Making Risk Flow | The Future of Insurance
00:09:47 · Juan de Castro
[00:09:47] S0: Okay, so it sounds like even within the actuarial teams, there's been quite a lot of evolution in the last few years. And again, we don't often talk about transformation of the kind of the actuarial teams. So Simon, like when you think about this evolution that Jamie has referred to, like how do you see the evolution of the actuaries in insurance companies?
00:10:09 · Simon Cooper-Williams
[00:10:09] S1: Yeah, I mean, think looking at what's happening in Markel, the demand from the business for data and analytics has just increased so much. So we talk about actuaries evolving in the insurance industry, but I see the underwriting part of the insurance industry has evolved for them to be a lot more demanding for that analytics. So, I mean, we have a program in Markel called Underwriter of the Future. That wasn't something there when we started. And a lot of that is around sort of technical capability of underwriting. So it outlines segmentation, it outlines expectations of portfolio management capability that various levels of underwriting divisions should be doing. So we've now got underwriters who are looking at these frameworks and saying, okay, well, I should be able to segment my book. I should be able to use pricing data to stitch on top of it. The people who are really well placed to do that are the actuaries who've been sort of been trying to do that for years, maybe on a different floor historically or somewhere else not sitting with them, but I think they've evolved with the underwriting business at the same time. So you've now got that demand and actuarial skill sets are very well placed to help with that. Like the bread and butter is slicing and dicing data, stitching things together, dealing with really messy sort of sets of data where they're not easy to analyze. It's not standardized. It's picking it apart. It's making sense of it. It's trying to put judgment on top of it as well. And I think that's really brought them to evolve with the underwriting function at the same time. And that's where I think where traditionally, actually, it may have been in more the sort of second line functions. You can see them in that first line now because they're there to help make the decisions on front line. I think that's where they can add a lot more value compared to historically.
00:11:54 · Juan de Castro
[00:11:54] S0: Yeah, and that's probably, I think, of the evolution also Jamie was referring to, right? So from being a reserving actuary where you probably need to work less day to day with underwriters to being more pricing actuaries, where, as you said, at the end it's about enabling underwriters to make the best decisions about the risks. You are mentioning there the kind of the evolution from what actuaries used to be more in the past, which was reserving actuaries, and you mentioned them being in a different floor, etcetera, to working closer together with underwriters. And I guess that also has meant that the actuaries themselves have have had to evolve and also like probably become more cross functional in the way they those pricing actuaries work. So I'm sure based on your kind of experience in the market, what type of actuarial teams do you see are most effective? And perhaps also on the other side, some examples of when they are not that effective.
00:12:52 · Simon Cooper-Williams
[00:12:52] S1: Yeah, really what I've seen after moving out of a traditional team is working with people from other professions across insurance. Back when I was in my earlier days in actuarial, a lot of what we were trying to do, we try and do a lot of data ourself. So we'd be using spreadsheets, we'd be using access databases. We were trying to force solutions through. A lot of it was wrangling data, but we didn't have a traditional training in that. What I've really seen is doing what I do now. In our team, we have data architects, data engineers. We have computer scientists on the HX side, actually. We've got software engineers as well. So when we've merged those together and we've done a small sort of cross functional team, they actually are really good at using the analytics part, but that data prep, data pipelining, stitching it all together, sourcing it from multiple sources, I think having worked in now a team with people who are from a different background and are able to do that, it's been sun lining. We've been able to run compared to walking before. To come to a couple of examples that we've done, just something as simple as our dashboarding solutions. Business intelligence has moved on so much in the last sort of five years compared to what we saw before. There's no more spreadsheet tools. We're using Power BI. That's completely transformed wholesale and international where it's on all the screens. You walk around the floor, everyone is using it. And we had actuarial people design the dashboards. They sort of knew what underwriters would like to see as an insight, or as a portfolio management tool if they're trying to segment their book or look for trends that aren't coming out from other avenues. And then working with the people who are able to source data and are able to structure it sensibly, we've gone from seeing projects where a dashboard may take a year to launching it in a month. And we've really just seen those skill sets come together and work together instead of passing work on and putting it to another team. And that's been absolutely transformational. I think my second thing is just around our portfolio managers that we've got in the underwriting division. I think a common frustration for me was, I would like to do that, but I don't have the data.
00:14:59 · Simon Cooper-Williams, Juan de Castro
So I'd like to stitch this pricing data on, oh, there's a claims management system there. It might have causation code, but we can't get it. Or the CAT team might have CAT data and we might not have used that for analysis. So insurance, there's a load of data all over place and it's not all in the policy admin system. It can be anywhere. And like what we've got is we've got a structure where really if a portfolio manager says, Can I get that data? We can usually turn it around and get it. If it's digital and it's in the company, we've found a way to work where we can source data and we can push it out. And again, that's just completely changed how we work. We can stitch data on and provide those extra insights that people weren't getting before. [00:15:42] S0: Yeah, and that resonates well. And I think that's also also something I've seen in in in many carriers, which is the way I refer to it is how do you operationalize your actuarial insights? Right? So it's one thing is to produce the output or produce the numbers that you want to do from an actuarial perspective. But then the concept is then how do you enable others to be able to use those insights into decision making? And to do that, you cannot just provide them a spreadsheet or a number, but you need to provide them, as you said, a dashboard, the insight, something that can be used on a daily basis.
00:16:18 · Simon Cooper-Williams, Juan de Castro
[00:16:18] S1: And another point, like back to that sort of underwriter of the future example that I mentioned earlier and relevant to the dashboard. Recently, we've increasingly seen guys, we're employing more underwriters and some of the senior underwriters, just to show how that underwriting culture has changed. When underwriters are joining, they're asking what our solutions are in this space. So they're coming across, we've done a really sort of senior hire recently, and it's what's your dashboarding like? What data do you have? How do you do pricing? Is it quick? Do we have autonomy in our pricing? Can we direct it? And is now for us, of the pulling factors for underwriters coming into the business as well. And it just sort of proves that culture point around that underwriter of the future. When we're seeing these high performing underwriters moving around and coming in, the fact that they're asking, can we see this as part of them assessing a company is very different than what we think we would have seen in the not too distant past. [00:17:13] S0: Definitely. And Jamie, obviously, especially in your current role, you work with many different carriers, insurers. Is this the type of evolution of creation of more cross functional teams something that you see quite common in the industry now?