Last week we launched the Webinar series titled ‘Insurance is all about data’. Roger Ferrandis, COO & Co-founder at Wenalyze, talked with Florian Graillot, investor at astorya.vc.
It was a very interesting talk that focused on data quality in commercial insurance and how insurance carriers can improve it.
In this article, you will find some of the most outstanding highlights they discussed.
Let’s begin!
What is the problem of data quality in commercial insurance?
Sometimes insurance carriers have very limited data about their clients, or it’s not updated.
Because of that, there are two opportunities in insurance:
1. At the subscription moment: having more quantity and reliable data is helpful. Consequently, this will make a smoother onboarding and a higher conversion rate. There is a challenge in making the subscription process more accurate and automatized.
2.Alongside the contract life: to ensure you can track any update in the company. The level of insurance is changing, and you need to understand your customer needs perfectly.
What type of solutions do you think insurance companies need?
A big part of the answer is coming from startups and InsurTechs. The first point is startups are more flexible in facing these kind of new challenges (they have an innovative approach to businesses). The second one is spotting real event data set. It’s about getting the highest accuracy level but not necessarily the highest amount of information. The third point is getting a sense of this data and building algorithms. The opportunity to work on data is something for InsurTech startups.
According to Florian’s expertise in the sector, he saw insurance companies trying to build their own internal tech solution but after that, they usually fail. Then it’s when they begin to look for an external solution but the time they have lost doesn’t come back.
What popular solutions do you know in the market for these data ingestion or 3rd party data providers?
Incumbents have an interest that the solution startups are leveraging works with their competitors. The more accurate data you have, the better it is. Concerning algorithms, it’s all about having a lot of data points so it can make the algorithm smarter. More and more incumbents will realize that this market trend will benefit them. That’s why if you build your solution, you have limited effects because you rely on your data.
There are pure data providers that can work with different industries and then solutions that are insurance related specifically. The first ones are more reluctant to adapt the solutions whilst InsurTechs are more flexible and concrete. Additionally, those data providers can have a very good database, but it’s sometimes only updated once a year. This means that incumbents might be accessing data that is eleven months old which might not be the reality for that SME. Whereas, with AI (the model Wenalyze uses), we’re always choosing the most updated data point. So, we’re always offering the most updated version of the risk of a business.
Why are not insurers developing these types of solutions themselves? What are the problems they face when they try to do that?
Some aspects worth mentioning are the following:
1. Attracting tech talents is a challenge: you have tech giants and incumbents trying to attract the best people. Not only hiring them is difficult but also keeping them onboard.
2. Establishing good relationships between partners: working with an external player can open the door to many opportunities. It’s important to go step by step solving problems and growing together over time. In Wenalyze we start checking the most important data points (activity and address) with your current clients.
How do you think solutions work differently between new risks and current clients?
We understand new risk as the ones not covered by the market, which are quite recent. There is not a commoditize solution yet. You usually lack data to get a sense of the risk itself and then price it. That is one example to illustrate that data is key to first understanding the risk.
From a sales perspective, we usually tend to think that the opportunity to grow is targeting new clients with new products but to there is a huge opportunity from existing clients. Companies have a big portfolio of customers already. Big selling opportunities exist there. We can update traditional data and then do upselling, prevent from the premium leakage and rise growth. With existing risks, it’s essential to make the subscription process easier, understand your customers and update their information alongside the contract life.
How integrated do you think these solutions will be in 5 years?
Insurance takes time. We see corporates testing this kind of solution, and working on building internal solutions. They will come back to the market in 2 or 3 years from now searching for these kinds of solutions already established. The more insurance companies feel the value they are getting the more they embrace these types of solutions.
In 5 years from now, we are expecting more players leveraging these kinds of external solutions and relying on InsurTech startups. Incumbents will count on this intermediary to get the most of this data. It’s not only about the amount of data, but also about spotting the right one.
If you want to learn more about the value that InsurTech is bringing to companies, you have our webinar available down below. Just push play!
We hope you enjoyed this content and see you in the next Webinar! Would you like to find out how Wenalyze updates and improves data quality? Request your demo at no cost or contact us at
wenalyze@wenalyze.com
