The End of Blind Spots in Underwriting and Claims Assessment

The End of Blind Spots in Underwriting and Claims Assessment

Roger Peverelli and Reggy de Feniks -Digital Insurance Agenda

“One day, people will not believe we used to insure risks without inspecting them first. Inspecting each and every risk will become a business-as-usual approach. This is totally different than what happens currently; where globally no more than about 5% of the risks are assessed, whereas the rest are simply priced based on historical data and data provided by customers. The current status quo offers a massive opportunity to improve the performance of the entire insurance ecosystem”, argues Veysel Sinan Geylani, the founder of Virtual i Technologies.

Sinan, obviously risk assessment is at the core of the insurance business model. Could you tell us more about why in your view risk improvement is now more relevant than ever?

Sinan: “Well, imagine investing in a stock or in a company without data, without insights … Currently, around 95% of commercial and home property insurance policies are priced while not actually being seen. The high costs and turnaround time for real insight is prohibitive; the industry norm is 3 months for instance. The result is that insurers are sort of ‘blind’ towards their property risk quality, until a loss of event occurs. This does not have to be the case. Risk improvement increases profitability for insurers and helps the insured avoid severe losses. This is exactly what we’re trying to solve. Our solutions aim to make risks visible to increase the sustainability and resilience of the insurance carrier.”

How does this change the way of doing business in insurance?

Sinan: “With our solution 100% of risk data now become visible, remotely, for insurers. This means correct premium calculation and correct loss adjustment. In turn, this results in reduced costs, more revenue and saving time via digitalization. Our service is offered worldwide and is available immediately. In less than a week – using our patented solution Virtual Risk Space – any client of ours is able to already experience what we consider our measures of success: 100% real-time risk data, 40% Improvement in workload efficiency, 100% customer satisfaction and 12% decrease in loss ratio.”

On the one hand it seems you’re tapping into the increasingly digital mindset among insurers. On the other hand there are also specific tech trends that are pivotal in your solution …

Sinan: “Definitely. The main trends are digitalization and every-day use of data analytics. The imperative necessity in the very near future of using data in the insurance industry – in particular in the P&C area. Our Virtual Risk Space is testable without any need to install any software on your IT network, the platform set-up requirements are simple. It is an API based software architecture, meaning that it can integrate easily with existing platforms. It is hosted in GDPR compliant servers, therefore there are no minimal regulatory activities necessary. It’s server agnostic, meaning it can be hosted on any cloud or fixed server according to your requirements. Google cyber security and data backup provisions are best-in-class. The existing capabilities, powered by AI and machine learning, are patented. Infrequent users can access all functionality in-browser, without the need to download the app. If you want white-labelling or your own questionnaire templates we can complete this in under 5 days. And on top of that, it’s available in either a SaaS model or as a ‘fully outsourced’ resource and technology package – you can choose whatever fits you best.”

Allright, so this is under the hood. But what are the main features; what is the key benefit?

Sinan: “In short: immediate and visible results to the insurance industry. Insurers can now avoid bad risks completely, enhance their monitoring of accumulation, gather FNOL evidence before it is destroyed and improve their Loss Ratio. We believe this transforms the way the insurance industry carries out risk assessment and underwriting.”

Can you share how this works in practice? Can you give us an example of a client use case?
Sinan: “Sure. One of our clients is a top 10 insurer in Europe. They used to collect all claims-relation information, including photos, from their customers via whatsapp. The average data collection time per claim was 4 hours while claim settlement took a further 20 minutes. When claimant volume was high, this became more challenging, as all cases were being managed via one company whatsapp account. Obviously, this resulted in unacceptable delays in processing a claim. By using our Virtual Risk Space, the claims team was able to rapidly identify and settle ‘attritional losses’ within an average of 10 minutes, while only involving the operations department in more complex or larger claims. The overall claim processing time for the entire book now averages 20 minutes, a 13 times improvement on the base case.

Claims handlers now obtain real-time loss information at almost the same time as the FNOL notification arrives. This way, the physical evidence which can support the claim is still available. Since Virtual Risk Space empowers claims adjusters to perform basic fraud checks with real-time GPS check and ID of the insured, it also decreases leakage in claim costs. It makes it now possible to obtain all the documents, audio and visual data in real time to justify the claim settlement. All the data is transferred and stored in compliance with GDPR without requiring the claimant to download any application on their smartphone.

Customer surveys confirmed they adapted quickly to the digital real-time experience and were really happy with the swift claim settlement process they experienced.”

Impressive! So, what is your vision for the future when it comes to risk assessment?

Sinan: “I believe, beyond any doubt, that insurers will become even more aware of their ways of risk calculation than they do today, and that they would prefer to increase the visibility of risks from 5% to 100%. And that they realise they could actually accomplish this in just 1 year if they would use Virtual Risk Space. Not only large corporations but small and medium sized companies as well. It’s easy-to-use, the processes are easy-to-adopt, and last but not least it’s affordable. It could actually benefit the whole insurance industry.”

Veysel Sinan Geylani, Founder of Virtual i Technologies

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