Six Things 7.11.23
Insurance Thought Leadership
Transforming the Insurance Industry - Welcome to the Conversation
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Paul Carroll, Editor-in-Chief of ITL
"The best loss is the one that never happens."
That, to me, is the most compelling line from the interview I conducted recently with Pete Miller, CEO of?The Institutes. The Institutes (with which ITL is affiliated) has for some months now been arguing that insurers should take all the data that they're gathering on potential hazards in commercial buildings, homes, cars, etc. and spin it forward. Rather than view data analysis as a historical exercise for pricing risks, then indemnify customers for losses, Pete says — and I wholeheartedly agree — that there is a major opportunity for insurers to use sensor data to spot wiring problems?before?they lead to fires, to detect a leak?before?it can do any damage, to warn workers that they're risking injury?before?they get hurt.
Insurers will pay fewer claims. They will also avoid all the costs of processing the claims that don't happen. They will have the opportunity to sell all sorts of new products and services that minimize risk. Meanwhile, insurers will not only spare customers from paying a deductible but will let them skip all the hassle that comes with recovering from a fire, leak, etc.
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Talk about fulfilling the insurance industry's noble purpose. Talk about creating loyal customers.
If you want to dig deeply into "predict and prevent," I encourage you to check out?the podcasts?Pete has been conducting with insurtechs such as Whisker Labs and Betterview, with executives from insurers such as Chubb and brokers such as Marsh McLennan, with insurance commissioners and with customers. (If, like me, you're more a reader than a listener, you can find the transcripts for each of the six podcasts on the same page.)
In the meantime, here is the interview I did with Pete, which, in my not so humble opinion, is a great summary of the opportunity that "predict and prevent" presents:
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