Data, insight and a blast from the past

October 3, 2019 Kevin Gaut

I don’t think that anyone ever really considers themselves old. You don’t wake up one morning and think any differently than you did the day before — you tend to feel the same.

Insurance data, insight and a blast from the past

I can hear you thinking ‘odd way to start a blog about data!’, but bear with me and let me paint a picture for you… of some dark, forgotten days.

Once upon a time, if you wanted to know who was the latest popular musician or band, you would listen to the radio. Typically there were only a few radio stations, so if you fancied something a little different then you were limited to late night on Radio One. Having found a track you liked, you might even arrange to record that song off of the radio. ‘Pirating’ was a thing you did with a parrot and an eye patch, so back then it wasn’t even a consideration. Finally, you’d commit to go to Woolworths or Our Price and purchase the record, from a real shop, with real people who you hoped might introduce you to another band who you had not heard of — because they had insights that you didn’t have.

In this strange lost land we’re talking about, you went to school and were often given projects for homework that involved research into subjects beyond the knowledge within your home environment. This research usually involved a trip to a peculiar quiet place called a library. Here in the library, you would seek the advice of the masters of this knowledge repository, to understand where the data that you sought might be stored, seek out understanding and insight and then with any luck complete your homework with this newly gained knowledge. FYI, you also used to be able to ‘borrow’ music from the library when you couldn’t afford to buy it, for the younger audience think analogue Spotify!

After school, our brave hero in this story would foray into the new world of ‘computers. But, hold on, we have computers today you’re thinking. I know, but with modern computers do you have to design every data element to limit the amount you store because storage is expensive? Do you use things like ‘Working Storage’ which allows you to use the same piece of memory for multiple things, thus reducing the size of the program you are running? The programs and systems we developed, back in the day, delivered business insight on a limited set of the total data available, whereas much of the data available was discarded.

Today, our world is completely different. We live in an environment that is awash with data, ubiquitous internet access and the availability of cheap computing power and storage through the cloud which means we keep everything, forever.

Our entire world has changed as a result of all this data. Now everyone can create content or host radio stations, and in fact many successful artists started life as internet sensations. Virtually the entire knowledge of all human history is now available through our phones, we can understand any side to an argument and we can join the debate in real-time whether we have something to say or not.

All this technology and data has offered new opportunities to gain insight. If we want to know if somewhere is worth visiting then we have reviews for that. Well in actual fact we now have access to reviews for literally everything. We can also read, watch, post a review, or comment on other people’s thoughts, therefore giving us access to reviews of reviews. We willingly allow organisations to learn about us, to gain an understanding of who we are and then use that insight to ‘provide a better service to us’. When was the last time you updated your preferences before going on a website to stop this? Our mobile devices track our movements, get to understand where we go and when, and then at the end of the day will provide insight into our journey home without being asked.

All this data has often been referred to as ‘Big Data’, but the problem with data, both big and small, is that without insight it is only ever just data. It is the insight that is the value, not the data itself. Yes, the data may have many use-cases and value beyond its original purpose, but that is only because data may provide more than one insight, as different views of it may be valuable to different groups of people.

We have always sought insight, but it is how we access the data that provides this insight that has changed. We work in one of the world’s oldest data/insight industries, where without data you couldn’t create risk models. Without a risk model, you cannot calculate a premium. Our industry, although inherently data-based, has been fairly late to the party when it comes to the collation and processing of large quantities of data, often because our systems are old (see paragraph four of this blog) or not connected in a way that provides a vehicle to deliver business insights.

We faced this challenge at SSP, specifically around how we could provide insight into the markets that we participate in for our customers of all shapes and sizes. Much of the UK intermediated personal lines insurance value chain has not changed for many years. Quotes are provided by the insurers/MGAs into the brokers through hosted pricing at the software houses or through their Insurer Hosted Pricing (IHP) solutions. Once a risk is quoted then the insurer/MGA only understands that they have written that risk when they receive the EDI message from the broker. This gives no insight into their performance during the quote, no insight into the market they are operating in or could operate in, and often limited understanding of the trends in the market with no direct feedback loops on pricing changes and performance.

Therefore, we’ve created a model to allow insurers/MGAs access to the data and insight it provides in the markets in which we operate. We collect all the information and process it in a way that enables the customer to develop their own insights. We combine quote and sales data to provide a connected view of the market and deliver feedback loops on market performance.

We have made great strides into delivering data and insights into the markets we operate in, so our customers no longer need to ask brokers about quote performance - just like you don’t need to go to the library to research your homework. This is also just the start of the data that we have access to and the insights we will be able to offer.

It is amazing to think that I’ve been in this industry for 32 years now and have seen it change so much, none more so than in the last 5 years. I don’t ever consider myself old, but I do remember when the world was very different and data was something that you went and gathered and insight was what you sought, rather than having it at your fingertips. But the universal truth remains: without insight, data is just data.

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