Why Underwriters Love AI: The Power of Decision Science Insights
Determining a business’s risk profile is the heart of commercial P&C underwriting, but the research that goes into it is often tedious, time-consuming and error-prone. Underwriters may conduct dozens of web searches and direct numerous follow-up questions to the submitting agent as they work to build a comprehensive picture of the applicant company, its risks and its potential profitability as an insurance customer.
This process is inefficient for underwriting organizations and adds friction to the customer experience. In a world where the first insurer to issue a quote often gains the business, it is a drag on underwriting productivity, and the delays it produces can lead to lost business. When the underwriter’s research provides an incomplete or inaccurate picture of the applicant’s business, it can raise the risks for the insurer and drive up loss ratios. Having been a data scientist here at DataCubes for two years now, I have worked extensively to ensure that underwriters receive accurate information on their applicants’ businesses and I would like to share some in-depth knowledge on how one of our products, d3 Risk 360™, works.
d3 Risk 360 automates and transforms the search process, turning third-party data into well-informed business insights. By collecting and aggregating data from a wide array of carefully curated data sources, d3 Risk 360 empowers underwriters to increase their productivity, gain a clear picture of each applicant’s business, and make smarter underwriting decisions.
While creating and enhancing d3 Risk 360 we always have in mind to provide underwriters with a solution that is:
- Comprehensive. We maintain a data lake of more than four billion validated data points drawn from records for all 50 states. We go far beyond a business’s website, searching everything from government databases to customer review sites and providing the intelligence to turn data into information.
- Relevant. We apply best practices from expert users to identify the best sources and data points for understanding an applicant’s risk exposure based on its industry, location and other variables. Our sophisticated algorithms and machine learning methods find, analyze and interpret the search results, identifying useful websites and extracting relevant information.
- Accurate and up-to-date. Our platform is constantly analyzing data sources for changes and also, incorporating new sources as they come online, enriching our data lake. Additionally, it helps us enhance our algorithms, which, in turn, improve our ‘company search and match’ process.
- Fast. d3 Risk 360 delivers insights on the business in seconds.
- Easy to understand. Results are synthesized and presented in customizable, readily understandable proprietary formats.
d3 Risk 360 saves time for underwriters while providing a solid view of an applicant’s business and its potential risks. Underwriters can make smart, data-driven decisions and capture efficiencies that can increase margins and improve expense ratios. They can reduce the number of follow-up questions, helping improve the customer experience and respond quickly to quote requests. With a clear picture of the customer’s risks, they can optimize pricing strategies and loss ratios.