This is how savvy commercial underwriters are getting ahead of the competition

In a fiercely competitive and increasingly challenging commercial lines marketplace, Opta Information Intelligence’s Commercial Perils Solution can now display an unparalleled scope of risk related insight to a particular piece of business. Allowing savvy underwriters to better manage their existing portfolio while ensuring they are growing their book profitably.

The Commercial Perils Solution is the most sophisticated risk analysis tool of its kind in Canada, containing data for 3.6 million commercial locations and 10 years’ worth of claims information. Aggregating and analyzing data from a wide array of sources, it looks at far more than just risk factors associated with the single piece of business being quoted – it knows about the building the business is in, the nearby businesses, and surrounding risks in the neighbourhood at large.

“Skilled underwriters are excellent at assessing risk, but there is a wealth of data to which they’ve never previously had access, inhibiting their ability to fully understand the business that’s coming in the door as well as what’s on their book right now,” says Greg Gilbert, Opta’s chief data scientist. “With Opta’s solution, a single address is all you need to unlock geocoded property intelligence, and to segment the good from the bad risks with much greater precision.”

Blending unprecedented amounts of data with artificial intelligence and machine learning, the solution delivers highly accurate risk scores for 16 different perils, with the score for each peril ranging between one and 100. The ground-breaking product has been in the works for two years and was just launched after a highly successful pilot phase.

How the solution works

Consider a bistro in a strip plaza. An underwriter may know a good deal about the restaurant itself, but what about the dry-cleaning business two doors down that has pollution exposure? Or the nail salon next door that has financial difficulties and is therefore more susceptible to fire claims? Or the fact that the walkway between the parking lot and the building is unusually narrow, and there is a heightened risk in this plaza of cars affecting storefronts or pedestrians?

This is just a small piece of what the tool takes into consideration in calculating its peril scores.

“This is really about showing the forest as well as the trees,” says Gilbert. “It’s a lot of work to know everything around a business that impacts that business. With Commercial Perils Solution, a tremendous amount of analysis is already done for underwriters, and helps them know key risk factors that would otherwise be very difficult to unearth.”

Identifying better business

The solution is arriving at a pivotal time for commercial lines in Canada. With market consolidation, and some players becoming increasingly sophisticated in their data and risk analysis, it is critical for other insurers to stay ahead of the curve. Or, more accurately, to not fall behind it.

“The more analytically savvy players have the capacity to quickly distinguish the better risks from the bad ones,” says Gilbert. “You don’t want to be one of the companies slipping behind the technology because that’s where the bad business ends up.”

Opta’s Commercial Perils Solution can help insurers better analyze the business they already have, and make sure they’re getting the right new business.

On portfolio management, the solution can do a scan of the entire book and identify which risks are good, which should be removed, and which are worth keeping but at a higher premium.

On new business growth, it can assist in growing the book profitably while saving underwriters time. Many underwriters are forever coping with a seemingly bottomless stack of quotes, with more constantly coming through the door.

“There is a need to triage the risks before the underwriter even looks at them, so they know where to focus their attention and get the better prospects at the top of the pile,” says Gilbert. “This way, you can improve the response time back to the broker and make sure you’re signing on the good business before someone else does.”

Already seeing successes

The product has been in pilot test for the past 12 months and has already seen numerous successes.

Gilbert notes: “There is a very high return on investment for our customers, and we’ve seen that, even with larger insurers that already had some really impressive analytical capabilities. Even with those, we’re still hitting home runs.”

The Commercial Perils Solution will only get stronger. Opta continues to seek out more sources of data, so it will become continually more powerful and more accurate.

Those interested in the product can email info@optaintel.ca or click here to learn more.