Experian UK&I has recently announced an AI-powered data solution ‘Hazard Tags’ which will help with the transformation of underwriting processes in the commercial insurance sector.
As explained in the update from Experian, manual underwriting methods can be time-consuming for insurers and can often lead to a “lack of clarity” over key questions that are “pivotal” for accurate risk rating and quote pricing, as businesses expand and change operations over time in order to “reflect market demand.”
Now thanks to a new collab with business data aggregator Veridion, insurers and Managing General Agents (MGAs) will benefit from a better underwriting process – reducing the need for “manual data gathering” – and an enhanced claims processing and quotation journey.
By using AI and Machine Learning techniques to analyze billions of internet pages, the solution identifies any changes to business activity, risk exposure, and products and services, enabling more “accurate” premiums and coverage to be calculated.
Hazard Tags, which identifies risk keywords via the analysis, may reportedly be combined with industry classifications like SIC, NACE, and NASIC, giving commercial insurers an “enhanced, true profile” of the business.
As explained in a blog post, it reduces the risk of “misclassification” within the insurer’s portfolio that may potentially result in considerable losses in revenue.
Analysis by Experian UK&I revealed that over half of a large commercial insurer’s polices were considered to be “misclassified” by traditional classifications, costing the firm around £6 billion in “lost premiums.”
David Gallihawk, Chief Product Officer, Business Information, Experian UK&I, pointed out that AI as well as machine learning are both transforming the world of work in countless ways, and the financial services sector is said to be “no different.”
David added that traditional SIC codes might not always “accurately reflect” mixed business operations, for instance, breweries that also function as bars and restaurants or construction firms that handle hazardous material like asbestos. That’s the “issue that Hazard Tags solve,” David said.
They added that increased automation means improved overall efficiency, and in the case of insurance, means more” accurate up-to-date information” so underwriters can get a “comprehensive view of clients and price accordingly.”
Florin Tufan, co-founder and CEO of Veridion, said that partnership with Experian, Veridion leverages AI to build “comprehensive” business profiles, accurately identifying activities and “exposures” from a firm’s digital / online presence.
They explained further that this offers insurers with detailed insights for precise “risk evaluation and informed decision-making.”
The launch of Hazard Tags builds on Experian UK&I’s Business Activity Tags and Business Descriptions classifications, which enable “better, more accurate risk assessment and classifications of businesses.”
Experian is a data and tech firm that is focused on powering opportunities for people and businesses around the world.
They help improve lending practices, uncover and prevent fraud, simplify healthcare, deliver marketing solutions.
They also assist people with attaining their financial goals while also helping them with saving time and money. They operate across a range of markets, from financial services to healthcare, automotive, agribusiness, insurance.