Use Your Data to Get Proactive
I often describe the early part of my career as one of being a 'frustrated insurance broker.' Frustrated in the sense, I often struggled to match insurance capacity with the emerging risks presented by my clients. While I had the privilege to work at one of the world’s largest insurance brokers and learn from some of the most experienced professional leaders in the industry, I still often felt I was battling industry’s overall reluctance to change and a deep rooted commitment to "the way things have always been done."
In 2014, after building the first ride-share insurance product, I joined Lyft to build their risk solutions team. I faced the same challenges I faced in my first 15 years in the industry, this time at scale! Not only did we not have 5 years of loss data, the entire industry didn’t even have 2 years of loss data. At one point we were doubling in size in a matter of weeks, not years. At my fingertips was a tremendous amount of data. While much of the data was novel, it had the potential to be very powerful from an underwriting / risk management perspective. We became hyper focused on using our own data to understand our risk and to not simply rely on preconceived notions or historical factors that didn’t actually comport with our business. We had to create a new innovative data-driven approach, most importantly, continually refine that approach. There was no looking at this on an "annual basis" - even the thought of that was crazy given our pace of growth.
This kind of innovation in how we evaluate and transfer risk should not be accessible only to hyper-growth companies with novel business models and the benefit of hundreds of engineers and data scientists on staff. Given the challenges of today’s insurance market, there’s an opportunity for leading risk managers across the board to make 'necessity the mother of invention'. All industries are increasingly data-driven. By harnessing this data, you can take control of your risk management, be proactive with your insurance partners and drive results that are reflective of your individual, ever-changing risk profile.
Written by Kate Sampson
Investor at Anthemis focused on growth-stage venture investments in insurance and risk-related technologies. Kate previously ran Risk Solutions for Lyft, and led the San Francisco office for Marsh and McLennan.