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by John Ludlow, CEO, Airmic

Industry View from

Why insurers could be an untapped intelligence goldmine

Organisations are failing to capitalise on their insurers’ and brokers’ unrivalled access to key business intelligence. In a world where data is king, business leaders and the insurance industry must work together for mutual advantage, argues John Ludlow, CEO of Airmic.


Insurers have a unique perspective on the business. In a data-hungry world, they have access to a rich source of information not available to most business leaders. They see claims across different sectors and competitors. They investigate incidents when things go wrong, and they gain valuable insights into what differentiates performance. They know what boardrooms need to know.


Lost opportunity


This presents a strong opportunity for both businesses and insurers. Presently, however, the insurance industry’s insight is not being fully exploited by businesses as C-suite leaders and insurers rarely reach out to each other. The relationship between insurer and insured is largely transactional and product focused.


Part of the challenge is that data is often left in silos across the insurer’s and broker’s internal departments and not turned into information and insights that clients need to be aware of to improve their risk profile or to understand the risks associated with a new commercial venture. At the same time, an improved risk profile frequently goes unrewarded as only claims history counts.


This is a lost opportunity on both sides and there are several reasons why this is happening.


First, business leaders are understandably reluctant to talk about their problems and vulnerabilities with a third party. Second, insurance is not typically viewed as a C-suite topic. And third, the insurance market has not yet gone far enough to expand its data-driven intelligence services.


To businesses, I say this: success comes from confronting the brutal facts. However uncomfortable it is to discuss vulnerabilities with a third party, your insurers and brokers have the potential to offer unique insight.


No one is suggesting the C-suite takes responsibility for the minutiae of the insurance contracts, but to the extent that certain insured risks are business-critical, it is good business sense to put insurance on the board agenda. Data is king in today’s business world, and your insurers and brokers are the gatekeepers to that data.


The insurance business model has to change


To the insurance market, the message is even more critical: insurance plays a crucial role in the functioning and success of the business world. This will not change. However, traditional insurance products for traditional risk are increasingly commoditised. Meanwhile, the pace at which new risks are emerging is far outstripping the pace of product innovation. As a result, insurance offerings are for the most part not keeping up with the changing risk landscape.


Insurers could do more to encourage their teams to focus on client outcomes rather than purely selling a product. Understanding how to add strategic value to the objectives of the client will result in a closely aligned relationship and be valued and rewarded accordingly.


Mutual advantage in collaboration


Some insurance companies have made great progress and are offering risk-advisory add-on products, while others will adopt clients with poor levels of risk maturity and take them on a journey. I would recommend this for any board which is worried that their internal capability is weak or where they are facing an emerging risk.


Insurers that put capital at risk in this manner do so for one of two reasons. For well-understood lines of insurance, this can be a way of building new, long-lasting and valued relationships. For emerging risks, where the client is most interested in buying new products but where the insurer is most uncertain about the risks due to lack of loss data, this can be a way of collecting data, forming insights and developing new lines of business and the risk advisory services that support them.  


Insurers’ insights and risk engineering are undervalued and often not seen as part of the product and service – by both business leaders and, more curiously, by insurers themselves. The key message is that when people have the foresight to collaborate, mutual advantage can be found, and it can start by business leaders and insurers reaching out to each other. 

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