ILC ARTICLE

Don’t let data get lost in translation

19th October 2021

Insurers have been challenged to regard data and analytics as an inseparable pair, and put both at the heart of the claims process or risk being left behind by others who do.

Tom Helm, head of claims consulting at Willis Towers Watson, delivered this message at ILC’s Exclusive Motor Claims Conference, held at London’s prestigious Landing FortyTwo on 7 October 2021.

His session, entitled ‘A world of data & insights’, highlighted the changes taking place within the sector and underscored the value of not just recording data, but interpreting it to inform and support future strategies.

Drivers of evolution

He pointed to new technologies such as hybrids and electric vehicles, new behaviours among employees and consumers, and new processes brought about by digitalisation, AI and changing legislation as the key drivers of evolution within motor claims.

Tom said, “The industry is changing rapidly and will continue to do so. The digitalisation of the claims process is happening and apart from existing competitors, new entrants are coming in to the market who are totally focussed on technology-based solutions. They are using data, AI and analytics to challenge the established players. This is happening right now, which is why we also need to put data and analytics at the heart of what we do.”

Critical insights

He explained exactly how analytics can deliver critical insights by talking delegates through some of the results of his company’s UK Claims Benchmarking Service, which is based on data mined from more than seven million motor claims stretching back more than six years, with a total value of more than £17bn.

He said: “Hit-in-rear accidents are typically about 22% of claims while cyclist claims are just a small fraction. But during Covid-19, hit-in-rear claims fell sharply while cyclist claims rose. This is significant because it tells us not just about claims frequency, but claims severity, which is going to raise the cost of claims and might explain to insurers why their costs rose.”

Analysis

Perhaps more interestingly he broke claims costs down to fuel type, revealing that hybrid claims are on average £1,000 less than diesel. However, further analysis of the data reveals different driver demographics and a disproportionately high number of hybrid claims relating to catalytic converter thefts, which significantly lowers the average claims cost.

He said, “Our service provides powerful insights, it can spot trends earlier and feed all these findings into the underwriting process, making it crucial to a data-driven strategy.”