In Trust We Data
Data powers the insurance industry. It is the front office, shapes the customer experience, gives meaning to the product, drives the cost of coverage and is the currency for capacity. When it’s its best self, data empowers the right decisions, delivers results, closes the loop and connects the customer.
In the real world, however, the situation is, well, fraught.
Take the Large Commercial Property sector, for example. The critical information used to underwrite large shared and layered programs are disconnected spreadsheets and documents, sent by email. Every submission is in a different format making even simple insights difficult to extract. More problematic, the data is ‘flat’, often incomplete, always latent, and at times erroneous. And with every hop entropy takes its toll. It’s understandable that many underwriters and their teams are skeptical of the information. It’s ironic: an industry built on trust lacks trust in the very data that defines what it does.
Underwriting trust has evolved into an art form across the industry. Relationships matter; outside-in verification helps; and outcomes serve as a proxy for insight. But what would a system of trust look like, engineered and architected to systematically source and stream trusted data, immutably shared, wired with evidence-links making clear its provenance and lineage?
In such a world trust would emanate from the “inside-out”. After all, the best data in the world about high value properties lies within those who actually own them. These owners construct their properties, due-diligence when they buy them, steward their assets as they manage, monitor (increasingly digitally), and maintain them, and enhance the properties including investing in mitigation and resilience. At every stage of this lifecycle an ecosystem of professionals with affinity to these properties continuously contribute and consume valuable data. It’s currently not easy to find this data, integrate it, extract insight from it, and share it in a way the engenders trust. Yet, upstream lies treasure.
Just imagine the trust dividend that could be unlocked from this data, creating a seismic opportunity across the value-chain. Risk Managers of asset owners could drive more proactive data-driven decisions to manage their risk across the lifecycle of their properties and achieve resiliency-driven ROI.
And what if these datasets could be securely shared and permissioned On Stream with their insurers as a shared system of truth, across the value chain, to catalyze more efficient and transparent insurance markets who in turn could provide more risk capital at better prices enabling more coverage and greater alignment of incentives to take risk out of the system in the first place? Not zero-sum, but win-win. These opportunities are a call to action, now more than ever.
Written by Hemant Shah
Co-Founder and CEO of Archipelago: Previously, he Co-Founded Risk Management Solutions (RMS) as a graduate student at Stanford University, and led RMS until 2018, building the market-leading risk modeling firm serving the global insurance industry. Hemant is passionate about risk and resiliency and serves on the Board of the social venture Build Change.