The last paragraph of this article is the most important, so we lifted it as the highlighted quote below: Insurance carriers must go beyond traditional actuarial models to incorporate new sources and types of data.
Is this actually happening? We hear it every day in our conversations with leading insurers. They're testing new data sets as well as analytical tools from a range of start-ups: fraud solutions (Carpe Data, FRISS), data and tools to improve the application experience in smb commercial lines (DataCubes, Terrene Labs), as well as data and tools to improve underwriting and claims (Better View, Cape Analytics).
Partnerships with external companies, whose expertise lies in collecting and analyzing these new data sets, allow insurers to keep pace with rapid advancement in predictive analytics before building out an in-house capability.
Moving forward, it would behoove insurance companies to think about sourcing data as a partnership model, rather than an in-house collection function. There’s a real need to create redundant sources of data to flow into an environment, rather than relying solely on the proprietary data that’s traditionally been a competitive advantage. Therein lies the key to ensuring ongoing competitiveness into the future.