper trend analysis, and real insight, claims information needs to be analysed for the last few years, across the group.

Getting the best analysis is all about the quality of the data. Some companies collect data and then a lot of effort is required to clean up that data to get it into a useful format. Data consistency is an issue that perhaps holds some companies back, but technology can make a huge difference. It allows data to be pulled from various sources and be aggregated, even if it is not in exactly the same format. For example, claims data can be combined with risk engineering grades or the number of fleet vehicles or the number of shipments made on a certain path.

The next step is translating the claims analysis into risk management actions. This requires the customer to have a mandate outside of insurance handling or risk management and the centralised authority to steer the local processes needed and convince other departments, such as logistics or legal, to make appropriate changes. For this to work properly, a centrally managed risk management team is needed that oversees global operations and has access to the functions involved. For example, for motor claims you need access to fleet managers in the various locations. Otherwise, there is little point doing a lot of analysis to reveal the problems if you cannot bring forward a solution.

Technology helps bring up issues that previously would not have been identified or considered, and that can be shared with the customer. It gives us the ability to go deeper and deeper into the customer’s business, and this opens doors to be able to start a dialogue that we could never have had before in such detail and quality. It helps us to better understand the customer’s business, and helps the customer to understand their own business better than in the past.

It can also lead to the customer’s internal departments starting to work together to mitigate certain risks. For example, the data might show that, although losses are within an acceptable range within each division of the company, for the group as a whole there is a problem. It might be one unique issue happening across the entire group, which if fixed globally will have significant benefits, even though the benefits for the business units may appear marginal.

The analysis of the data creates a crossover of the various functions talking about the same risk, which can then be translated into a business case. In the end, what claims analytics ultimately achieves is getting people to talk about the process and how they can improve it, and the need for solutions, for example by bringing in risk engineering. In addition, because of the breadth of data that insurers have, benchmarking can be provided, which means the client can compare its losses to other companies in the same industry or region, and this can also trigger some companies to take action.

Presenting the case
A crucial element is for the customer to be able to present the outcome of the analysis to senior management to begin a project. We can help them to put together a business case using the analysis or benchmarking to show where the problem lies, as well as visualising the solution. This might be a simple presentation to make the case, using charts and graphs, rather than a spreadsheet detailing the losses, which can be confusing and difficult to grasp.

Technology means that the data can be presented simply, but also allows for detail, or alternative viewpoints if required, at the click of a button. And it gets people talking about the issues – the insurance or risk manager talking to the logistics manager of the company about the actual risks and incidents that have occurred rather than just figures.

The feedback we have had from several risk managers is that they have much more productive meetings with internal departments than in the past. Claims analytics looks at the past, but it helps them define their future. Ultimately, the analytics, leading to the risk improvements through risk engineering, actually builds the partnership between the insurer and the client because both benefit equally from it.

Webinar: Claims Insights – From data to information to action
Roger Zopfi and Björn Hartong will be presenting a webinar in conjunction with Commercial Risk on this topic, aiming to showcase relevant methods and approaches of effective data analysis, and how to make data understandable and actionable. In addition, it will look at bringing the results into a business context in order to define risk improvement actions, which have a concrete impact on the company’s balance sheet.

Date of Webinar: 29 November 2018
Time: 2.00pm – 3.00pm GMT
To register for the webinar, please go to:
www.commercialriskonline.com/webinars

By Roger Zopfi, global customer claims executive, commercial insurance Switzerland, Zurich Insurance, and Björn Hartong, global risk engineering practice leader marine and security, principal risk engineer