How can 2016 risk inform your 2017 strategy?

Posted on November 21, 2016 by Sarah Stadler

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2016 has been a year of growth and evolution here at SpatialKey from enhancing our solution for underwriters, actively monitoring catastrophic events that impacted insurers, and bringing on more 3rd-party data partnerships to fuel our solutions. With 2017 on the horizon, now is the time to reflect on the events of 2016 and understand how they can inform your strategy for 2017.

This year's success  

Enhanced data and analytics for underwriters

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We revamped our Underwriting app this year, giving users access to analytics and visualizations for any hazard, such as terror, flood, wind and crime. Underwriters can now access intelligence to inform risk selection, all in one place. Further, our solution offers the flexibility to consume and integrate any 3rd party or in-house content to assist with decision making across the globe.  Uniting data, analytics, and visualizations for underwriters to proactively manage your portfolio at the point of sale is an ongoing effort for SpatialKey, and we’re thrilled to be on the path to making data-driven underwriting a reality for all insurers. Take a look at this webinar recording featuring our terror underwriting solution.

On-time event response for claims
Our clients have been able to stay on top of catastrophe events as they happen by leveraging up-to-date event information from expert sources.  This produces competitive advantage, proactive customer outreach, efficient claims deployment and early intelligence to detect potential claims fraud. Combining timely expert data, visualization, and analytics in one spot offers tangible insight into potential exposure and helps reduce claims costs. Here are some of the notable events we saw this year, and how we visualized them in SpatialKey:

McMurray fire

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Hurricane Matthew  Hurricane_Matthew.png

Louisiana floods 

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European Windstorm app
We also heard the call from many of our European users to make it possible for them to understand severe windstorms (many of you reading might remember the impact windstorm Kyrill had nearly a decade ago), in SpatialKey. We collaborated with our valued partner, Willis Re, to create a purpose-built app for insurers to easily access, visualize and analyze insureds potentially affected by a storm, track windstorms as they happen with forecast data and event footprints, and overlay event footprints onto portfolio data in one intuitive dashboard. 

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More 3rd-party data providers

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At SpatialKey, we are deeply committed to making sure insurers have the right data at their fingertips, so they can easily analyze and visualize risk in their underwriting, exposure management and claims operations. 2016 brought even more expert data providers to SpatialKey’s platform, including HazardHub, EuroTempest, Location, Inc. and Impact Forecasting. Being a data agnostic platform means that insurers can access the most relevant data and models available in the industry, plus make use of their own in-house hazard, exposure and experience data, to make data-driven decisions for their business. To date, we are proud to have been selected as a value-added partner to these expert firms!

Focused on the power of collaboration 

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At SpatialKey, we believe that innovation is delivered with enhanced speed and quality as the result of industry collaboration, allowing each contributor to relentlessly focus in areas of core competence and focus its financial resources.  This collaboration requires involvement from the insurance and the commercial solution provider communities.  Insurers provide the proper business context and focus, while commercial providers work collaboratively to deliver best of breed data and software solutions that link disparate systems and serve up intelligence directly to the business user community.  


Our passionate leaders had a lot to say about that this year. Our CEO, Tom Link, wants to see everyone evolve in how they collaborate in today’s data driven world; our CTO, Brandon Purcell, published an insightful post on the buy vs. build debate and cost of ownership; and our VP of Products, Derek Blum, talked to us about leveraging the right experts to get ahead. Not to be left out, our COO, Bret Stone, authored a white paper on the subject that you can read here.

The point is, we care about working together to move the insurance industry forward, and we’ll always be putting energy and effort into making sure we leverage the experts around us to make SpatialKey solutions even more relevant, insightful and powerful.

 

Enough about the past, let’s talk about the future

Next year is going to be important for how insurers use technology and data. We will continue to see new technologies and practices emerge. Some of which seek to disrupt traditional practices, but almost all of which, will offer greater efficiency, cost savings, and decision support. Here are three ways we think insurers can stay ahead of the game in 2017:

Leverage technology for competitive advantage

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It’s a tough reality to face, but the current soft market may not improve next year.  Additionally, the "low rates" in the soft insurance market pertains to low premium rates. Add to this the fact that interest rates on investments have been particularly low for years and this means that there is even further pressure on underwriting profitability. 2016 saw significant wind, flood and wildfire event losses, and we have no reason to expect that 2017 will be less. InsurTech has been getting a lot of coverage, and the insurance industry is supporting this not only through adoption of new tech, but also injecting capital investment as well to activate new firms and initiatives and their associated innovations. InsurTech solutions have the potential to accelerate the decision making process, enhance data capture and accessibility, and deliver even more expert content.  All leading to efficient, better business. SpatialKey’s ongoing investment in geospatial insurance analytics ensures that insurers can readily access data and technology that support their critical business decisions.

Make rapid, informed and proactive decisions with data

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Data loses its power if it’s difficult to access, or worse yet, impossible to interpret. Insurers need data to work for them, not against them. They will continue to demand solutions that help them understand and analyze data quickly, so they can make informed decisions fast. More now than ever, insurers want to move analytics out of the back office and into the hands of the business with easy to use one-stop solutions that enable self-serve analysis of information.  

To that end, in 2017, SpatialKey will continue to commit 100% of its research and development into delivery of well-designed solutions, focused in the areas of underwriting, exposure management and claims.  Additionally, we will continue to seek collaborative partnerships with cat and non-cat expert content and technology providers to offer our clients even more choice and seamless access to the intelligence they need.  

Differentiate yourself through customer service

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In addition to the seamless integration of third party data, we see improving customer support and insight as a natural part of event response and as a key trend in 2017. Using data to proactively track a hurricane, wildfire, flood or other catastrophes empowers insurers to act quickly and respond to their insureds with speed and efficiency - amplifying their customer service and retention. In a soft market like today’s, there’s nothing more valuable than serving current customers and maintaining that strong business.

Connect now to learn how you can benefit from SpatialKey solutions

Posted in Wildfire, Hurricane, Underwriting, Flood, Data visualization, windstorm, Collaboration, claims, data partner | Leave a reply

Whether you buy or build, getting ahead depends on leveraging the right experts

Posted on October 19, 2016 by Derek Blum

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Expertise can mean many things. Our last post from our CTO Brandon Purcell, How collaborating on technology changes the buy vs. build debate once and for all, touched on this important, but often overlooked part of this equation. Brandon pointed out that to obtain a solution that truly helps you understand your data and identify the insights you need to make decisions, you have to collaborate with experts. I wholeheartedly agree. But, I would add that you have to use the right kind of expert—with the right skill set—to successfully build and deploy a data analytics solution that will be readily adopted by your team.

What do I mean by that statement? Let me elaborate. Just because I understand the metrics used to describe hurricanes doesn’t mean I have the knowledge or the ability to collect wind speed data and construct a footprint. As a result, it makes absolute sense for me to rely on others who are far better equipped to supply this critical data to me. And yet there are insurers out there who instead of leveraging expert data, will attempt to reinvent the wheel or go without.

I suppose it makes sense in some regard. Who else knows what insurers need when it comes to data better than the insurers themselves? After all, insurance is a complex business with each company developing a unique workflow that suits the geography, lines of business, and culture of their operations. (I should know, I’ve been helping to develop products specifically for insurers for the past two decades.)

But with all due respect, I have to say that while you absolutely know insurance, you don’t have the same expertise in technology, especially for managing the increasing amounts of data you need to make decisions every day. Portfolio data, claims data, hazard data—the volume and breadth of data is growing exponentially. To keep up, you have to leverage the experts in data technology.

Let’s consider managing hazard data for a moment. First, you have to set up and manage the licensing agreements to access data from the provider. But once you have the agreement in place, license restrictions may limit how many people on your team can access the data, so you may not be able to easily scale to meet changing volumes or demands. Then, once you have access, you need to make it available to the right people in your organization. With large amounts of hazard or other kinds of data, this is no trivial matter.

Simple choices about how to warehouse the data and in what format to store it can affect the utility your company can get out of it. If the data is hard to use, you may fail to achieve the benefits you were seeking in the first place. In the end, you will have a variety of costs on the front-end just to have access, as well as maintenance costs to manage and update the data. And that’s before you even begin interpreting the data for underwriting decisions or comparing it to your own portfolio data. Not good.

Think about it this way. If you’re a property and casualty writer, and a client asks you for a workers compensation insurance policy, what do you do? You refer them to an underwriter who specializes in workers comp. Why? Because insuring employees for work-related injuries comes with a host of different concerns than insuring a building. Even inside your own area of expertise, you wouldn’t send an underwriter to do a claims adjuster’s job or have a customer service representative analyze your portfolio, would you?

This kind of expertise also applies to the data you need to drive critical decisions every day. Providers specialize in different types of data just like you specialize in different lines of insurance. JBA Risk Management, for example, is known for hazard mapping and catastrophe modeling for flood. Location, Inc., on the other hand, focuses on providing granular data for crime risk. By specializing, each provider can offer more valuable insights within their chosen area of expertise to the benefit of the insurers who partner with them.

As insurance experts, you might think your internal IT department has the design expertise to provide an optimal user experience when making standalone tools. But with what could amount to terabytes of hazard data, which is the complex kind of data we’re really talking about, your solution has to be able to handle geospatial lookups, as well as apply scoring matrices for one or more hazard layers. Connecting those dots isn't something an IT person who doesn’t specialize in Geographic Information Systems (GIS) or design can do.

On the other hand, choosing to work with the experts who specialize in making data easy to digest ensures you get the high-quality, durable solutions—backed by a dedicated Research and Development team—you need to stay ahead of your competitors. In addition, software from these kinds of experts can provide a better user experience while meeting the specific needs of each department and the broader needs of your entire enterprise. 

More importantly, partnering with software experts that can provide an out-of-the-box solution tailored for the insurance workflow means you don’t have to wait to begin making better, more informed decisions. A top-tier insurer recently discovered this for themselves. Because they decided to purchase an insurance analytics solution, they discovered they could have avoided a $1 million claim. If they had decided to try and build something in-house to understand this important data, it likely would have taken far too long, and even worse, may never have been finished in order to uncover the information. So just like that, their decision to collaborate with an outside expert helped them develop a competitive advantage. Not to mention, the software virtually paid for itself.

The truth is that staying on top of all of this is complicated. After all, there’s never been more data with which to inform your decisions. As the number of specialized data providers continues to grow, your internal IT team can’t easily stay on top of bringing together all of the data sources, managing provider license agreements, and performing routine maintenance to keep everything working smoothly. At the same time, managing internal claims and portfolio data is challenging as well. To compete successfully, you need to be able to quickly visualize and understand what all of this information is really telling you so you can act on it...you need insight at your fingertips.

At SpatialKey, we collaborate with data providers to ensure our clients don’t ever have to be bothered with that kind of administrative overhead and costly infrastructure and maintenance. (Just sayin’.) Plus, we’ve already done the due diligence to ensure we’re working with high-quality data providers. That means accessing data is a snap for SpatialKey customers who aspire to write better risk, respond quickly to catastrophes, and build resilient portfolios.

From a purely business perspective, executives and shareholders expect your underwriters, exposure managers, and claims managers to inform their approach and make educated decisions with relevant data. To set your teams up for success—and enable them to focus on the specialty that drives your bottom line—you need them to spend less time finding and managing data and more time interpreting and acting on it. The added bonus? When multiple departments use the same data sources for their decision making, you gain consistent understanding and efficiency across your entire organization.

Today, every insurer understands the importance of being a data-driven enterprise. But to truly achieve this goal, you have to depend on the right partners, ones who specialize in simplifying how you access, interpret, and analyze data, whether it’s your own or from a third party. Being able to quickly access and interpret expert data sources is what will set you apart, and keep your business competitive today and for years to come.

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How collaborating on technology changes the buy vs. build debate once and for all

Posted on October 11, 2016 by Brandon Purcell

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Our last post by CEO Tom Link, It’s time to evolve how you collaborate in a data-driven world, got me thinking about the importance of partnerships. Who you collaborate with to meet your business objectives matters, especially when it comes to technology. Having the right UX, GIS, and R&D resources on your side can mean the difference between amazing usability and software that slows you down.

Prospects often tell me they’re frustrated. Developing software for an industry as complex—and as data driven—as insurance isn’t easy. I’ve been developing software for 18 years. I can tell you that the decision to “buy or build” a solution isn’t as black and white as it sounds.

More than half of IT projects fail, according to CIO Magazine. Lack of product design resources and failing to align outcomes to meet business goals are two reasons why. Solutions never get deployed, don’t meet the business’ requirements, or are so difficult to use that they never get adopted by the users they are supposed to help. No wonder you’re frustrated. I can’t help but think how much time and money have been wasted.

Chances are, you already have some sort of homegrown data analytics system. And you’re considering whether to extend that to add new features or to retire the solution entirely and buy a new one off the shelf. I get why insurers might decide to create their own in-house solution. After all, compared to buying something new, it can seem like there are lower up-front costs. Not to mention that third-party providers haven’t always delivered solutions that keep pace with the demands of your business. Plus, having control over the end product makes it seem more customizable.

But building software is more complicated (and riskier) than it sounds. Especially for something like risk selection analytics for underwriting. These solutions need to support complex hazard models from different kinds of content providers. I've heard from many prospects that building something like that is just “too risky.” That’s because it’s difficult to maintain and scale as new intelligence becomes available in the market.

When it comes to building software, I wish senior management understood a fundamental truth I’ve learned over the years: The true costs go up significantly when you try to do it all on your own.

In-house development costs are still costs

Spending your budget in-house can often feel like you are saving money. After all, you have the hardware, the programmer’s time is already paid for, and you have a trusted team of folks ready to get the job done. Not so fast. If your company is using this type of thinking, you are (or will be) in for a surprise.

Development is much more expensive than you might think. The real dollar amount you need to consider includes: the cost of your development team, the time taken from your business operations during all phases of development, and the opportunity cost of the work not done on another IT project. Of course, this only applies if you have the expertise within your in-house team to build and add the desired features to your existing solution.

I can’t tell you how many times I’ve seen internal projects end up costing way over the estimate. Or worse, the in-house IT team doesn’t have the expertise to deliver the final functionality. The truth is that developing the solution in-house is never a one-and-done cost.

Once it’s built, you still have to budget for maintenance

Maintaining an application and keeping it running is an expensive proposition. Software has bugs and requires a team to address them as they arise. Once a solution is built, the team typically moves on to another project. I’ve even seen cases where the solution’s primary developer leaves the company. With no one dedicated to keeping the solution running smoothly, your users are often stuck having to figure out a workaround and can lose valuable time, which as you know, is another cost to your business.

At the same time, once your users get the solution in their hands, you can bet they’ll ask for new features and capabilities in future releases. Evolving an in-house solution from version to version also requires a dedicated team—and if your internal resources are on to the next IT project, your users are left with a version 1.0 with limited functionality. If they’re using your solution at all.

An annual enterprise software license can cost upwards of $100,000 a year and yes, over ten years, that’s $1 million. But unlike building in-house, included in that price is maintenance, updates, support, and most importantly, a collaborative partner who understands that you want software to solve your headaches, not cause them. You also get the added benefit of having someone outside your company focused solely on meeting your deliverables on time and on budget.

The right partnership delivers returns on your investment

Collaborating with the right partner gives you a competitive edge. (Stay tuned for more on this—our next blog post will cover collaborating with the right experts and partners to get ahead.) When you can get a more advanced solution faster and for less money, you have to ask yourself: Why would you build one on your own? I like to tell clients that building your own solution is a lot like building your own car from scratch, costly and time consuming. Ultimately, it’s faster, easier, and less expensive to buy a car with the features you like than to try to design and build one yourself.

Just as you might choose a car with a back-up camera or built-in Bluetooth interface, you have options today that allow you to adapt and integrate your existing systems across your unique enterprise. Hybrid solutions excel by leveraging the best of your in-house solution and integrating to third party solutions through APIs. In short, you can have the flexibility you want, while lowering long-term costs. You can also be up and running a heck of a lot faster.

Ideally, integrating your core underwriting system with your advanced risk selection solution gives your business the power to act on information quickly. Let’s say you have an in-house underwriting solution that handles your complex rules and workflow. And, you need to modernize and select better risks using risk models for flood, hail, and tornado. Building a system to integrate this third-party data, perform spatial lookups, and maintain the risk data will require a robust and flexible infrastructure and sophisticated geospatial analytics.

That’s, in part, because the amount of data available—from government sources, third-party providers, and various risk models—is growing at an exponential rate.  Managing, manipulating, and sharing this information efficiently across your organization so it’s easy to understand and act on will take advanced systems that can handle the load. While this sounds simple enough to build, it's pretty complex. But by leveraging an outside solution—one that gives you access to data in a workflow tailored to your needs—it’s possible to have the best of both worlds. Really.

Working with software experts, you can also create economies of scale. At SpatialKey, we develop purpose-built solutions that bridge the gap between underwriting, exposure management, and claims, so our clients can easily make decisions from the same baseline of understanding. When you tap into a third-party solution designed specifically for insurance, you and your internal IT team no longer have to reinvent the wheel. And unlike purchasing a car, your solution will just keep getting better and better over time, thanks to seamless updates by your provider.

So the next time you debate the merits of building or buying a solution, consider all of the shades of gray that will enable you to truly meet your business objective. Who you choose to collaborate with has to be part of your discussion. Partnering with software experts, instead of building in-house, is a clear choice that will keep the wheels of your business turning and more than pay for itself in the long run.
Posted in Insurance, Technology, Collaboration | Leave a reply

It’s time to evolve how you collaborate in a data-driven world

Posted on September 26, 2016 by Tom Link

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Photo credit: shutterstock.com

When I first discovered how well the insurance industry collaborates, I was blown away. As an outsider, learning how agents, brokers, carriers, and reinsurers all work together to identify, write, and share risk was both overwhelming and fascinating. I was impressed at how multiple insurers participate in sharing a single risk and how each does so leveraging its unique strategy and specialty. An industry that initially seemed boring to me became artful and fascinating, even noble. I continually reflect on how this level of collaboration and risk sharing makes tremendously ambitious projects—from skyscrapers to city centers— possible. And yet, surprisingly, this industry that is so fundamentally built upon collaboration seems to lag far behind its peers when it comes to technology innovation and collaboration.

Before starting SpatialKey, I co-founded Universal Mind, a digital agency dedicated to helping businesses figure out how to use technology to differentiate themselves and improve customer experience. SpatialKey is a natural extension of that simple idea, except we focus specifically on helping insurers. As I’ve worked to build companies I’m proud of, I’ve learned some invaluable lessons I think can help everyone participating in the insurance space.

To me, the industry’s call to be more data-driven is a call to collaborate on solutions that simplify the process of interpreting data. After all, consider the caveman. Probably not where you thought I was going with that, right? Bear with me.

Neanderthals died out for one simple reason: they failed to learn how to collaborate with groups outside of their tribe. Homo erectus, on the other hand, thrived because of their ability to trade their specialized skills with outside groups, according to Matt Ridley, author of The Evolution of Everything.

Today, it’s really not all that different. Our economy is built on this simple exchange of skills, and I’m betting that’s hardly surprising to anyone. But I see business leaders thinking they can go it alone when it comes to technology in insurance. In talking with clients, I hear a lot of stories about data being difficult to interpret, contextualize, or provide in a timely fashion to decision makers. I hear about internal teams building systems that stray from their areas of expertise, and a cry for a way to get work done faster (not to mention cheaper). I can’t help thinking we’re ignoring some of the lessons of our ancestors. This is why I deeply believe in the power of focus, specialization, and exchange. The only way to survive—and let’s face it, evolve—is to hone our own skills and have the good sense to collaborate with other experts along the way.

I invite you to consider that outsourcing to experts is something you already do. You may use third-party administrators to manage claims adjustments during an event or underwriters and managing agents who specialize in writing certain regions and classes. So it makes sense to do this with the data you use to drive your business forward, right?

Data, to put it simply, has no value unless you understand it. Over the past several years, the explosion of available data sources you can access to make decisions has been amazing. But the creators of that data are frustrated because few people can deploy that data effectively (or sometimes, know it even exists). And you are challenged by having to manually manage disparate data sources and provide relevant data meaningfully and effectively to people making decisions. SpatialKey was designed to help both parties—making more data available and useful so it can be interpreted and acted upon. I’m proud of how we’ve made that happen—and I appreciate that it could have never have happened if we hadn’t collaborated with our clients.

That’s why I’m passionate about building an ecosystem where we’re an effective contributor and where we can be smart about how we collaborate with others. One of the ways we do that at SpatialKey is by partnering with data experts. We don’t make flood footprints or wildfire extents, so we understand the value of working with experts like JBA Risk Management, KatRisk, NOAA, USGS, and Location, Inc. (to name only a few), who do incredible work with data. Exchanging our skill of visualizing data with their talent of creating it helps us move technology forward for insurers. Without this exchange, there’s no way we’d be able to give our users the ability to visualize and interpret the data they need to make the decisions that positively impact their bottom line.

The truth is this: maintaining the status quo will hinder our long-term success. I knew this when SpatialKey was in its early days and was determined to make sure we were always thinking creatively to help our users stay ahead of their competition (while maintaining our own edge in the software space). We’ve always known that our specialization is building innovative software with a keen focus on purpose-built analytics and great design. What we didn’t always know is that it would be for insurers. One of our first clients, Willis Re, is a veteran in the insurance space. Willis Re are experts in placing reinsurance, and needed a way to effectively develop and convey their strategy and recommendations to their clients clearly, interactively, and fluidly. Rather than build their own internal solutions, as was the traditional route for other reinsurance brokers, Willis decided to collaborate with us. They appreciated that what we brought to the table could help them differentiate and create a better and more impactful solution for their clients.

“We are at the forefront of risk and reinsurance, but we recognize where others can provide exceptional capabilities for us—especially when it comes to software,” says Vaughn Jensen, Executive Vice President, Willis Re. “Investing in our partnership with SpatialKey has given us a real competitive advantage because we can stay focused on being experts on what matters most to our clients and business.”

As it turned out, we needed Willis Re  to help us see how beneficial our solution could be for geospatial insurance analytics. This exchange is one of many that pushed us to actively pursue developing our software specifically for insurers. It was through this collaboration that I saw the benefit of offering, not to just Willis, but to the insurance industry, one of the key things they’re always trying to provide their own clients: peace of mind. What excites me the most about collaborating in this way is the remarkable ripple effect it has on product advancement. The more we collaborate with our clients, the better solutions we can offer the entire industry.

It’s no secret that many companies in the insurance industry are working to catch up when it comes to technology. Collaboration is the clearest way for you to get where you need to be. Together, we’re building something that is advancing technology in insurance. The more collaboration that happens, the more we’ll see companies grow, innovate with technology, and maximize profits.

The cool part is that insurance is one of the most prevalent and necessary things in our world today, and it’s only going to keep evolving. I know there are endless opportunities for exchange, specialization, and advancement—new players in the industry, new ideas, new approaches. With so many ways to move forward, if you embrace collaboration as a way to innovate, you will not just survive, you’ll thrive.
Posted in Insurance, Technology, Collaboration | Leave a reply