Revolutionizing Risk Assessment in Insurance

The pandemic, exceeding 2 years, has changed a lot. From lifestyles to business practices, from priorities to industries… And the technology we use evolved in tandem with these changes. Technology’s impact on all the different industries has increased even more with the pandemic. The insurance industry is one of them. Using innovative approaches to create competitive advantage and generate revenue, especially with data-driven insights, has become more vital for building long-term resilience.

According to the Insurance Revenue Landscape 2025 report by Accenture, ‘technology integration within traditional products’ is one of the most vital innovation areas identified. The impact of technology and data driven approach has been changing the traditional way of doing business in the risk management and underwriting in the insurance industry.

Is it possible to see the risks?

Risk assessment recognizes and examines possible future events that can cause loss and enables accurate decision making on the tolerances of said potential risky situations. Risk assessment is crucial in the insurance industry to make sure that without knowing the details of the risk, it will cause colossal damage. Is it then possible to know or see the risks before insuring them? If your answer is yes, you like to radically change the way you perform risk assessment in the insurance industry.

Verification Through Real-Time Data Gathering

Throughout the history of the insurance industry, only 5% of risks have been visible to the insurers. A thorough assessment before insuring, along with investigation before indemnifying, is vital to prevent huge losses. Traditionally it is believed that seeing every aspect of the risk is not possible. According to the article of Julia Kagan who is an industry professional specializing in personal finance, credits and debts for 25 years, there is a considerable amount of risks that underwriters are not able to see. However with data driven solutions, up to 100% of the risk can be visible.

Thanks to [VRS]™ Virtual Risk Space, you can get data from the property in real time via live video streaming and customizable survey forms that capture photos, videos, audio recordings, GPS and more. Even in the remotest parts of the world where you may not have access to a healthy internet connection, data can be gathered offline with all kinds of mobile devices such as phone, tablet regardless of iOS, Android, and then can be synchronized when a proper connection is available.

The ability to store data in the cloud makes it easy for you to analyze the data whenever you need it leaving no room for error. Literally seeing the risks documented with [VRS]™ Virtual Risk Space enables you to make well-informed decisions rather than acting blindly. As a result, real-time data gathering increases the workload efficiency of the technical teams up to 40%.

AI-Driven Risk Assessment

Each risk should be inspected by either a human or a computer eye. Insuring every possible risk without inspecting it belongs to the past. As of now, the insurance industry can see and assess each and every risk.

According to the AI Multiple, AI can significantly improve submission processing and free up valuable time for more productive tasks. For instance, several steps in the underwriting process can be automated. Underwriters can automate data collection, data extraction, filling forms, or other repetitive and tedious tasks. For example, an important application of AI in underwriting is extracting information from unstructured data through optical character recognition (OCR) and natural language processing (NLP). These technologies can eliminate the necessity of manually reviewing each document coming from traditional or non-traditional sources and help underwriters capture and classify useful information.

McKinsey Insurance 2030 report claims that in 2030, underwriting as we know it today ceases to exist for most personal and small-business products across life and property and casualty insurance. The process of underwriting is reduced to a few seconds as the majority of underwriting is automated and supported by a combination of machine and deep learning models built within the technology stack.

How can you reduce loss ratio with [VRS]™ Virtual Risk Space?

According to Mckinsey, data and analytics capabilities are becoming table stakes in the P&C sector in Europe and North America. Best-in-class performers are putting distance between themselves and competitors by building advanced data and analytics underwriting capabilities that can deliver substantial value. For example, even the leading insurers can see loss ratios improve three to five points, new business premiums increase 10 to 15 percent, and retention in profitable segments jump 5 to 10 percent, thanks to digitized underwriting. They anticipate that carriers will increasingly use the power of data and analytics to proactively assess their outlooks—similar to what hedge funds do in predicting capital markets—and identify market opportunities ahead of competition.

The remote risk assessment with [VRS]™ Virtual Risk Space eliminates the need to travel or be physically present on the site, allowing you to reduce expensive and time-consuming traveling costs. Built-in and customizable survey forms that can be tailored to unique risk exposures saves a remarkable amount of time. These survey forms can be assigned to any risk engineer – wherever they are – with insight from the right expert. Even the policyholder can use the platform to inspect micro-sized risks by themselves, and share the gathered data with you via the platform. Replacing manual with automated risk reporting saves a significant amount of time and the data accuracy provides financial savings as well. [VRS]™ Virtual Risk Space makes the expensive and slow risk assessment process cost effective and noticeably faster.

The global insurance industry is reported to grow by $1.4 trillion between 2020 and 2025, despite current conditions and upended risk models; and insurers must innovate to capture a share in this growth and maintain their place in the value chain. To be a part of global growth, explore [VRS]™ Virtual Risk Space. Contact us for more information and claim your free trial.