In this “Ask Me Anything” session, Carpe Data CEO Max Drucker covers everything from the first days on InsureTech (it’s earlier than you think), how insurers are future-proofing their businesses, and everything in between. Moderated by insurance veteran and former commissioner, Nick Gerhart. This session was originally streamed live at InsureTech Connect Global 2020.
Here are a few of the questions Max received from the audience:
How do you see data and insurance evolving from a regulatory perspective? Do you believe it’s important to work with regulators?
“I think working with regulators is immensely important and I ultimately believe that startups that work with regulators have a huge advantage over the ones that don’t. At the end of the day your product may be predictive—it may be able to predict loss or retention or fraud, or all of these given things—but if regulators or the Fair Credit Reporting Act (FCRA) or other sorts of privacy laws aren’t taken into account and you haven’t been hyper-proactive about solving these issues, then your solution is worthless. You can’t use a solution that hasn’t been signed off on by all the various bodies, and it will be a competitive advantage for startups to navigate this very complicated world of regulation and privacy and build those products from the very beginning with those concerns in mind, as opposed to building something and then saying, ‘Can we have your stamp of approval on this?'”
There’s been a lot of talk about “Digital Transformation” this year. Where do you see data fitting into those initiatives?
“I think that something we have seen is that this [pandemic] is something of a wake up call. It’s not that insurers haven’t cared or focused on automation, and it’s not that they haven’t looked at data, but this has really brought digital transformation to the top of the priority list. We’ve been talking AI and Machine Learning, but the use cases haven’t been obvious. Now it’s become obvious— ]there are new data products and techniques that will enable us to continue to run our business whether we’re distributed [at home] or parts of our workforce are retiring (and it’s getting harder to replace them)—this pandemic has really brought these things to light. And while we have always been a company that has been about making automation possible and driving those operational efficiencies, now we can focus even more on what those given areas are. Whether that’s small commercial underwriting or handling a claim, that’s what we’re looking into developing products around.”
People say that data is the new gold. If that’s true, how valuable do you see data in the future of insurance?
“I think of insurance companies as the original predictive analytics companies. They’re the real ‘OG’ data companies and they’ve been predicting outcomes for literally hundreds of years. They’ve been using mortality tables and so many other forms of data, and it really is the lifeblood of those businesses (both internal and external forms of data). Where we have focused (and continue to focus) are those data products that enable automation; that enable the reduction of manual processing and subjective decision making by human beings. Whether that’s part of the underwriting policy lifecycle or working through a claim, all of these things have the opportunity to be streamlined and automated for greater operational efficiency, and data is a critical component in that. That’s the area that is our primary focus and the products we create—how can we create these products to unlock this automation that enables carries to be more consistent and do more with less manual interaction?