Finding the new answers for today’s insurers

New datasets allow us to more directly measure exposure—so why aren’t we making more of them? It would make sense to think for example that the size of foot traffic in a location would correlate to the venue’s risk exposure, yet surprisingly, this isn’t the case. Instead, we rely on the amount of money that passes via the cashier. Insurers can make much more of new datasets to transform their general liability underwriting, improve loss projections and price accurately, transforming the profitability of their portfolio.

At this May’s Commercial Lines Innovation USA Virtual Event, Safegraph’s Jay Gentry, head of insurance, and Mike Morrow, partnerships manager, will explain how new sources of information will change how actuaries view risk in the future. Here, Gentry outlines to Intelligent Insurer what viewers can expect to hear.

Why are the current proxies no longer fit for purpose?
There is more information to put into the underwriting models than just the receipts and revenues associated with places. That can then inform the different risks available to actuaries. How people go into stores has changed so it’s important to readjust what the ‘people’ liability is for business. Insurers tend not to look at people traffic. We’re applying foot traffic and people time on top of point-of-interest information.

We don’t know what the world is going to look like coming out of the COVID-19 pandemic. There may be a very delayed response or people may get out more, rapidly. Much of this could depend on the geography.

How does changing consumer behaviour impact general liability?
Layered on top of all this pandemic-related change is digital transformation. The way people consume goods has changed. Looking at revenue and receipts when people visit but the transaction is not actually done in person is no longer adequate.

There is now so much real estate that is not being used in shopping malls, so they have turned to food outlets. Food is the new fashion. And when you put food establishments in, consumers start spending a lot more time there, which extends and changes the nature of the risks involved.

What do those new datasets look like?
One is about pure geometry: the shapes that relate to the point of consumer interaction in the physical location. That is, the geometry of the place of business and its relationship with the mobile usage pattern of consumers work together to bring clarity to where people are, how they behave and the impact they have on liability.

How will new datasets improve carriers’ ability to underwrite in the key areas of cost and customer satisfaction?
The important thing about this conversation is that there is a much more sophisticated buyer in the commercial lines marketplace, and they expect customisation. The more granularity you have about risk in the business, the more flexibility you have in pricing.

That means you can be more competitive. The consumer will win because they’ll drive competition and the carrier will win because they’ll underwrite more detailed, quality business.

There is a potentially infinite volume of data insurers can explore. How do they focus on the valuable information?
From a data provider’s point of view, dealing with the tech stack, it is beholden on us to curate the data that works well with that from other providers. The concept behind the Placekey open identifier was to bring data providers together to simplify the curation process. That in turn will allow insurers to do what they do well—assess risk—and not have to spend all their time wrangling data.

What are going to be the key takeaways from Commercial Lines Innovation USA 2021?
One of the points to be made is that all things that look equal, are not. If you go into a coffee shop, the revenues are not indicative of the potential risk. Foot traffic is an important dataset to analyse. Revenue and receipts alone can’t tell that story.

That said, we don’t have all the answers, and we always look to the industry and beyond to find the new ideas that are important to tomorrow’s insurers.

Jay Gentry and Mike Morrow will be speaking at Intelligent Insurer’s Commercial Lines Innovation USA Virtual Event (May 18 to 20). The event is free to attend for insurers and brokers/agents, but you must register in advance. Sign up to access the content live and on demand here.